Case Study 36.1: Forty-One Thousand Dollars and No Idea Where It Went
📜 Tier 3 — Illustrative. Bettina Ó Ruairc, her business, and every figure here are constructed. The tax treatment is US-shaped and illustrative. The pattern is extremely common; the numbers are the author's.
Year two, as she understood it
Bettina Ó Ruairc left a hotel events role at thirty-one and started planning weddings.
Year two: fourteen events, $41,000 of revenue, and a feeling that she had worked harder than anybody she knew for less money than she had earned at the hotel.
She could not say where it had gone. She had one bank account, no bookkeeping beyond a shoebox, and an accountant she met once a year in April.
Year two, reconstructed
It took an afternoon with a spreadsheet and her bank statements.
💰 Run the Numbers: where $41,000 went
Revenue $41,000 Insurance −1,260 Software — six subscriptions, two unused −1,940 Website, hosting, domain −760 Marketing — two wedding-fair stands and a directory listing −4,100 Phone, internet share −720 Payment processing — 2.9% on everything, including pass-through −1,190 Equipment, kit, printing −880 Unbilled mileage and travel −2,240 Accountant −540 Subcontracted assistants — 14 events, one assistant each −4,200 Professional membership and two courses −950 TOTAL COSTS −$18,780 PROFIT $22,220 Self-employment tax — illustrative −$3,140 TAKE-HOME $19,080 Fourteen weddings. Nineteen thousand dollars.
Her hotel salary had been $46,000 with health cover and paid leave.
The four things the reconstruction found
🚨 1. The billable ratio was 38%
She tracked a month, retrospectively, from her calendar and email.
1,840 hours worked. About 700 billable.
And the biggest single non-billable block was not marketing. It was 187 hours of consultations, proposals, and follow-ups with people who did not book — thirty-one enquiries, fourteen bookings, a 45% conversion, and every one of the seventeen no's cost her about six hours.
🚨 2. The marketing spend produced two bookings
$4,100 on two wedding-fair stands and a directory listing.
Two bookings, worth $5,400.
Meanwhile: eight of the fourteen came from three venue coordinators, and two from a photographer — ten of fourteen from five relationships that had cost her nothing.
§36.7a's ranking, demonstrated, at a cost of $4,100 to find out.
🚨 3. Five of the fourteen were coordination at $1,450
$7,250 of revenue — 18% — from 36% of the clients.
And each of those five consumed the same enquiry, proposal, contract, onboarding, invoicing, and debrief as a $4,800 full planning.
§36.8a's threshold: her billable ratio was a function of how many clients she had.
🚨 4. Two events went catastrophically over scope
A "partial planning" engagement at $2,600 in which she ended up doing everything, because the boundary had never been written down.
Her estimate afterwards: 140 hours against a scoped 70.
At her required rate, that single event lost her about $4,800 of capacity.
What she changed
⚡ Five changes, over about six weeks
1. Computed the number §36.1. Required rate: $71.40. She had been achieving $58.57 2. Repriced Full planning $4,800 → $7,200. Partial $2,600 → $4,400. Coordination $1,450 → $2,600 3. Stopped doing wedding fairs −$4,100, redirected to nothing. She spent the time on venues instead 4. Wrote the scope document Ch.2's service levels with explicit exclusions and $85/hr for out-of-scope work 5. A paid consultation $150 for the initial meeting, credited against the fee if they book Change 5 is the one she expected to fail and it is the one that changed the most.
💰 Run the Numbers: year three
Year 2 Year 3 Enquiries 31 26 Paid consultations taken — 17 Bookings 14 11 Conversion, enquiry → booking 45% 42% Conversion, consultation → booking — 65% Revenue 41,000 $58,300 Costs 18,780 $15,900 Profit 22,220 $42,400 Take-home after SE tax $19,080** | **$36,400 Hours worked 1,840 1,610 Billable ratio 38% 54% Three fewer events. Two hundred and thirty fewer hours. Seventeen thousand more dollars.
🎤 From the Field
Bettina, afterwards:
"The hundred and fifty dollar consultation fee is the thing I fought hardest against and it did two things I did not expect."
"It stopped fourteen people from booking a meeting who were never going to hire anybody. That's about eighty-four hours."
"And the ones who did pay turned up differently. They'd brought their budget, they'd talked to each other beforehand, and they treated the hour as something they'd bought."
"I thought I was charging for my time. I was actually filtering for seriousness, and I'd have paid for that."
Discussion Questions
DQ1. Bettina made $41,000 and took home $19,080 and could not say why. What specifically prevented her from knowing?
Consider
**One bank account, no bookkeeping, and an annual conversation with an accountant in April.** **Each is separately survivable and together they make the business invisible.** **The single account means personal and business money are indistinguishable in real time.** No bookkeeping means the categories do not exist until somebody creates them retrospectively. **And an April accountant produces a tax return, which is a compliance document and not a management report** — it tells you what you owe, not where the money went. **What she actually needed was §36.3's items 2 and 5 — the separate account and monthly reconciliation** — **which cost about $30 a month and four hours a year.** **And note that the reconstruction took an afternoon.** **The information existed the whole time.** **What did not exist was any occasion on which anybody looked at it**, which is Chapter 30's finding-log problem in a different domain: an instrument that is never opened is not an instrument.DQ2. She spent $4,100 on marketing that produced two bookings, while ten of fourteen came from five free relationships. Why is this so common?
Consider
**Because marketing spend is a thing you can *do*, on a Tuesday, and relationships are not.** **A wedding fair is bounded, purchasable, and feels like business development.** **Building a relationship with a venue coordinator is diffuse, slow, and looks like nothing** — you are simply doing your job well and sending photographs. **Which is Chapter 27's napkin fold, in a marketing budget:** **the satisfying, visible, completable action displacing the unsatisfying one that works.** **And there is a second mechanism worth naming.** **A new planner has no relationships to leverage and therefore no alternative to spending money** — so the fair is not irrational in month one. **What is irrational is repeating it in year two, after ten of fourteen bookings arrived from somewhere else**, and the reason it gets repeated is that nobody counted. **The general rule: attribute every booking to its source, in one column, from client one.** **It costs nothing and it is the only thing that makes this visible.**DQ3. The consultation fee filtered fourteen people out. Is that a good outcome or did she lose fourteen potential clients?
Consider
**Overwhelmingly good, and the numbers say so precisely.** **Enquiry-to-booking conversion barely moved — 45% to 42%** — which means the fee removed almost nobody who was going to book. **What it removed was 84 hours of meetings with people who were not.** **And the second effect is larger and harder to measure.** **Consultation-to-booking went to 65%**, and Bettina's account of why is credible: **people who paid arrived having done preparation, and treated the hour as something they had bought.** **The honest counter-argument:** a fee is a barrier, and barriers are not neutral. **It will disproportionately deter people with less money** — which is a real cost, and it means the fee also functions as a filter for something other than seriousness. **Crediting it against the fee, as she did, softens that considerably and does not eliminate it.** **A planner should choose this knowingly rather than treating it as a pure efficiency gain.**DQ4. Year three had three fewer events and $17,000 more take-home. What is the general form?
Consider
**That in a business whose costs scale with client count, growth in event volume can reduce income.** **Bettina's year-three business is smaller in every unit except money.** **Fewer enquiries, fewer bookings, fewer hours** — and a billable ratio that rose from 38% to 54% almost entirely because there were fewer clients generating fixed overhead and fewer unpaid consultations. **§36.8a stated it as arithmetic; this is the arithmetic happening to somebody.** **And the uncomfortable corollary, which the chapter should say plainly: for most solo planners the path to a viable income is fewer, better-paid engagements, and that path runs through turning work down.** **Which is extremely hard to do in year two, when every enquiry feels like the last one.** **Bettina could do it because she had computed the number.** **The number is what makes a refusal feel like a decision rather than a loss.**DQ5. The 140-hour "partial planning" at $2,600 lost about $4,800 of capacity. Whose fault, and what exactly prevents it?