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July 6, 2021

The profit margins of an advisory business

Selling advisory services is a 100% profit margin business.

You show up, sell your time, keep all the money.

Right?

Not so fast. You have to include things like:

  • Your time, which is limited and valuable
  • Opportunity costs (you could be doing other things)
  • Sales conversations (see: your time)
  • Bookkeeping and virtual assistance
  • Transaction fees
  • Professional development (coaching and education)
  • Software expenses
  • Insurance and legal
  • Design, development, and other contract support you need
  • Office space and equipment
  • And a variety of other little things you might not be thinking about

Advisory work is a high-margin business, to be sure. But it’s not all profit. If you’re lucky, it’s closer to 70%.

Running a business is more expensive than people think—even high-margin businesses like advisory services.

Plan and charge accordingly.

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