4 Focuses to make $200+/hour after-tax

Even without fast food or a salon, you can still make $200+/hour AFTER-TAX as a middleman.

What do you sell?

You either sell software (including SaaS), equipment (industrial/medical/data center), houses, vehicles, or something scalable online.

After processing over $2.8 billion in transactions over 10 years, four definitive conclusions is that you need to focus 1) your inventory and 2) your market while optimizing 3) alternatives for your customers and 4) your outsourcing.



Marginal cost bisects average cost at the minima of the average cost.  If you can reduce inventory you will improve your profit by maximizing your output variables.  Inventory turns, is a measure of how many times inventory turns over in a year. The higher the number of inventory turns-or the lower the inventory days–the tighter your
management of inventory and the better your cash position. As long as you have enough inventory on hand to meet customer demands, the more efficient you can be.

Inventory is “frozen cash” the faster you can get it out of the door, the better off you will be. The longer you keep inventory, the more money you lose in opportunity cost. Low inventories will also mean you can afford to sell your product at comparatively low prices. You would be able to sell your product cheaper because you would be able to sell them more quickly.

Everything in life operates on first and second order derivatives. The second order derivative shows that with each added different item in your inventory, the curve in relation to the cost will get steeper as your costs increase but not pro rata with the different items you add. Each different item/product line takes time and effort to sell (the most expensive things), so trying to sell more different items is like trying to fill many pools with 1 garden hose. Its easier to fill 1 pool rather than 2. The solution is to sell less variety but to make more money off of each product line. Consequently rather than spending $100,000 on X different categories of inventory, you can spend the same money on half the variety.


  1. Women
  2. Rich people (people who earn over $137,790 per year in Edmonton) – they control 70% of Alberta’s wealth.

What about men who earn less than $137,790 per year in Edmonton? They simply don’t count – their women control their money – if you’re not selling houses over $500,000 or vehicles over $50,000 then sell what women want.

It’s important to choose your market and your customer. You have to know what the ideal customer wants. Everyone can get want they need, but you will earn more if you can give the customer what they want. When someone wants something they
will pay higher margins compared to when they need something.


Not having any reasonably similar alternatives will mean you lose customers.

Brand your company with a compelling and focused mission that leverages your combined special skills. People get rich by adding value to other people’s lives, rather than just acting as a middleman/retailer.

The path to success is not as clear as the path to failure. So by doing the opposite of 90% of your competitors, it will ensure you will succeed. There is always a choice between status and money. Most people choose status and have more variety rather than being content with a smaller presence and more money.


Now that you make over $200/hour AFTER-TAX (calculated by taking your after-tax income and dividing into the hours you work. ) you know should enforce it. Like Naval Ravikant iterates in his famous tweet storm, “If fixing a problem will save less than your hourly rate, ignore it.  If outsourcing a task will cost less than your hourly rate, outsource it.”

If your problem is business related than you can use your pre-tax hourly rate since business expenses are paid with pre-tax dollars, while residential repairs and maintenance are paid for with after-tax dollars.

  1. Build scalable brand leveraging algorithms and/or employees.
  2. Invest in real estate

Math to Escape the Middle Class

Being part of a certain profession, or earning a certain amount of money does not ensure your exit from the middle-class.  Most people are stuck there because of math.

We focus on the only 3 sources of negative cash flow that matter: taxes, housing and in the case of a scalable business – payroll.  Even the highest earners stay middle-class if they don’t focus on taxes and housing.

Taxes: Everything you pay for really costs you 1.5x-1.8x more since you would be paying for it with after-tax dollars rather than pre-tax dollars. The only expenditures exempt from this rule are business assets and expenditures bought inside a corporation.

Housing: In combination with the taxes above, depending on your tax bracket, your mortgage and your interest rate, a $1 million house will cost you at least $1.5 million (no mortgage and extremely low level of living requirements) and as much as $4 million of gross earnings.

Now Here’s the Math

Regression To The Mean & Bimodal Extremes:  How is that so many high-earners are trapped into the middle-class mediocrity of trading their limited time for money?  In any group, people of high-value/high net worth/high IQ are dragged down by people of lower-value/lower net worth/lower IQ due to osmosis.  If you take advice tailored to the middle-class, by a middle-class advisor, you should not be surprised if you end up middle-class. You need to find someone who is living a life that you want and take guidance from there.  So in short, ignore anything average, and advice from/for average people are to be avoided at all costs. The solution is bimodal approaches from the extremes.  90% safe investments + 10% high-risk investments vs. a mediocre portfolio with limited upside and a possible unlimited downside.  Or mediocre jogging vs. extreme high-intensity training. Other bimodal strategies with exponential benefits: intermittent fasting. The framework to pursue bimodal extremes involves ranking your options in descending order of optionality and open-endedness of pay-offs.

Dunbar’s Number & Via Negativa: The solution to this is to be mindful of the upper limit to how many interpersonal relationships your brain can process (150).  I can never have more than 150 contacts (this does not apply to mass-market businesses, but something so sensitive as advisory to HNWIs can never be mass-market). Most problems are better addressed with subtraction (Via Negativa – Nassim Taleb) To keep negative osmosis from happening in my life, I removed the bottom 50% of people from my life and doubled-down my time on the top 50%. I repeated this process many times until I was down from 1000+ to 150 contacts.  Everyone in my life is either moving up or moving out of my life.  This eliminates the negative osmosis that would otherwise cloud my thoughts with middle-class thinking.

Chaos Theory Feedback Loops: Its nearly impossible to remain middle-class if you focus your actions on receiving a recurring benefit. The best way to start is to reframe all your problems as a function of time and improve year over year (YoY). This means you will get richer due to superior/scalable abilities and your riches will beget more riches. This will result in a knee in the curve non-linearity compared to the linearity of the middle-class.  All decisions compound (both for and against you), and this makes money eventually become perpetual so the path is clear: prioritize the maximum effort to get compounding on your side (make sure your inflows compound more than your outflows).

Chaos Theory and Dynamics: The middle-class think in simple terms of cause and effect, when the reality is that the outcome in sensitively depending on initial conditions, so the cause will result in empirically complex 2nd, 3rd, 4th, …. nth steps. It’s better to fix systems  Via Negativa – Nassim Taleb, since the middle-class solution to add more things to their life make things worst.

Inversion: A famous problem-solving technique in mathematics can be easily used to re-frame everyday problems.  Whatever question you ask yourself – ask yourself the inverse question. The path to success is not as clear as the path to failure. So by doing the opposite of the path of failure ensures you survive, and as Taleb reminds us you first must survive in order to succeed.

Pareto’s principle: The majority of a given effect is due to a minority of the possible causes.  You have a limited store of attention and time, so to create the aforementioned feedback loop you need to prioritize high-impact activities. Maximize the results by minimizing the stuff that doesn’t count: don’t check your e-mail more than 3 times a day, stop watching TV, surfing the net,  playing video games, and taking unnecessary vacations.  Make your own life great instead of engaging in escapism.  Make your life so good you don’t need a vacation. The more you shift your attention/time to high-impact activities the higher your overall benefit due to the compounding.

Game Theory and the Prisoner’s Dilemma: Will allow you to recognize and exploit the irrational decisions of others.

Calculus: Marginal cost bisects average cost at the minima of the average cost. The optimal point of production in terms of profit by maximizing your output variables can be determined by cost and revenue functions.

Here are some more math hacks for your scalable business.










Customer is King

The most important things in valuing a business are detailed financial records, well-documented operations (SOPs) and customer metrics: the long-term value of the customer, the cost of acquiring customers, revenue, and lost customers.

Last week a dozen of our customers were listed as 2018 Golden Fork winners so we will start with the fast food group: Customers on average visit a particular fast food place once or twice a month (we will use the conservative mid-point of 1.5x/month).  This customer will patronize the fast food place on average for 3 years.

For a nail salon, your customer comes on average twice per month but will patronize your salon on average for 5 years.

The long-term value of customer = Average Monthly Revenue per customer x Average years a customer will patronize your business.

Cost of acquiring customer (CAC) = Advertising expenses / # of new customers added

The long-term value of the customer: Cost of acquiring the customer.

This ratio will indicate if you are spending too much or what we found more often is that you spend too little and are missing out on growth opportunities.

In a fast food example, a customer spends $20 x 1.5/month x 36 months = long-term value is $1,080.

In a nail salon example, a customer that spends $50 x 2 /month x 60 months = long-term value is $6,000.

This should also serve as a reminder to value your customer for their long-term value and not just their $50 refill or $8 Pho Bowl.  The math also reminds you that it is better to have one ideal long-term customer than it is to have more but poorer quality customers.

There will come a point in every business owner’s life that money comes perpetually, like living off a 3% return on $3 million, and you will have to decide if you want to sell your business. You can get a multiple between 2.5 – 4 on the seller’s discretionary cash flow. Internet businesses can even reach 5x multiples.

Your multiple will be the average of the four results sensitive to these 4 metrics:

  1. The longer you have operated the business and have solid financial records the higher your multiple.
  2. The more time and technical skills the owner uses to run the business will decrease your multiple.
  3. Increasing revenue and/or profit trends will increase your multiple, while 0 revenue growth will only command a 2.5 multiple.
  4. The more loyal your customer base the higher your multiple.

If you operated your business for 10+years, work 25 hours per week in your business, have a flat revenue, but a loyal customer base, you could be looking at a valuation of $1M based on an annual discretionary cash flow of $300,000.

The advantage of internet businesses is even more clear when it comes to selling your business. The smaller your city, the less likely it is you will get your worth when selling your business so the alternative would be just to keep it but reduce your income by 30-50% by outsourcing or hiring.

Money is only a mathematical measure of value, so the key is you should always focus on delivering that value, the money is a by-product. Focusing on making money will only ruin your long-term gains.

Sử dụng Facebook cho tiệm Salon của bạn

For our English blog post, click here

Người trung bình dành hơn một nửa cuộc sống thức dậy của họ trên các thiết bị điện tử. Bất kể salon của bạn tốt như thế nào, nếu khách hàng không thể tìm thấy doanh nghiệp của bạn trên điện thoại, bạn sẽ mất khách hàng! (Bạn cũng có thể sử dụng các bước sau để có được nhân viên mới.)

Step 1 Xác nhận Công ty của bạn trên Facebook bằng cách tìm kiếm công ty của bạn. Sau khi tìm kiếm trang được, hãy nhấp vào “is this your business” đã được tô màu đỏ trong hình ảnh sau và làm theo các bước mà nó được nhắc.

step 1 claim your page

Step 2 Khi bạn tuyên bố doanh nghiệp của mình, trong Cài đặt của trang công ty Facebook của bạn, đặt Đối tượng trên trang ưa thích của bạn Chọn nhóm tuổi tốt nhất cho Công ty của bạn. Nhắm mục tiêu các nhóm khách hàng của bạn.

2 audience

Step 3 Tạo một bài đăng để lãnh đạo chiến dịch của bạn – đối với công việc kinh doanh của bạn, bạn muốn làm một bảng cắt giảm giá hoặc một số tài liệu bán hàng / quảng cáo.

3 Boost post

Sử dụng Facebook có hiệu quả hơn việc xây dựng một trang web SEO.

Khuyến khích tương tác bằng cách chụp ảnh công việc của bạn và hashtag tên salon của bạn #______yeg và #edmontonnails hoặc #yegnails. Bạn cũng có thể khuyến khích nhiều sự tương tác hơn từ khách hàng bằng cách tạo một cuộc thi chẳng hạn như khách hàng hashtag tên tiệm #thutnailsyeg sẽ được nhập vào một cuộc xổ số hàng tháng mà người chiến thắng sẽ nhận được 10% cho dịch vụ tiếp theo.

Tiếp thu khách hàng là điều khó khăn nhất trong kinh doanh, khi bạn có khách hàng, bạn không chỉ có một lần bán hàng – trong kinh doanh móng tay, bạn đã thiết lập một chi phí định kỳ vì họ sẽ cần phải quay trở lại. Tôi có thêm lời khuyên cho tiệm nail ở đây: https://thutaccounting.wordpress.com/2017/05/19/choosing-your-market-pricing/

Trả lời Review trên Facebook

Điều rất quan trọng là phải trả lời các bài đánh giá (review) cho dù đó là tốt hay không tốt. Điều này cho khách hàng thấy rằng doanh nghiệp của bạn không phải kiếm tiền nhanh, nhưng bạn đánh giá khách hàng và mối quan hệ của họ. Điều này tạo niềm tin cho khách hàng hiện tại và cả khách hàng mới. (It is very important to respond to reviews whether it is good or not. This shows customers that your business is not in it for a quick cash-grab, but that you value your customers and their relationship. This creates trust for both existing and new customers.)

Dưới đây là một số ví dụ (Below are some examples):

Trả lời cho một khách hàng không hài lòng: (Bạn không nên sử dụng tên doanh nghiệp để nó không hiển thị trong kết quả tìm kiếm – You should not use the business name so it doesn’t show up in search results)

Thank-you for bringing that to our attention. Your feedback helps us grow and get better. So please take a a minute and let us know: 1- What we can do better to earn 5 stars, 2- What do you like best about the way we do business? 3- How does our salon compare with other nail salons you’ve visited? We’ll use your response to create a better experience for everyone.

My name is _____ and I am the Owner/Manager. I’m sorry to hear about your bad experience. Our new team would like to make this right with you. If you’d like to discuss this further, please private message me through here.

I’m sorry to hear about your bad experience. We’re normally known for our exceptional work and regret that we missed the mark. My name is ______ and I am the Owner/Manager. We would like the opportunity to fix this. If you’d like to discuss this further, please private message me through here.

I am truly sorry you had such a disappointing experience.  Our goal is just the opposite and we hope to exceed all expectations by going above and beyond with our facilities, services and of course; overall client experience.  Thank you for taking time to provide us with your feedback as we are constantly providing feedback to our teams as to how we can be better.

Trả lời cho một khách hàng hài lòng: (Bạn nên sử dụng tên doanh nghiệp để nó hiển thị trong kết quả tìm kiếm – You should use the business name so it does show up in search results)
Thanks for leaving a review and mentioning the tech’s name. You’re right, she is great! We hope to see you again soon at (@Tên của tiệm) , and bring a friend!

Thank you so much! We are pleased that you enjoyed your visit at (@Tên của tiệm). We hope to see you again soon.

Your review just made my day! Thank you so much for taking the time to share your experience at (@Tên của tiệm). It means a lot to us!

I was so happy to hear that (Tên của Tech) provided you with excellent service. I’ll be sure to share your feedback with her and the entire team at (@Tên của tiệm). We love knowing that our customers appreciate their work.

Cuối cùng, bạn không nên copy&paste các ví dụ này cho mỗi bài đánh giá vì mỗi câu trả lời phải chân thành! Finally, you shouldn’t copy & paste these examples for every single review because each reply should be sincere!

  • Share with someone that could use some advice in this post or save some taxes and EARN UP TO $583! For every customer you refer we’ll give you a free month or a gift card equal to 1 month of service of your referral – whatever is bigger! Anyone you refer gets a free month of bookkeeping!
  • The end-to-end solution at an unrivaled annual fixed price. There is more time, more inspiration and more money for the implementation of your business. Do not waste money and time with taxes and accounting.  At the cost of just 1% or less we reduce customer total costs by 15-25% (taxes + accounting).
  • SwissBooks provides complete accounting, bookkeeping, payroll and tax solutions for Canadian controlled private corporations throughout Canada in a wide variety of industries and leverages extensive expertise to deliver the best solutions to our customers.
  • The strategy was to enter Canada at the high end of the market: Edmonton’s oil and gas industry, where customers were prepared to pay a premium, and  SwissBooks used that money to develop cost efficient accounting solutions for other sectors.  In turn, that money was used to develop even more cost efficient accounting – driving down the market to higher unit volumes and lower prices with each successive category: Industry, Enterprise, Venture, Boutique, Micro-businesses and Holding Corporations.  Take advantage that Alberta’s oil and gas enterprises spent millions of dollars to pay for the development to let you outsource your accounting at an affordable cost.  
  • Send us your prior financials and we will prove to you how our value is unrivaled in Canada.

Choosing Your Market & Pricing

There are only two markets you need to know:

  1. The top 20% (controls 70% of Alberta’s wealth)
  2. Average women

Where is the average men? They simply don’t count in Alberta– their women control their money -so unless you are targetting the high-end market direct your efforts directly to women!

How do you pick your market?

A) If each transaction does not require a material amount of an individual’s time then you can enjoy the largest market- the average people. They come in, they order your soup, which is prepared in a large amount, they pay, they leave. Businesses that can enjoy the mass market: e-commerce and fast food.

Big money is made in this market, but few clients can tap into it because many of the times this involves producing junk- think Walmart, Starbucks, big Pharma. THUT 2.0 was the robo-accounting service we tried to deliver to everyone, but it failed. Unless it is online sales or mass production, the masses will slow you down.

B) If each transaction requires a material amount of an individual’s time then you are better off focusing on the top 20% of the population. This was our strategy to enter at the high end of the market: Edmonton’s oil and gas industry, where earners who were in the top 1-5% of the population were prepared to pay a premium, and we used that money to develop cost efficient robo-accounting solutions for other sectors. But we didn’t have enough of these lucrative clients to survive off of doing accounting for a few big CNC oilfield shops.

Sometimes you do what you have to do to get yours: 10 years ago on the time-money continuum we had no money but we had the youth and energy to each work 80 hours in a week.

  1. We did personal tax returns for $20 each no matter the complexity. People came for 10-15 minutes, paid us, and left.

  2. We exercised the same procedure for small businesses charging $2,000 for a nail salon.

As clients grew in complexity, the amount of time required also grew. Those average people simply dragged us down as we could not recover the time spent on each file. So as we progressed on the money-time continuum we dropped clients to reach equilibrium.  Simultaneously, we were still banking money from the 1%ers and using the money saved to drive down the market to higher unit volumes and lower prices with each successive category until we can economically service the span of the higher 1%-20% of the market.

Raising prices

High-end services (tech, constructions, salons) would be better off having the end goal of catering to the top 20% of income earners that control 70% of the wealth in Alberta. That will lead to more satisfaction and less headache in the long run.

Successful price increases help you acquire better customers who are more serious about enjoying your offering and less likely to churn. When we had lower prices, we had customers that changed accountants, looking for a better deal, never mind that it will cost them more in the long run in taxes and/or penalties. Our current fees dramatically improve the lifetime value of our customer which in turn boosts lifetime value to customer acquisition cost ratio. It has allowed us to have a more sustainable business model without having to spend years working 80 hours a week each. The success of our price increases lies in the transparency. Everything is listed on our website and customers know exactly how much it costs and what is included. We know most accountants charge more than us, but our goal unlike theirs is not revenue maximization. Our goal is sustainability, and that involves selling something that our customers need.

  • $2M revenue and $200K profit is worse than
  • $1M revenue and $400k profit

When we include more features, like including bookkeeping, this drives the demand for our offering over other accountants and creates an opportunity to extract the added value in the form of higher prices. 

Signs you are ready to transition to cater to the higher end market

  1. Customers and prospects tell you how cheap you are. For example, customers have told us they are surprised we make money and that they appreciate the value.

  2. You create a very high ROI. You should aim to capture 10-20% of your economic value. If your construction build will save $100K over PCL’s you deserve that extra $10-$20K (your customer still saves $80-$90K). At the cost of 1%, we reduce customer costs by 15-25% (taxes + accounting).

  3. Many companies use a 5% annual price escalator so 2 years without raising prices would mean you fell 10% behind your competition.

  4. You included new value without monetizing them. Customers are more open to price increases when you can show a track record of using that extra money to invest in improving your offering. For example, we started doing everyone’s personal taxes at no additional cost, and unlimited CRA correspondence/audit support for free to create goodwill with customers. We continually go to businesses who get audited.


  1. Offer customers a discount for them to refer a family or friend. We give our customers one month free off their service plus one month free for anyone they refer. While many customers were quick to refer someone, many simply paid the higher price. So we raised the average price without driving away customers who might otherwise seek out a “cheaper” alternative. The effort involved with making a referral makes deal-prone customers feel like smart customers- and smart customers are happy customers.

  2. Give them alternatives. We used to only offer 2 categories. Now we offer 5 categories. We convince salon owners to downsize staff and do more work themselves so that they retain more of their income, while their lower revenue keeps them in a lower price category for accounting. Likewise, customers who are already financially independent and look to their business as more of a passive income want to pay us for a more expensive category as a consequence of maximizing their volume.

  3. Make your offerings look more valuable. A nail salon could put a bunch of nail-care and beauty products in a pretty box and sell it at a premium. The idea is to get customers to compare the price to a day at your salon- so in comparison, the package is a good deal. Because most people are illogical and lazy, they will return to your salon just as often, and they got no additional value from the package but you have increased your income. Likewise, fast food may package a number of foods together, encouraging customers to compare the price to dinner at their restaurant thus raising the perceived value of the packaged treat. Nail techs/fast food staff and tradesmen should all wear uniforms: scrubs or coveralls. Contractors should have vinyl decals on their van/truck.

  4. Make peace that you won’t convince 100%. We can help you with the math on a price increase so we can determine how many customers you will lose and still break-even. Keep in mind that some of those lost customers eventually come back once they try an alternative and realize the grass wasn’t greener on the other side.

Hiring out work

Unless you are financially independent, you should be working rather than hiring out the work. No one will ever do a better job than you, and no one will ever care about your big picture as well as you.

Only farm out things that can be completed more efficiently through unique skills and economies of scale (Accounting, bookkeeping vs. doing it yourself). Due to minimum efficient scale, the cost/technology would not make sense for an individual to specialize in something that is not directly related to their ability to generate revenue.

Fast Food Specific Advice

  1. Choose fast-casual rather than higher-end dining. Eating out was one of the first things to get cut back in many Albertan households when the oil price crashed. Among clients, sales on average rose 4%. But there is a sector where sales rose 9% last year. It is the sector above fast food, but a step down from fine dining: that middle, ground fast-casual restaurants. As the population gets older, and as the economy remains uncertain this trend will continue to favor fast-casual rather than more costly dining.

  2. The average food cost in restaurants is 30%. Fast food places operate at 25% and the finer the dining the higher the % up to a maximum of 35%.

  3. If one item in your meal is priced at 40% food cost, then the second item needs to be at 20% to maintain your 30% average. Mix low priced rice/noodles with high priced meat.

  4. The staff should ask if customers are interested in any appetizers, side dishes, and deserts. The simpler the preparation the higher the profit.

  5. Consider paying your servers on commission. Any increased wages you pay out to them should mean more profit to you.

  6. Descriptive words on the menu are better than pictures.

  7. Customers find fast food on their phone. Make sure you have a solid digital footprint: Facebook, Google, Instagram, Yelp. Your consumer base will return on average 1.7 times per month for 2.7 years, for repeat sales.  Accordingly, you should value your customers based on their lifetime value 1.7 times per month for 2.7 years.