Business Numbers

As you’ve seen from my previous posts, I like numbers. This is weird considering math was my worst subject ever. Nevertheless – our lives are constantly being run by numbers in one way shape or form. So as I was walking around a local mall the other day I saw the opportunity of a lifetime. And there was a contact number to go with it.

“This could be your little store!” said the sign. In many malls you’ll find kiosks that are in the middle of the walkways aside from the full sized retail stores. Another way for the mall to get more money for its space. Smart, in my opinion. And there are always lots of different options at these small kiosks. Hand made jewelry, cell phone cases and accessories, body mod jewelry, hair products, toys, hand bags and so on.

Now, being a business owner I was curious – what would the cost be to own my own little store in Coquitlam Center? So I called the mall admin number that was on the sign.
A polite woman answered and advised me that to rent that kiosk I would have to pay as such: Oh – this is a 10×10 kiosk by the way. My computer corner desk is a bit smaller than these.

January – August: $1,000.00
August – November: $650.00
December: $2,000

A week.

My jaw almost hit the floor. And the prices could go up from there depending on where in the mall you are. In areas near the center court where there was more foot traffic these prices could go up!

So let look at a year in business for My Little Store.

$1,000.00 x 4 weeks = $4,000.00 x 7 months = $28,000.00
$650.00 x 4 weeks = $2,600.00 x 4 months = $10,400.00
$2000.00 x 4 weeks = $8,000.00
Total Rent costs = $46,400.00

Add a business licence to operate. Add insurance (might not be necessary since it could be included with the rent/lease). Add theft budget. Add purchase cost of merchandise.
As if the lease/rent wasn’t enough – if you want to have a bit of time away to tend to other businesses or to be with your family – you would have to hire an employee!

Retail generally will be at minimum wage. $10.25/hr x 20 hrs/week = $205.00 x 4 weeks = $820.00/mo if the employee is part time. If full time: $10.25/hr x 40 hrs/week = $410.00 x 4 weeks = $1,640.00/mo.
So over the course of a year your employee will cost you $9,840 if they are part time. If they are full time they will cost you $19,680.00.

So with the numbers we can confirm that this business will cost us at minimum either $56,240.00 (PT Employee) or $66,080.00. And we know that with business licence stuff and merchandise purchases etc these costs will be going up. Holy crow!!! “My Little Store” has a HUGE frigging cost!

And guess what….there’s no guarantee that this business will be profitable. In fact most business’ fail within the first year if not first five years! And do those business owners get their money back? Of course they don’t! They have to cut their losses and liquidate if they don’t make it. Do I see a lot of negative blogs about how business ownership is a scam when so many people don’t make it? When so many people and places go out of business? Do people cry that the system scammed them? They might blame the failure on the economy or bad luck or some other such thing. But aside from that, its simply accepted that this is the way it is. No big deal, right?

I pay something like $75.00 for my IBOAI and business licence.

$49.95/mo pays for my own customizable website. Maintenance and upkeep are included. It links directly with my manufacturer and service provider. For which I do not pay a cent for my merchandise. Unless its for my own personal use or for demonstration purposes.

$36.95/mo pays for my own toll free contact number. Its a free call to me from anywhere in North America. Its my fax service, dedicated business email and voice messaging service used to stay in constant communication with my organization and my coaches. Everything in one place keeps things simple and the many features make it useful to run my business on a daily basis.

$25.00/mo pays for weekly training, education and motivation that is in direct relation to my business and my industry so that myself and my organization can get uplifted and motivated and educated. And they can do so without me even being present.

$49.95 x 12 mos = $599.40/yr
$36.95 x 12 mos = $443.40/yr
$25.00 x 12 mos – $300.00/yr
Business Licence – $75.00/yr
Total Annual Cost – $1417.80

There are other costs for functions etc but at this point which business seems more affordable? “My Little Store” that can fit only a few products or a large amount of tiny ones that have a small markup potential that costs me more than my current yearly income just to run? Or my online mall that has access to over 450 products that I, and almost everyone uses on a daily basis that can cover its own cost?

While the sign was cute, I think I’ll stick with what I got. Thanks anyway for the opportunity Coquitlam Center!

~ C

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The Dream Or The Nightmare

In my current job I deal with a lot of complaints every single day. Angry or annoyed people are forwarded to me one after the other. Why are they angry? Their cable, internet, home phone or wireless pricing has gone up due to promotions falling off of their profile or they have been billed overages that they were not expecting or are disputing, or our customer service was unsatisfactory during a recent interaction or one of our technicians did a bad job and so on.

As a telecommunications account manager once the issue comes to me the issues are a rinse, wash, repeat scenario with a few odd ones here or there. If people escalate enough to get to me then depending on what the issues are I have additional options to provide a fair resolution depending on the situation. The biggest overall reason for calls to get escalated up to me is from long tenured customers upset that their bills have gone up. And its not because the company I work for raises the cost of services every month (if there’s a price increase for a service its once annually). The pricing has increased because they were getting a discount on their services which had since expired. Now, as the company is in business to make money, any discounts are not made or meant to be given for life. In fact any promo you see from any telco company will go for a 3, 6 or 12 month period depending on the competition at the time and many other factors. Sometimes you’ll get a 24 or even 36 month option here or there but these are few and far in between. But at no point are there discounts or promotions that last for life.

And so when all options through all of our different customer service teams have not provided a solution (normally they do for the most part) they escalate up to me. The biggest line(s) I hear from some of our longer tenured customers is:

I’m a senior. I’m on a pension. I’m on a fixed income. My pension isn’t going up but your pricing keeps going up and I can’t afford your service.

For many baby boomers and seniors, this is a legitimate concern. Depending on their occupation, the company they worked for and what kind of pension plan they had, each person’s pension wages are different – but at the end of the day they’re 100% right. Their pensions will not go up. Its clear as day that the cost of living has significantly gone up and isn’t slowing. Whether a discount falls off of their TV service or gas prices continue to go up or the cost of food keeps slowly increasing….things are going up. What are they going to do? As far as I’m aware defined benefit pension plans are not made to go up as the rate of inflation goes up. And these apparently were the “good” pension plans. Anyone my age who can actually get access to a plan probably has access to defined contributional pensions where the company will match whatever we put in. Most companies can’t afford to offer defined benefit plans anymore. (Though CEO pensions and retirement payouts are in the millions…..but that’s a whole other topic….)

So that brings me to my topic. What a nightmare. Facing that in my “golden years”. Being held hostage; hoping my cable or internet provider will renew my discount for another year because I can’t afford the regular price on my fixed income. Having to consider switching companies to get the promotion de jour every 3 – 6 months. That’s horrible! It breaks my heart when I talk with these seniors who supposedly did everything right and at the end of it all they earned that golden ticket – the pension. And they’re barely getting by.

That scares the hell out of me. That’s my nightmare. Dean talks about it all the time – “You’re either motivated by your dreams or your nightmares.” So when people ask me why I’m doing this “thing” – I share my nightmare. I’m 31 now – the average college grad makes about 2 million in their working years / lifetime. Yet with the way cost of living is going up along with inflation – there’s no way that will be enough. If these seniors who got a defined benefit pension aren’t getting by and I don’t even have that – how in the blue heck will I ever be able to afford a comfortable “retirement” on a defined contributional!?

Well – I could get a higher paying job to start. However, when 60% or more of college grads aren’t getting jobs in their field of study – I don’t like my chances. I’d have to head back to school myself. So add on student loan debt to be paid off before I can start really putting in extra stuff away towards retirement. Oh there’s RRSP’s and TFSA and compounding interest and so on. But hold up….these seniors had access to these as well (minus TFSA) and they’re still having issues!

Since I was a kid I was told to get the good job. Why? So I can get paid well and get a good pension. That’s what my grandparents and my mom knew. So that’s what was taught to me. But when I look at all of these people having a hard time – that’s scary. Now obviously there are many seniors who are doing just fine. But during my conversations with them while working and with many that I meet on a day to day basis – there’s more having a tough time than not. And I’m walking on that path right now. You can tell the future. I bet you didn’t know that did you? Look at people who are in your field or have retired from your occupation and that my friend will be you plus or minus a bit depending on personal choices in life. You will be in a similar situation. And if you think that looks pretty sweet depending on what that is – really look into that success if that is what you see. Success isn’t just money. Anyone can make a good wage. But how is the marriage? How is the time to work ratio? Is there any family time? Are both spouses working all of the time? Do the babysitters and daycare workers see the kids more than the parents?

It all comes down to the question – what motivates you? Are you motivated by a goal or dream you’re working towards? Do you have a goal or dream or a vision for your life? Or are you running from your nightmare situation? Are you motivated into action to avoid a negative experience or outcome that you see yourself potentially having to live through?
If you don’t have a dream to work towards or a nightmare to work away from – it might be a good investment of your time to figure that out. Because a failure to plan is a plan to fail. You better be doing something to get to your dream or to avoid that nightmare. It doesn’t have to be the Amway business. But it needs to be something. It just so happens that I’ve seen a lot of great experiences that this business has provided to others.

Last Friday there was another retirement party in Calgary. A young man who worked as an occupational therapist walked free one day before his son’s first birthday. What a present to give – a full time father. Now there’s a dream to work towards.

~ C

Spring Leadership 2013 – The Aftermath

Man, oh man. What a killer function we had at the Calgary Stampede Corral. I can easily say that there was major impact from each and every speaker. The house was fired up and we’re looking to get going with some growth coming out of this great function moving forward.

Here’s some awesome quotes that were shared and some pics below!

Firstly from John Maxwell:
* You can tell you’re on the road to success because it’s all uphill.
* People are anxious to change their circumstances but they’re not anxious to change themselves first.
* You must first see value in yourself before you can improve yourself.
* Your self image is the lid of your potential.
* Motivation gets you going, discipline keeps you growing.
* The secrets of a successful person is not in the answers they give but in the questions they ask.
* Its hard to improve yourself when you only have you to follow. Follow those who are worth following.
* Stop thinking ‘can I?’ and start asking ‘How can I?’.
* Don’t stake your future on just one door. It may be locked.
* Growing yourself enables you to grow others.

Other notable quotes:
* If you want to go fast, go alone. If you want to go far, go with others.
* A big business is just a small business with a system.
* There’s one business that can provide financial independence – there’s many jobs out there to pay the bills.
* If you don’t have faith in the future you can have no power in the present.
* If something is important to you, you’ll find a way to make it happen. If its not important, you’ll make an excuse why it didn’t happen.
* When one dream becomes real, 1000 others become possible.
* You can’t push someone across the finish line when they won’t even enter the race.
* Life is 10% of what happens to you and 90% of how you react to it.
* Everyone is trying to work full time so that they can live life in their spare time.
* First build the person so that the person can then go build the business.
* The grass is never greener on the other side. The grass is greener where you take care of it.

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Happy Spring!

~ C

Spring Leadership And The Numbers

Well its getting close to that time again. Vancouver is really getting the sun finally and its gorgeous. I’m getting sunburns already! But then, being a red head I burn indoors anyway I’m sad to say. But along with the flowers in our yard blooming beautifully, we’re getting set to hit the road for Spring Leadership Thursday night. There’s going to be two busses heading out that way so we can sleep on the way there, get in for about noon local time and get ready for the evening. Man is it ever going to be a packed weekend. From the awesome responses we’ve heard from the Spokane function, Calgary is going to be nuts!

But as we get our group prepared we once again have a lot of negative online feedback regarding these “Major functions”.

Brainwash sessions!

Waste of money!

Those speakers make all of their money with ticket sales and not the business!

You’ll lose a lot of money paying for everything!

So, like I’ve been doing with everything else lets look at what some of these numbers look like and how they break down. I apologize in advance for the length of the post. Hold on to your butts.

Transportation
Normal greyhound bus ticket cost: $158.00 / person one way (if ordered online). $196.00 / person if ordered standard.
So for Nikki and myself that would cost us minimum $632.00 round trip. But we’ve booked a private charter for the teams out here going to Calgary – so we’re paying $125.00 / person round trip. So this work out to $250.00 for transportation.
Running Cost: $250.00

Admittance
Tickets: $125.00 / person (two guest tickets free) for a full weekend function.
This would come to $250.00 
Running cost: $500.00

Accommodation
Delta Bow Valley Inn: Normal room rates start at $249.00/night. So for two nights that would have run us: $557.76 after taxes.
However, WWDB gets us pricing at: 127.00/night x 2 nights. So we’re at $284.48 after taxes.
Running cost: $784.48 

Noms (aka Food)
When prepping for our trip we bring our own over the shoulder cooler which is stocked with veggies and dip for snacks while at the function as well as pre-made sandwiches etc. This is based on items we’ve budgeted for through our regular food budget.Same goes for drinks – we already have and are bringing our own XS and water. Obviously those don’t last the whole trip and when stretching our legs on the road its nice to grab a hot chocolate or something. Also we would have one or two meals that we would pay for. We bring as much as possible with us to avoid extra food expenses and save money because food and snacks are a huge variable expense that if not managed can wreak havoc on a set budget. So to be fair we’ve set aside $60.00 for additional food/snacks aside from what we bring on our own.

Running Cost: $844.48
Final Cost: $844.48 

$845 dollars! Oh. My. God. That is insane! Why would anyone spend sooo much money on this type of thing? How can anyone afford that? That’s terrible! That’s predatory! That’s a joke!

Well….lets look a the cost of a regular weekend of going to the Calgary stampede….and its not even during the stampede season!
Hotel (as per https://www.deltahotels.com/Hotels/Delta-Bow-Valley/Rooms-Rates)
$557.76
Transportation: $632.00
Guys….we’ve only gotten our rooms booked and our bus there and we’re at $1189.76!!! And for this example we’re not even going to a function! So cross out the function tickets. So lets say you instead went shopping….or to the Calgary zoo or something like that (you have to be going to Calgary for some reason, right?). Your costs will probably at least be going to $1500 if we stay conservative because on top of shopping, tourist things etc. you’ll be eating as well. $1350 if you bring a lot of your own food like us.
Lets say though that you have a fuel efficient car and you drove both ways and you got a cheap little hotel room maybe, you’ll be getting close to the $844 that we’ll be paying with our food included and our function tickets included.

Altogether through our line of sponsorship and via WWDB we have saved $372.00 on our transportation costs and $273.19 on our hotel costs. That’s a total of $645.19 that we saved and did not have to pay to make this trip.

Well I wouldn’t go anyway so that’s $844.48 I would save altogether!

Whether you’re going or not is not the point. If you wouldn’t be going then you wouldn’t have gotten through the process and never would be in business to begin with. The point is, that when making this trip, we’re getting a great rate and pricing overall. With that said, all of these costs have been paid for by our business revenue and tax return.
When we only had us in our organization and our bonus’ cheques were just our personal use and customer volume; because we knew this function was coming up  we could easily save for the bus tickets and the hotel bookings without breaking our budget or going into debt (like those negative people on the interwebs said we would.) and our bonus cheques would help subsidize it so it became an affordable trip.

With that being said I will once again point out that these major functions are all laid out to a business prospect before they even get into business. They are told the dates and the pricing and shown how they can fit this into their existing budget. If their budget cannot support these requirements we do not launch them. Seems pretty fair doesn’t it? Doesn’t seem very dishonest or predatory does it? That’s why we have the process so that potential new business owners are not blindsided or go backwards money-wise because of the business. ( See “The Process” )

So then what about all of that money / revenue for tickets? You’ve probably heard a lot about how the speakers make all of their money through the functions (certainly not the business – that’s not possible! Hrmph!).
Well, once again – lets look at the numbers.

Ticket Price: $125.00 (provides two free guest tickets)
Calgary Corral Capacity seating: 7,475 (assuming a sell out).
Tickets sold x $125.00 = $934,375
Now because each business owner gets two free guest tickets to give out, even with a sell out, not all seats will have been charged due to the free guest ticket rule. So I’ll try to be very conservative and say 35% of business owner will use one of two guest tickets….considering the Alberta market is going absolutely insane right now I’m confident that more guest tickets will be used but conservative is fair and safe. Last year the venue was for only 2,000 to 2,500 people and we’ve outgrown that. So,
35% of 7,475 seats = 2,616 seats will be revenue neutral.
As such that would leave us with 4,859 paid attendees.
So that adjusts our numbers to $125.00 x  4,859 attendees = $607,375 – and this is assuming there is a sell out.

Wow…..that’s a good chunk of change right there, isn’t it? That’s almost a low founders diamondship yearly income right there (As per WWDB Business Overview which has been approved by both Amway and necessary attorneys on all sides to be a legitimate claim).
Now we can’t be so naive to think that all of this is profit goes right into the WWDB coffers. So I did some research as best I could.
I used the cost of services for the Calgary Corral from the 2013 outline found here: http://venues.calgarystampede.com/upload/media_element/25/08/2013-exhibitor-order-form—may-1-2013-to-december-31-2013-inclusive.pdf

WWDB brings in and utilizes most of their own employees: but since I don’t know what those kind of employees would be paid I went with the next closest thing I could find which was the pricing for personnel from the 2010 Calgary Stampede venue guide found here: http://venues.calgarystampede.com/upload/media_element/17/02/event-services—planners-price-list-2010.pdf

As of this entry the Calgary stampede sales department has yet to email me or return my calls regarding the rental cost of the Corral. So I had to use a stand in as close as I could to the Corral – for this comparison I used the Vancouver PNE Agrodome. As of this entry the Agrodome holds a Capacity of 5000 people. As such the pricing for rental was advised at:
$5,000 move in (Friday Evening session)
$10,000 Day long Function (All day Saturday)
$5,000 move out (Sunday Morning/Afternoon session)

Because the Corral is bigger with a capacity of 7,475 people, I increased the numbers accordingly:
$7,500 move in (Friday Evening session)
$15,000 Day long Function (All day Saturday)
$7,500 move out (Sunday Morning/Afternoon session)

Pricing is grouped in categories. It took me awhile to pick out what stuff World Wide would use so I doubt you’ll want line by line. If you do, you can look at the pdf’s above. All costs (excluding employees/personnel) include Alberta’s 5% GST tax. So….here we go….

Parking services for speakers/employees: $1,469.63
Electrical Services: $1,168.65
A/V and general Equip: $5,245.01
Telecom (Internet/Phone/Fax): $1,254.23
Personnel / Employees: $9,166 ( Building Maintenance / Nurse and medical / A/V techs / Video recorders and CCTV / Parking attendant(s) / Security Guards and supervisor / Ticket sales and supervisor / ticket takers and supervisor / Forklift and Man-lift Operators)
Building: $31,500
3rd Party Speaker: Dr. John Maxwell: $42,000 (as per approximate rates from  http://www.bigspeak.com/john-maxwell.html)
Additional Insurance and/or non-refundable deposits may be levied on top of this but I don’t have a way of getting those numbers.

Total Cost: $91,866.23

So if we take that away from our projected revenue that leaves us with an excess $515,508.77 in revenue from this event. Wow! That’s still a good chunk of change for WWDB.

How much of that helps pay for the cost of administration / office employees at headquarters we can’t know. How much of that goes towards the utilities at Headquarters, we can’t know. But there are at least 40 employees at the head office over several divisions. We can’t know the salaries there but lets just average it out since some will be office admins, front desk clerical, audio/visual editing, managers and so on I’ll go with $40,000/yr per employee…keep in mind I’m being conservative here just to be fair. Some may make more or less than that based on what they do and so on so I figure that’s a fair average. So $40,000 / yr multiply by 40 employees = $1,600,000. So that 515 Grand that World Wide made at the gate for Calgary leadership only covered part of their employee overhead for the year. And like I said, we haven’t included property taxes, insurance, utilities and so on. So as we go through all of these numbers bit by bit, you can see that WWDB has A LOT of expenses to cover as a business. Which is what they are. They are a support, training and facilitation system to help people grow to be able to build a business powered by the Amway corporation.

But….but those dirty diamonds and those cheating speakers downline from them! They’re getting paid to talk at those functions. They make money off of those attending! How dare they do that!

If a speaker gets paid at all, a term “supply and demand” comes to mind here. When there is a demand, there is a price. Why should these people who have a successful business take time out of their lives, time away from their families, away from their hobbies, away from their friends to train and speak to other people who are not part of their organization? They have already successfully helped many others create wealth and financial benefits to get to their level. So why should they do that? Simple answer – there’s a benefit to do so. A benefit to them and their family. They are providing a service. I don’t know about you but I was brought up to pay people for service rendered. They have already spent hours with their downline to help them or else they wouldn’t be a Platinum – Diamond.

Let’s put this in another light to make my point.
Dr. John Maxwell is a world renowned author and speaker on the topics of Leadership. On top of authoring many books he also does training workshops and seminars.
As per http://www.johnmaxwell.com/events/public-workshops/ you will find that a one day seminar will cost you $349.00. That is for one day and does not include transportation to / from the event, accommodation or food.

Now, please allow me to sit and wait for all of those people to start screaming foul and howling about the unfair way that John is cheating his clients and attendees.

***

Oh there’s not? Now that seems quite odd. I wonder why that is….
Lets look at another example. Tony Robbins.
Tony has a conference called “Unleash The Power Within” and its taking place in Chicago this July. Details can be found here: http://www.tonyrobbins.com/events/unleash-the-power-within/#ordernow
You have five tiers of pricing – General / Executive / VIP / Diamond / Diamond Premiere
They range as such: $595 / $795 / $995 / $2,095 / $2,595

That’s not including your accommodation or transportation to Chicago guys.You do get two free lunches with the Diamond and Diamond Premiere, but everything else is on you.

So….lets get this hate train started…..hmm, whats that? There’s no hate blog being updated daily on how Tony Robbins is a scam artist? No daily diatribe on how the people who go to his conferences are being brainwashed? How it’s a waste of money? No? Nothing? Can you see the sense of hypocrisy here?

These two men are well known and come very highly commended and recommended. They garner a very high price for their services because they have created a demand for what they know and what they teach. World Wide Emeralds and Diamonds have done the exact same. They have created a demand for what they know and what they teach. Would you expect Tony to do a few talks over a weekend for free? I’m sure you would be laughed at if you even mentioned the thought.”But he’s sooo successful already…” So? Does that mean he should now do his work gratis? That would be kind of stupid of him, wouldn’t it?

So why the hostility towards WWDB leaders who may or may not earn a kickback for taking time out of their life?  The teaching they provide can be directly applied to the business their listener’s are involved with. Other conferences have great mindset and attitude teachings. But a person could easily walk out and ask himself, “I’ve learned all of this great mindset and attitude stuff!  But….what can I apply it to?” Because there’s is no “guarantee of results” would that not also fall under a “scam alert” from these negative bloggers? The question is rhetorical, but my point remains the same.

If you were asked to fly to another city to do a talk on your job and how to succeed in it, would you go? Would you pay for your flight and hotel for that privilege? I doubt it. It would cost too much and you’re too busy working your job anyway. Now, what if your company told you they would pay for the flight. Well, the hotel still isn’t cheap….it still wouldn’t be worth it. So what if the company paid for your flights, your hotel and paid your regular wage for going there to talk about being successful in your profession and a bit more for the time spent away from home. I’m pretty sure 90% of the time, you would say yes.

So for WWDB speakers, that’s the scenario. Why would they spend their own money to fly somewhere when they don’t need to or have to? Why would they pay for their hotels? Their organization is set. World Wide covers those costs. Where do you think the money comes from to pay those expenses aside from all of the other costs for World Wide Group? Major Function revenue. Its not like its a one time windfall where a speaker gets $75,000 to speak for one function.

I like to challenge people to really look into why they think the way they think. Thinking that World Wide speakers are total filth for possibly getting paid to provide education, training and motivation for their direct industry, but for others its totally OK. The hypocrisy is entertaining to a point, but also quite sad. This will be my third Spring Leadership. And so far I can easily say that I have learned new things each time. I have been able to directly utilize some of these lessons in my own growth as well as my business growth. And that is easily worth the 125.00 ticket. It certainly beats the price of some of those other conferences. I can easily say that what I’ve heard, witnessed and learned can be used directly to help both me and my business grow.

Have a great weekend! I know I will!
~ C