Chart of the Week: 11/10

Founder Income vs Firm Size

The Path to Profits in Professional Services

1- ~years 1-2 custom work = margin in the teens
2- ~years 3-6 standard work = margin in the 20s
3- ~years 7-9 offshore work = margin in the 50s
4- ~years 10-12 tech-enabled work =margin in the 60s
5- ~years 13+ productized recurring work = margins in the 70s

Chart of the Week: 11/03

Founder Income vs Firm Size

Founders of Professional Service Firms Earning $1+ Million

Collective 54’s Chart of the Week shows the bigger the firm, the more money the Founder makes. The data reveals three clusters:

1) 1-50 employees = Founder income $100k-$200k
2) 100-150 employees = Founder income $1+ million
3) 200+ employees = Founder income $1.5 -$2 million

Interesting note: Firms run by co-founders making less. Why? Profit pool getting shared by more than one person.

Lesson? Scale.

Chart of the Week: 10/27

Price Increase per Industry

Stop Giving Away the Farm.

This is meant to be a wake up call for professional service firms.

For Heaven’s sake, raise your prices. Your input costs (wages) are up, so you must raise prices or your margin gets crushed.

Clients are paying more for everything BUT your services. Don’t believe us? Here is some proof.