Re:Tell HN: 1k MRR is not 1k salary
by shoo on Wednesday November 11, 2020 @02:38AM
(#25056294)
Yup, re: the third point, in essentially every business, owner-operator's profit will be a lot less than revenue.
For an arbitrary example, here are some numbers of a tiny public company that's been operating for over 30 years: $75m annual revenue, about half of which is recurring software subscription revenue. The net profit for the shareholders of the company after tax is $8m, so about 10% of revenue. Of the 90% of expenses, the C-suite and board are collectively getting paid around $2.7m, so call it 4% of revenue.
For an arbitrary example, here are some numbers of a tiny public company that's been operating for over 30 years: $75m annual revenue, about half of which is recurring software subscription revenue. The net profit for the shareholders of the company after tax is $8m, so about 10% of revenue. Of the 90% of expenses, the C-suite and board are collectively getting paid around $2.7m, so call it 4% of revenue.