Anyone make six figures a year profit?

[bdoggman]

I know its kind of a personal question but, does anyone here make 6 or 7 figures "Profit" a year in this line of work? I've just been wondering if this is possible from a personal standpoint. Thanks for any input....

 

[phaZed]

6 figures is going to be fairly common for this type of work. 7 figures is going to be far and few between - but still possible. Some members on here deal with medium to large business and MSP packages in which I could see them making 7 figures, without a doubt.

 

[mr m]

6 figures is going to be fairly common for this type of work.

Hahaha, I must be doing something wrong!

 

[SilverLeaf]

I know its kind of a personal question but, does anyone here make 6 or 7 figures "Profit" a year in this line of work? I've just been wondering if this is possible from a personal standpoint. Thanks for any input....

Does this include the two digits after the decimal point?

 

[lan101]

I would think the ones doing MSP with medium and larger businesses would have a good shot.

 

[phaZed]

Hahaha, I must be doing something wrong!

I know your being comedic but for many it should be very possible to make 6 figures. Make sure your prices are right. Get the clients. Work on your business. Do the work.

Your prices have to be right for you, not the customer. To be viable I look at it like this - PPT (Price Per Ticket, Avg.) and daily sales totals. That is to say you need to be making X amount of money per day or X amount per ticket. Set your goals to match your desired end-of-year income. For me there is roughly 300 working days in the year taking out Sundays and holidays and whatnot. Want to make 100K a year? You have to make roughly $335 per day. If you work a 12 hour shift that amounts to almost $28/hr. Not big money. Now add in your approximated store and business costs to that figure and find out what you need to be doing to cover those costs. Oh, and don't forget taxes (Figure 30%). Obviously you find that you need to be making quite a bit more to make a take-home amount of $100K - but the numbers game above still works, as an example.

Get the clients - Advertising, website, word of mouth, business cards.. anything you can do to lure prospects (Without resorting to gorilla tactics, of course). I have found that many business owners fail because of 2 reasons that tie in with all of this. Number one is the business owner who sits and waits for clients to come to them. If your not busy, something is wrong. Your either helping customers or helping your business - either way your busy. Number two, and this was one of my hurdles, is to spend money to make money. This old saying is so true. I was paying crazy money to Google Adwords my first few years (~$10,000) but it payed off because I was getting clients. Now, because I spent that money I acquired great reviews. Google likes my website (because of the time and content put into it) and now I have payed $0 in the past 3 years and I am organically #1 in the search results for my area.

Work on your business - Spend time on your business. I work at home so I have the "luxury" of working 12-16 hour days if needed. Not just on customer stuff, but the business back end. Your not just an employee, your the owner; the business itself. Spend money on making your "store" look good and inviting. What needs to be improved or could be better? What is the customer going to take home about the "experience"? Is that experience going to WOW the customer so they tell their friends or not? How can you help yourself to make things go faster and more efficient? For me, I'm home-based. I bought a tri-level home specifically so that the bottom floor could be the business. It keeps everything separate from the living quarters and has no stairs which means I am wheelchair friendly and don't have to really worry about trips, slips and falls in the winters. I have a small sign outside, but when you come in... it looks just like a store. Slat-walls with product hooks (and products!) chairs for the customers, a large U-shaped desk, track lighting, metal art on the walls as a conversation piece. Believe me, when I get new customers in I regularly hear "Wow, this is cool! Nice place!" - This is what they take home. Some are thrown off by the regular looking house, but once inside, they know I'm serious and they came to the right place. Your story may be different but the same rules apply.

Do the work. Take care of your customers. I have a friend that I had to "let go" as a friend because he just couldn't get his stuff together in life, in general. He has tried his hand at being a handy man, an eShield authorized installer, and a lawn/landscaping service. He's lazy and he's sloppy. Sure, the first 6-12 months he works real hard at it, does fairly well, and then his business flops. Why? He spends all the money he gets on himself. If the business needs anything, oh well. Also, he gains a false sense of security when he gets paid. He figures, "Hey, $10,000! Awesome. I'll just sit around and wait for my next paycheck." - and it never comes. It never comes because he took shortcuts, gains bad reviews and gets a poor reputation. If your going to do the work, do it right. If you do good work it will show not only to your customers but also in beneficial returns. A self-sustaining feedback loop, if you will.

Get into recurring income and offering services, if you can. I signed up with GFI about 18 months ago and it has been very profitable for a minimal amount of effort. I paid for the branding (spend money to make money, remember?) as well. I have a few managed business customers, but I have focused up to now on selling MAV (Managed Antivirus, Vipre). I sell it as an annual subscription and because the bulk of my customer base is home users with virus infections I don't even have to "sell" it, it sells itself. I had 210 MAV customers in the first year alone.. I figure that I am roughly making $48 per machine per year after paying GFI - That's over $10K right there, pure profit. If the trends stay as they are now I should have another 250-300 MAV users this year alone. Also, renewals are currently hovering right below 70% - not too bad. But you have to work for the renewals. Send the email 30 days out, Call 10 days out, USPS 7 days out if no contact. Do you buy a service or program to help you manage this(Quickbooks, PCRT, mHelpdesk, etc)? This takes time and money, but pays off in the end. You just have to do the work.

I hit 6 figures for the first time in my life last year. I'm on track to better last year's figures by 20%. Fingers crossed!

If things continue to go as they have been I will most likely look at getting a store-front and maybe even an employee (Gasp!). When and if I do this I will be looking at a significant income loss for at least 1-2 years I think. Spend money to make money. Don't be too ambitious or think that you are going to start making loads of money right away. It takes baby steps and years of work to build your business to the level you want and are comfortable with. If your not good with that, then stop now as you are likely setting yourself up for failure, perhaps even, a costly failure.

 

[Kitten Kong]

Great advice here Aaron.

+rep added

 

[bertie40]

Question. I have brackets at both ends of my yearly income.

Does that count towards that 6 figures you mentioned ?

Back on topic.
There is so much I can do to get my profits up, but hassles and personal circumstances currently prevent that.

Maybe better next year ?

 

[Kitten Kong]

Same here rob.

Without doing smb's and msp work, I don't think it's possible with mainly res work. Irrespective of who you are, without charging an arm n leg on each job.

My max fee is approx £75.00 (without up sells), so I'd need to do over 1200 each year, every year in order to reach 6 figs. Just not feasible.

 

[YeOldeStonecat]

With our annual "goals"...which we've pushed more and more over recent years, the 7 figure mark might be hit next year. We're closing in on it pretty quickly. The economy has been great for the past several years...growth all over the place.

 

[altrenda]

lots of good stuff here.

But I doubt a sole practitioner can hit 300 work days. That's working 6 days a week, every week. http://www.workingdays.us/

Hard to keep up that pace. not even considering burnout. If you work 250 days, you have to clear $400 every day, that's after expenses, to make $100k profit.

Certainly doable, especially with MSP's, but for one person, that's really humping.

 

[carrcomp]

Actually, many 1 man shops have been increasing their profit margins, simply by adding recurring revenue to their books.

It's completely feasible to make 6 figures with a 1 man shop. You just have to use and offer the right tools and offer services at the right price to get the job done.

 

[altrenda]

Nice ad

 

[Markverhyden]

lots of good stuff here.

But I doubt a sole practitioner can hit 300 work days. That's working 6 days a week, every week. http://www.workingdays.us/

Hard to keep up that pace. not even considering burnout. If you work 250 days, you have to clear $400 every day, that's after expenses, to make $100k profit.

Certainly doable, especially with MSP's, but for one person, that's really humping.

I agree flying solo. One would have to AVERAGE $100/hour day in and out with a 50% margin. And adding a retail shop into the equation would make it that much more difficult.

 

[pceinc]

I know its kind of a personal question but, does anyone here make 6 or 7 figures "Profit" a year in this line of work? I've just been wondering if this is possible from a personal standpoint. Thanks for any input....

You talking gross or net profit? 6 figures is definitely attainable for a 1 one man show, 7 would mean you are the verge of going postal or have no life. Higher revenues will require employees. If you can get your annual revenue over $350k, you should be close to 6 figures. If not you need to adjust prices.

 

[Kaizen]

I agree flying solo. One would have to AVERAGE $100/hour day in and out with a 50% margin. And adding a retail shop into the equation would make it that much more difficult.

That margin as an example is way out of line. What one man shop has $8000/month in expenses? I can't speak from experience, since I had a retail establishment(residential break /fix) with one employee from very early on. Today with two employees plus myself, one of which is making $39,000/year; we spend about $2,500/month on advertising; we even offer free estimates and still have a margin between 30 and 35 percent.


For everyone who says it is tough or barely doable, Aaron said he is on track to make $120,000 as a one man shop.
Instead of looking for reasons it can't be done find some reasons it CAN be done.

The OP did not specify one man shop or not. As to a one man shop it is much more efficient than a multiperson shop. This is coming from my perspective of having employees. Currently I would guess we lose about 30% of our efficiency do to management of employees that a one man person does not lose. As mentioned with other income other than labor, some product sales and recurring income, $100,000 should be no problem as a one man shop in a moderate population.

 

[carrcomp]

Not everyone has 40 hours a week in billable hours ...

 

[Kaizen]

With our annual "goals"...which we've pushed more and more over recent years, the 7 figure mark might be hit next year. We're closing in on it pretty quickly. The economy has been great for the past several years...growth all over the place.

I an assuming you are saying 7 figures profit after paying hourly employees and expenses. How many owners does that get split between(or just you )?

 

[Markverhyden]

That margin as an example is way out of line. What one man shop has $8000/month in expenses? I can't speak from experience, since I had a retail establishment(residential break /fix) with one employee from very early on. Today with two employees plus myself, one of which is making $39,000/year; we spend about $2,500/month on advertising; we even offer free estimates and still have a margin between 30 and 35 percent.


For everyone who says it is tough or barely doable, Aaron said he is on track to make $120,000 as a one man shop.
Instead of looking for reasons it can't be done find some reasons it CAN be done.

The OP did not specify one man shop or not. As to a one man shop it is much more efficient than a multiperson shop. This is coming from my perspective of having employees. Currently I would guess we lose about 30% of our efficiency do to management of employees that a one man person does not lose. As mentioned with other income other than labor, some product sales and recurring income, $100,000 should be no problem as a one man shop in a moderate population.

Granted the OP did not make any specific details but profit was mentioned. So I just took a simple approach as I'm setup, sole proprietor. Granted other business, LLC, etc will vary. This is my math working backwards.

$100k profit. Remember that I still have to pay myself but that is not a deductible business expense as a sole prop. So I "pay" myself $40k. I really need to have $140k profit after TT&L. Start by looking at taxes. The Fed tax rate at this level is either 28% or 33%. I'll just use 30% for simplicity. Also have state tax as well. After looking over the list here I just plucked a guesstimate of 7% nationally. Don't forget there is self employment tax, SSA and Medicare, at 15.3%. So the total tax burden, rounded for simplicity, is 50%.

Now things get really messy. Your net business income from your sole prop goes on line 12 on the Fed form. There are several items to consider before getting to line 43, taxable income, but keeping things simple, I think the picture becomes obvious. The 900 lb gorilla in the room is what goes on line 12. So your sole prop business income, which is net of operating expenses, needs to be over $200k. So if you take that over 50 weeks and 8 hour days you end up with $100/hour.

 

[phaZed]

Just to clarify, last year I had a few server install/upgrade jobs that paid very well which put me over the top. I think I probably averaged around $200-300/hr for those jobs as they were quoted prior to the job and the price was set no matter how long it actually took, if that makes sense. Planned for the worst and finished ahead of schedule. So it's not all about hourly.