Here, I explore history, mythology, and the deeper forces shaping our world — and how men and families can prepare for, and adapt to, these times of great change.
One number
Most owners can quote their revenue to the pound. Almost none of them can tell you this number: of every pound you bill, how much actually arrives?
The published numbers say most businesses shouldn't be confident. Clio's benchmarks for law firms put the median at 88% of billable work even being invoiced, and 93% of invoices being collected. That compounds to roughly a fifth of the work being done and never fully paid for, at the median, while everyone works flat out. Law gets measured; most trades just don't look.
You can find yours in twenty minutes. Take everything you invoiced in the last twelve months. Take what actually landed in the bank from those invoices. Divide one by the other. If you're above ninety-five, close this email with my blessing. Most owner-run businesses sit somewhere in the eighties and have never looked.
If your customers pay up front, the leak just lives elsewhere. Refunds, credits, work redone for free, hours nobody billed. Different pipe, same question: of every pound earned, how much stays?
Here's what a point is worth. On £500,000 of billing, every point below a hundred is £5,000 a year, gone. Not lost to a competitor or a bad market. Just never collected, which is the most expensive way to do work: completely, and for free.
If you know an owner who's never looked at this number, forward this to them. It might be the most profitable email they ignore this year. And if you've just worked out yours and it starts with an eight or a seven, reply with it. I won't laugh. I've seen worse, and I've seen what happens six months after someone finally looks.
David
David Schofield · Purpose In Action
P.S. If this was forwarded to you: I'm David Schofield. I install the operating systems founder-led firms run on. If your number starts with an eight or a seven, write to me at david@purpose-in-action.co.uk.
Purpose In Action Coaching & Consulting
Here, I explore history, mythology, and the deeper forces shaping our world — and how men and families can prepare for, and adapt to, these times of great change.
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