What Risks Equals Rewards?

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Primrose Fowler
10 years ago
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1 What Risks Equals Rewards? Learning Where to Take Risks in Your Business and Where to Play it Safe January 10, 2011

2 Take small to medium risks

3 Be a Prosperity Thinker

4 Downside - Upside Small downside to your risk and big upside

5 Where should you take risks? In your personal or business finances?

6 What is your 2012 revenue goal?

7 $50,000 today Grow your business by 25% per year 5 years $120, years $375, years $1,130,000

8 3 Ways to Take Risk Time Money Brand

9 Weighing Whether to Make an Investment in Your Business 1. How much will you spend up front? 2. How much will you get paid? 3. How often will you get paid? Monthly? Yearly? 4. How long will you get paid?

10 Return on Investment? 1. Go to financial-projections.com 2. Decide if the potential ROI is worth the risk.

11 Video Equipment Costs Lights Camera Total $1500 $ 500 $2000 Your average fee = $2000/client You will need 2 clients to make this investment worthwhile

12 Go Where Your Prospects Are

13 Exhibiting at a Trade Show Costs Booth 500 Travel Expenses 1,500 Food 200 Marketing Materials 500 Assistant 200 Total $2,900 You need to gross $75K to make this worthwhile Client = $1000/year for 3 years

14 Should You Rent Office Space Monthly Rent = Annual Rent = Yearly Revenue = Annual Rent Revenue = % On average, don't spend more than 7% - 10% of your gross revenue on office space.

15 Cheeseburgers Create Other Streams of Revenue

16 Example #1 Webinar Annual Income = $100K Up front costs Your time = $5000 Microphone = $200 Total up front cost: $5200 Monthly membership cost = $100 Monthly revenue with 10 $50/month = $500 Net Gain = $400/month or $4800/year But... 5 years 88% ROI

17 Example # 2 Education Therapist Adding therapy for children as well as adults Cost of class = $2000 Hourly rate = $ hours of your time/loss of income = $4000 Total Cost = $6000 Break even = 30 $200/session

19 Example #3 : Bad Hair Day Hair Salon Profit = $2000/month Tanning Salon next door is losing $1000/month Cost to Buy = $20,000 Risk or Reward?

20 Hiring Employees Screening = Hourly Rate = Hours per Month = Monthly Pay = Payroll Taxes = (Monthly pay x 7.65%) Payroll Processing = Total Liability = Monthly Pay +Payroll Taxes +Payroll Processing $ Total liability/hours worked = true cost per hour

21 Technology Office Equipment Costs Computer Printer Smartphone Software $3000 $300 $500 $3000 Total Cost: $6800 No Risk if your income is $135K/year Or 5% of your revenue

23 Firing Clients Annual revenue = Revenue from your SOB client = % of your revenue from that SOB = If the SOB is more than 5% of your revenue, SORRY you should probably keep that SOB until you can replace the money.

24 Raising Prices 20 clients each paying $6,000/year ($120K) Raise your fee to $7,500/year In Maybe 12 Out 2 6 Count your maybe's as no's 12 x $7500 = $90K Too Risky New Clients

25 Create a Vision for Your Business...I realized that for IBM to become a great company it would have to act like a great company long before it ever became one. Tom Watson, IBM

26 Krane Financial Solutions West Olympic Blvd. Suite 200 Los Angeles, CA Like my Facebook page: Follow me on

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