Like most people, I had no idea what to charge for my service.
So I went to the local record store in Woodstock, where they had some local
musicians' CDs on the counter.
She said, “You set the sel ing price at whatever you want. We keep a flat $4 cut.
price at whatever you want. We keep a flat $4 cut. And we pay you every week.”
I figured if it worked for her, it was fine for me.
Because it was taking me about forty-five minutes of work to add a new album
to the site, I also had to charge $25 per album as compensation for my time.
(Shows you how much I thought my time was worth in those days.) A few days
later, I realized that $35 feels about the same as $25, so I bumped it up to $35 per
album, which left me room to give discounts and stil make a profit.
And that's it! Six years and $10 mil ion later, those same two numbers were the
sole source of income for the company: a $35 setup fee per album and a $4 cut
per CD sold.
A business plan should never take more than a few hours of work. Hopeful y no
more than a few minutes. The best plans start simple. A quick glance and
common sense should tel you if the numbers wil work. The rest are details.
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