Now let's take an example of the possibility of your business. Imagine you sell 100 clients the first year. Then let’s count the average payroll service fees, with additions of course. It will be $2000.00 on an annual basis. So, the retention rate of clients will be 95% and the growth in service fees will be 5% a year. | Year | Clients | Avg. Revenue | Total Anual Revenue | Your Annualized Revenue | | Year One | 100 new clients | 100 new clients | $200,000.00 | $40,000.00 | | Year One | 100 new clients | $2100.00 each | $210.000.00 | $42,000.00 | | | 95 old clients | $2100.00 each | $199,500.00 | $39,900.00 | | | | | Total year two: | $81,900.00 | | Year Three | 100 new clients | $2205.00 each | $220,500.00 | $44,100.00 | | | 95 old clients | $2205.00 each | $209,475.00 | $41,895.00 | | | 90 older clients | $2205.00 each | $198,450.00 | $39,690.00 | | | | | Total year three: | $125,685.00 | | Year Four | 100 new clients | $2315.25 each | $231,525.00 | $46,305.00 | | | 95 old clients | $2315.25 each | $219,948.75 | $43,989.75 | | | 90 older clients | $2315.25 each | $208,372.50 | $41,674.45 | | | 86 oldest clients | $2315.25 each | $199,111.50 | $39,822.30 | | | | | Total year four: | $171,791.50 |
For developing your own anticipation of what you can earn, you can use a spreadsheet. Here you can put in your own assumptions about number of clients sold, average fees, retention rate and price increase.
|