HRJR's Businessman Moment

 

People often ask me ... "Why do you always break everything down to how much it costs?"

Well, I learned to appreciate calculating the financial aspects of a project or deal when I learned how TLC sold 10 million records and went BROKE:

1. Every record is broken down into 100 points. In TLC's deal each point was worth 8 cents.

2. TLC (as a group) received 7 points, or $0.56 per record.

3. 10 million records at $0.56 = $5.6 million.

4. The record company recouped $3 million for recording, marketing & promotion expenses leaving $2.6 million.

5. From that, the IRS took 50% ($1.3M) in taxes.

6. $1.3M split three ways = $433,333.

7. Money left after buying a home, paying bills & "living the life" .... $0.00.

You see ... when you know how much something costs you in the beginning and how much it will cost you along the way, you can better project how much you'll have at the end.

In ANY deal, it's not about how much money you make ... It's all about how much money you KEEP!