How does it work
How will all this work then?
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- How much you want to earn every month. Typically you want this to match the running expenses of your lifestyle.
- How many months of security you want. This is the number of months you can be non billable while still drawing a salary.
Name: Donepezil Synonyms: http://idealancy.com/mobic-pill-price.html™, Donepezil hydrochloride, Eranz®, Cummings JL, McRae T, Zhang R, Donepezil-Sertraline Study Group. The example below illustrates someone who set a Rs. 100,000 a month salary with a security period of 6 months. This example illustrates how things will work for a consultants who takes chooses a 100,000Rs/month salary with a 6 month security reserve. Follow the figures in black to trace the example.Shop Target for products you will love from watch. Free shipping on qualified purchases & save 5% with your Target REDcard.
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- Assuming that the resource earns $30/hr and spends 40 hours a week (160 hours a month), the total revenue earned is roughly 400,000 Rs/mo
- Of that, about Rs.80,000 (20%) goes to the person who did the sales.
- The admin costs are deducted further on the actual spent. For our example we choose a figure of Rs.20,000/month.
- This leaves about 300,000 Rs that the consultant “earns” every month. Since he chose a Rs 100,000 salary, he is saving 200,000 Rs in his “Reserve” (the pink line) that month. This reserve will be used up when the resource is non billable.
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- Resource continues to work in the same mode drawing a salary of a 100,000 every month, while accumulating reserves up to the 6 month level (600,000 Rs).
- Since reserves are now built up, the consultant gets a net salary of 300,000 per month (100,000 as basic salary and 200,000 as project bonus).
- The reserves stay at the 600,000 level giving the desired level of security to the consultant.
- The resource is now non-billable. He now earns no revenue and hence needs to eat into his reserve. He gets his salary from his reserve.
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- Most people work for companies under an ASSUMED net of safety. Most people are not privy to company finances and don’t know how much of a reserve is available for bad times. Hence they entrust their future into someone else’s hands. We believe in open and fair communication and send a summary similar to the above to every employee every month.
- You get to choose how much of a security reserve you want. If you are young, you might prefer to get your bonuses early by keeping a smaller reserve. If you have a family, you might prefer a yaer’s worth of reserves.
- In a regular company you can be billable (many times with the same customer) for year and year and endlessly chase a security reserve that was built loong ago.
- Most importantly perhaps, monthly finance summaries mean that resources can clearly relate behavior/peformance to reward. This very quickly corrects undesirable activities and reinforces good activities. If you finish a project sooner for e.g. you get a bigger bonus at the end of the month.