The Income Rollercoaster
I spent most of my professional career working on commission. There was no steady bi-weekly paycheck waiting in my account. I was paid once a month. Sometimes the amount made me feel like a conquering king, and sometimes it was so bad I actually owed the company money just to cover my deductions.
That income rollercoaster takes some getting used to. It is the steep learning curve first-time entrepreneurs and sales professionals face when they step into a world without guaranteed income. The good news is that a shift in perspective changes everything.
Time Is Money
About 275 years ago, Benjamin Franklin wrote an essay called Advice to a Young Tradesman, where he famously said, “Remember that time is money.” His point was practical. Waste your time, and you are not just losing minutes. You are losing the income those minutes could have produced
Fast-forward to today. Let’s consider John, a young man working in customer service at a retail store in Sydney, Nova Scotia. The market values these skills at the minimum wage of $15.70 an hour for 40 hours a week. His gross pay is $628, but after taxes and deductions, $471 actually lands in his bank account every Friday.
If we calculate John’s hourly take-home rate ($471 divided by 40 hours) he’s earning less than $12 per hour. Now “time is money” becomes literal. Every hour John works buys him $12 worth of life.
Time is Also Stuff
On his way to work, John stops at a drive-thru. Breakfast costs him $11.48, which is almost exactly the first hour of his workday.
His $224 biweekly car payment works out to $112 a week, which is about nine hours of work. His Netflix and Disney+ subscriptions take another hour. He is working to earn money he has already committed to spend.
In fact, when he adds up all his expenses it’s $350 a week. John works 29.1 hours a week just stay afloat. That means John works all day Monday, Tuesday, Wednesday, and until 2PM on Thursday just to meet his obligations.
Now, let’s look around his home, and we see that every item has an imaginary clock floating above it, showing how many hours of his life he traded to own it. He trades his time for money, then trades that money for stuff. His time becomes stuff.
Dollars and cents are simply symbols for hours and minutes. They are a convenient way to create emotional distance from the reality that, for many people, it takes three or four full shifts to earn a single discretionary dollar.
The Entrepreneur’s Clock Runs on Sales
For entrepreneurs, the math is the same but the unit of measurement changes. Your clock does not run on hours. It runs on sales.
When I worked in sales, I stopped getting negative commission cheques the moment I knew the exact number of sales I needed to keep the lights on. That became my bare minimum. If I fell short, I could not stay in the job.
As business owners, we need to know three things:
- How many sales it takes to break even with no profit and no loss?
- How many sales are needed to meet our business goals?
- How many additional sales are needed to get you to your personal goals?
Eyeing a $1,200 phone? If your profit per sale is $10, you will need 120 sales above your existing sales target to pay for it. Planning a family vacation? Run the numbers, set the target, and work backward. Everything you want is a specific number of sales away.
Turning a Wish List into a To-Do List
When you measure purchases in sales needed instead of dollars spent, your wish list becomes your to-do list.
The only way to escape the tyranny of an hourly wage is to build a business where your earning power comes from sales activity rather than the market’s valuation of your skills. Sometimes that is not just about more sales. It is about better sales, higher-value customers, or smarter pricing.
When I was new to sales, I quickly learned I could not buy groceries or pay rent with the hopes and dreams I scribbled at my desk. I had to get out, meet people, bring value, and ask for each sale one at a time until I grew my earnings to the level I wanted.
Earning every dollar your business needs changes you. It builds confidence that no hourly or salaried worker can truly understand. Always getting paid the same leads to more of the same. If you want to see real growth, put someone on an uncapped commission plan, and you will see them begin to perform with an efficiency and purpose rarely found in the hourly or salaried worker. As a business owner, you have the authority to put yourself on an uncapped commission plan. Please do it.
Your business plan forecasts the sales needed for the business to succeed. But what about you? Do you know how many sales stand between the life you have today and the life you want? Between now and your next big goal? Between this morning and tonight?
The difference between where you are and where you want to be can only be measured in sales. Measure wrong, and you risk getting lost in the appearance of entrepreneurship. Busy calendars, constant planning, endless discussion, and no real progress toward the freedom you were chasing when you took the plunge to be your own boss.
You can’t manage what you do not measure, and you will manage it best when you measure it right. Measure sales and tap into the endless supply of self-motivation that comes from earning the life you choose.
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Amanda Morrison
This is an amazing article and demonstrates the difference betwen an employees mindset and an entrepreneurs mindset!
NATALIE
So True – if it cant be measured, it cant be managed.