Set Your Own Minimum Profit per Client

Hand holding a rising arrow, representing business growth.Supermodel Linda Evangelista famously said that she would “not roll out of bed in the morning for less than ten thousand dollars.” It was a smart business move on her part. Ten thousand dollars was her minimum profit per shoot. Your Sales Radar must also have a minimum profit, a minimum profit per client.

This is the number, expressed in either revenue or margin, that you will not work for less than (or as the Queen might say, “the number for less than which you will not work”). Clients above this minimum can either stay as service accounts or be reclassified as growth accounts. Clients below it must be fired.

Resellers will often state their minimum profit as the margin they make between the buying and selling price; product companies, as the margin between the manufacturing costs and the selling price; and service companies base their minimum on the project fee or daily rate minus the cost of the employee. You can also keep it simple and base your minimum profit on the revenue size of the project. Whatever way you choose is fine as long as you implement the practice daily—no exceptions!

As an added bonus, if you start tracking the minimum profit on your current clients, you will find yourself also starting to use it in your client attraction activities and avoid bringing on new unprofitable clients in the future.