Brad Johnson increased a company's profit margin from 20% to 37% in 18 months by switching from a fixed salary to a percentage of monthly profits. He doubled his income while the owner made hundreds of thousands extra annually and boosted the firm's enterprise value. When the owner sold the business, Brad's bid for equity was rejected.
we started at 20% margin. I had a goal of 35. I knew how to get there. I was on my way and proving the model as I went and had a roadmap to get to where I wanted to be. And so I was like, I know how to make a lot more money. I can tell Dave to stop giving me a salary and instead say, Dave, I want X percent of monthly profitability because I know that in a year and a half, I'm going to double my income. And that is exactly what happened. I doubled my income in a year and a half. And who's the big winner? It's not me, it's Dave. Like, yeah, I, when you take a company that by the end of it had over $1 million in EBITDA and you go from 20% to 37%, reverse engineer the math. Somebody made hundreds of thousands of dollars more a year and it was him. And that's not even accounting for the enterprise value that was added. No, no. By you raising the profit margin. Yeah. Again, that's why when it came time for him to sell the company, I was like, Dave, can you gimme like, yeah, a few million dollars? Here's my math. And he was like, no. I was like, well, I tried.
