Set the Owner Target Number

Outcome: Convert owner goals into a practical target for income, cash, time, and risk. The output is the number every growth decision must serve.

What to do in this lesson

Watch: start with the lesson video.
Learn: use the summary and key points to capture the operating principle.
Do: complete the action steps against one real product, SKU, campaign, supplier, or workflow.
Submit: write one action card with owner, evidence, next step, risk, status, and review date.

Watch

Hosted on Google Drive.

Lesson summary

This lesson teaches how to use the ‘Freedom Number Calculator’ tool to determine the monthly income and sales goals needed to achieve financial freedom. The tool calculates the target revenue, gross profit, and number of units that need to be sold per day across a set of products to reach the desired monthly income target.

The key is to ensure your Amazon business has a net profit margin between 15-25%, and to allocate 50-75% of that profit as the owner’s compensation while retaining the rest to reinvest in the business.

Key points

Use the ‘Freedom Number Calculator’ tool to determine monthly income and sales goals for financial freedom
Aim for a 15-25% net profit margin in your Amazon business
Allocate 50-75% of profits as owner’s compensation, retain the rest to reinvest in the business
Sell 9 units per day of 5 products priced at $29.95 to reach $40,000 monthly target revenue
Alternatively, sell 13 units per day of 2 products priced at $50, or 25 units per day of products priced at $17.95

Action steps

Calculate your Freedom Number
- The monthly revenue you need to hit your target
- How many products you can do that with
Save this in the Tools - your leader may use this during Strategy calls
Share a screenshot with your peers inside your Group Feed

Action checklist

Use the ‘Freedom Number Calculator’ tool to determine your personal financial freedom target
Ensure your Amazon business has a net profit margin between 15-25%
Allocate 50-75% of profits as owner’s compensation, retain the rest to reinvest in the business
Determine the product pricing and daily sales volume needed to reach your financial freedom target

Full transcript

Open transcript

We’re going to show you this tool that we created that makes it so easy you’re going to know your freedom number inside of just two minutes. Let me show you that tool now. And here is the tool, the freedom calculator, all right, I’m excited. So to get to this thing, every single person has this, if you come into the Scaler-OS tools, look on the left-hand side and you can see that we have all these different things here. Come down to Toolbox, right, so inside Toolbox is the freedom number. So we’ll add and click on that and I’ll bring you to the screen here. Now this is the amazing part. We’ve done all the math for you. You don’t have to think really at all for this one. So that we just want you to add in the numbers for your life, okay, so I’m going to go ahead and fill this out. I’m just going to put in stuff that pretty typical American might have here, all right, and then now we can see here that our monthly expenses are about $6,000. You know what, we’re just going to bump that up to make it $6,000 and make it easy. There we go. So our freedom number is $6,000, okay, that’s how much we have to create to be able to live a freedom lifestyle. Now a typical Amazon business should have between 15 and 25% net profit, okay, and so we have these different numbers here. 30% is pretty aggressive, 20% is kind of average and 10% is pretty conservative. If you’re less than 10%, you need to fix it. That’s the rest of the financial slide to get a better idea of how to fix that. But owner’s comp, so we do want to keep like retained earnings inside of our business so that we can grow it and change new things and add new things. And so this owner’s comp, we can put at 50%, even 75% is pretty good. So if we, you know, that’s, that would be leaving 25% of your profit in the business and taking home 75%. Okay. So at that number, that means we need to create $6,000 a month in income. We need to have $8,000 in gross profit. And that means our target revenue at 20% profits, $40,000 a month. That’s it. We just have to get to $40,000. That means if you’re in group two in Scaler-OS, you can have this kind of income already. So now here’s the crazy part. How many blocks do we need to do to get there? We just say we have five products. And our average selling point is, let’s say it’s 29, 95, right? All we need for five products, we need to have five products selling nine units a day. That’s it. That’s all we need. If we can do that, we can achieve our freedom number. How cool is that? So you can play with this and kind of see what kind of fun stuff we can do. Maybe I only want two products. I’m going to focus on two different things. And let’s say I’m going for a higher price point, $50. We only have to sell 13 units a day, at least $50 a lot of products, if we have two of them, right? Maybe we just have, maybe we’re going to go a little bit lower. And we’re going to have $17.95 and we’re going to have $3,000, kind of a good number for a nice little brand, right? You guys get some diversity in your products. You just have to sell 25 units a day of these products to get your dream life freedom number. Now, that’s the easy one. Now, if you want to get a little more advanced, click this advanced mode. It’ll show you each product. You can kind of see where I’m at. So let’s say I have, let’s say I have kind of a diverse line of products and I’m doing at $24.95 and maybe you have a kind of a big expensive version at, let’s say, $39.95. Okay. At that point, we just have to sell about 30 of these cheaper ones, 20 of these no price ones and about 10 of these higher price ones. That’s it. If we can achieve that, we can achieve those three products. We will now have our freedom number, how that dream life number, how cool is that?

Resources

Source lesson: Calculating Your Freedom Number
Resources: none attached yet.

Track: 01 — Seller Operating Baseline
Module: Control Tower Setup