Entrepreneurs can’t avoid risk, but they must mitigate it. When you leave your job to open a business, you take a big risk. Maybe you do some research, or maybe you just go with your gut. Every decision you make after that first one compounds your risk.When you make decisions without data or perspective, your business becomes shakier and shakier. And without a solid foundation, you won’t survive many bad guesses. Removing the Guesswork Mentors provide perspective. Mentors provide experience. And with the new Two-Brain Dashboard, you can actually test out your decisions before you make them! You don’t have to guess anymore. For example, if you’re getting new clients but still feel overworked, you might decide it’s time to hire a general manager. But this is your first salaried hire—can you afford it? Will you exceed your salary cap? Here’s the exercise that will help you mitigate the risk: If you’re in the Two-Brain Family, open your Two-Brain Dashboard.First, add the cost of the new staff person into a future month. In this example, I added $2,000 to September 2019’s Staff Pay because the only change will be a new hire for $2,000. Next, add the revenues created by the new role. Be conservative, but remember this: Every staff person should create at least 2.5 times the revenue required to pay him or her. This rule even applies to the cleaner, because you’ll be working on sales and marketing while the cleaner mops.In this example, the new staff person will launch a Two-Brain Kids program, with expected revenues conservatively estimated at $600 per month. Add your other expenses as if they’ll be the same because we’re only measuring one variable (the new hire): Obviously, our Operating Profit is down by $1,400, and our Staff Percentage is out of whack, which brings our Profit Percentage down. But this sample company is still in the black, so it should take the next step: ...
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