Why professionals are poor, part I

Every CEO masters the equation R = MV (return = margin X velocity).

For non-financial people, let's say that Earnings = Quality of Value X Quantity of Value.

Quantity of Value refers to the number of people who actually use one's services.

Most professionals are good are creating value. At the same time, most professionals have only ONE employer.

For a professional earning $60,000 a year, the equation then becomes:

$60,000 = $60,000 X 1

Obviously, to borrow from Eli Goldratt's "Theory of Constraints" jargon, the bottleneck is the number of employers (which is 1 in this case).

To make more money, a professional only has to offer his services to a second employer, or:

$120,000 = $60,000 X 2

The problem, of course, is that providing professional services requires physical presence, and a professional can simply NOT be at two different locations at the same time.

So how does one solve this problem? After all, this is a problem worth solving because, as illustrated above, it could DOUBLE one's income!

The success secret lies in a concept called "service inventory."

(more to come)