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How I Bootstrapped to $5m using profit sharing and open salaries to motivate the team

... plus the Profit Sharing Matrix I use to do it

Bridget Harris · YouCanBookMe

Published September 1, 2022
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About this resource

Bridget Harris shares how they launched their profit sharing plan at their $3m ARR SaaS company.

In 20 minutes, you'll learn:

- Free excel file to model profit sharing across 10 employees

- 8 page document I used to explain profit program to team

- How profit sharing helped our company become more profitable

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What you’ll learn

Bridget Harris explains YouCanBookMe’s bootstrap approach to profitability, hiring for long-term growth, salary transparency, and a profit-sharing plan for the team.

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Key moments

Find the ideas you need and go straight to the source.

YouCanBookMe bootstrap context

“please help me welcome bridget harris with you can book me to the stage bridgette so my name is bridget harris i run a company called you can book me and as he said i'm here to talk about with my fellow bootstrap founders how we have grown to around 5 million arr using profit sharing and open salaries to motivate the team so you can put with our online scheduling tool um we've got over just a million accounts where where am i looking here there we go million accounts we've got about 22 000 customers and to”
Watch at 00:00

Building a business plan

“didn't realize that they were working for a bet rather than a business plan so good news we're all here nathan's here the whole team is understanding to align against something slightly different even the vcs have woken up to the fact that they have to reinvent some really slightly crazy mathematics which is adding together your profit uh margin with your growth rate and if you come up with more than 40 then you they'll still give you some kind of valuation so okay fine we'll accept that but i have a different way of thinking about it which”
Watch at 03:52

Hiring for profitable growth

“you're going to give them some career paths and promote them and so on and so forth and at the end of the day you've got a profit margin there which what i would call is essentially their ability to impact your uh your growth so who you hire will have a direct impact on that so here it is uh the profit stack of your classic p l or income statement what you're doing in terms of people and team and then how you're actually going to build a product together to make some money so in terms of metrics people metrics”
Watch at 07:46

Using profit metrics

“incredible some incredible ratios coming out of public publicly listed companies in america but 201 times is is essentially the average you can book me 4.3 and i'm going to come on to that it's not because we're massively socialist or weird it's because it's actually a very good uh logic to why we keep our wage ratio low and then costs of living in different regions number indexes tells you where how much it costs to live anywhere and we basically split it into four pay regions inside you can book me anybody recognize this place”
Watch at 11:39

Profit-sharing eligibility and calculation

“detail but basically our logic is you've got to be employed you can't be on a disciplinary and you have to have worked for us for at least a year and a half we then look at our net profit excluding any um you know out sort of extraordinary costs like foreign exchange currency stuff happens a lot and um i know it's like one-off donations or something but otherwise we just take a quarterly three-month p l and we take 10 of our profit and we redistribute it and then what we do is we do reward 10 years so you get a higher percentage of”
Watch at 15:28

YouCanBookMe in numbers

“How I Bootstrapped to $5m using profit sharing and open salaries to motivate the team Profit Sharing Matrix Bridget Harris CEO of YCBM • ycbm.com”
Read slide 1

The profit stack

“The Profit Stack 1 1 — The Profit Stack”
Read slide 22

People metrics for profitability

“People metrics Maximise opportunity for high performers to hit their stride Track Tenure, Turnover and ARR per employee Long term profitability will come from exceeding these benchmarks”
Read slide 29

Transparent salary metrics

“Salary metrics A labour market works the same as any other market — supply and demand We publish our salary rates internally to stay accountable Reward performance with high wages, it doesn’t follow in reverse”
Read slide 31

Profit-sharing scheme mechanics

“The Scheme Eligibility 1.5 years employed Must work over 30 hours a week Any disciplinary actions disqualifies for relevant quarter Calculation 10% of net profit made in a year Includes all normal operating expenses and income Excludes FX and abnormal payments Payouts Based on eligibility points from 1.5 - 4 Paid quarterly in arrears Paid as part of normal pay checks”
Read slide 44

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Resource files

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  • How to set up profit sharing

  • How I Bootstrapped to $5m using profit sharing and open salaries to motivate the team - Slide Deck

About the speaker
Bridget Harris

Bridget Harris

CEO & CoFounder · YouCanBookMe

LinkedInTwitter

Bridget Harris is the CEO and co-founder of YouCanBook.me - an online scheduling tool that helps businesses manage their customers and calendars. Bridget is the co-founder of YCBM, launched in 2012. Before then she had a career in parliament, government and politics as an advisor.

Company revenue
$5M
Team size
24

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Slide text

Find a passage in the slides and open the original deck.

48 passages

YouCanBookMe in numbers

  1. Slide 1Open deck

    How I Bootstrapped to $5m using profit sharing and open salaries to motivate the team Profit Sharing Matrix Bridget Harris CEO of YCBM • ycbm.com

  2. Slide 2Open deck

    YCBM in numbers 1 million Accounts 22,000 Customers 82 million Bookings all time

  3. Slide 3Open deck

    Trusted by customers and teams worldwide at

  4. Slide 4Open deck

    Revenue 2011-2022 (£) ✨2016 — 2017 First profit £105,791

  5. Slide 5Open deck

    Over the next 20 minutes I’m going to show you 3 — Sharing the Profit 2 — Metrics that matter 1 — The Profit Stack

  6. Slide 6Open deck

    A short history of Profit $ History of Profit

  7. Slide 7Open deck

    Business profit is not how Investors intend to get a return on their investment. 📢 Attention Founders!

  8. Slide 8Open deck

    Invent something. Make Money 📢 Attention Founders! Founder Business Plan 💰 VC Business Plan 💰 Invest in Stock and Trade. Make Money

  9. Slide 9Open deck

    Invent something. Make Money 📢 Attention Founders! Founder Business Plan 💰 VC Business Plan 💰 Invest in Stock and Trade. Make Money

  10. Slide 10Open deck

    “If you want to be a fast-growing SaaS company trying to Go Big”

  11. Slide 11Open deck

    EBITDA of 21 Public SaaS Companies since 2018

  12. Slide 12Open deck

    VCs expect to lose money

  13. Slide 15Open deck

    Source: https://layoffs.fyi/ Cumulative startup layoffs since COVID-19

  14. Slide 17Open deck

    The “40% rule” includes an element of EBITDA as part of valuations

  15. Slide 18Open deck

    Image by …

  16. Slide 20Open deck

    We broke even in 2016 YCBM Operating Profit ✨2017 — 2018 First profit share payout of $75k to 5 eligible team members

The profit stack

  1. Slide 22Open deck

    The Profit Stack 1 1 — The Profit Stack

  2. Slide 23Open deck

    The Profit Stack Company Stack Business Stack People Stack

  3. Slide 24Open deck

    The Company Stack <10% 10 - 15% 20 - 40% 10% 20 - 30% You decide on your costs 💰

  4. Slide 25Open deck

    The Business Stack Product Led Growth will lead to long term profitability

  5. Slide 26Open deck

    The People Stack Attract High Performing Problem SolversTM Who you hire will have a direct impact on the profits your business will generate

  6. Slide 27Open deck

    The Profit Stack Company Stack Business Stack People Stack

  7. Slide 28Open deck

    Metrics that Matter 2 2 — Metrics that matter

People metrics for profitability

  1. Slide 29Open deck

    People metrics Maximise opportunity for high performers to hit their stride Track Tenure, Turnover and ARR per employee Long term profitability will come from exceeding these benchmarks

  2. Slide 30Open deck

    People metrics What we track to ensure long term profitability of our business Metric Saas Benchmarks 2 years YCBM 9.2% $125K 3.3 years 3.6% $200K Tenure Turnover ARR per Employee

Transparent salary metrics

  1. Slide 31Open deck

    Salary metrics A labour market works the same as any other market — supply and demand We publish our salary rates internally to stay accountable Reward performance with high wages, it doesn’t follow in reverse

  2. Slide 32Open deck

    Salary metrics A labour market works the same as any other market — supply and demand We publish our salary rates internally to stay accountable Reward performance with high wages, it doesn’t follow in reverse

  3. Slide 33Open deck

    Salary metrics What we track to ensure long term profitability of our business Metric Benchmarks YCBM Glassdoor Data X 201.6 Numbeo Index Up to double market rates X 4.3 4 Regions Market Rates Pay ratios Cost of Living

  4. Slide 34Open deck

    Who thinks it is good economics — in a global labour market — to fix salaries to the most expensive place to live in the world? Photo by Kyler Boone

  5. Slide 35Open deck

    Cost of Living matters R1 R2 R3 R4 Cost of Living Plus Rent Index is an estimation of consumer goods prices including rent comparing to New York City.

  6. Slide 36Open deck

    Not all salaries are equal Country taxes vary widely Benefits and job security inherent in European contracts are ‘priced in’ to higher salaries in USA *Mandatory Employer Social Costs Cost of Employment matters

  7. Slide 37Open deck

    Employee take-home matters *Effective Tax Rate when earning $100K in different countries

  8. Slide 38Open deck

    US tech giants skew the labour market for talent YCBM / Glassdoor comparable sample across senior Engineering, Product and Customer team roles

  9. Slide 39Open deck

    Employee Gross 331% spread Pay Ratio

  10. Slide 40Open deck

    Total cost Employer 324% spread Pay Ratio

  11. Slide 41Open deck

    Take home 250% spread Pay Ratio

  12. Slide 42Open deck

    Take home 250% spread Employee Gross 331% spread Total cost Employer 324% spread Pay Ratio

  13. Slide 43Open deck

    Sharing the Profit 3 3 — Sharing the Profit

Profit-sharing scheme mechanics

  1. Slide 44Open deck

    The Scheme Eligibility 1.5 years employed Must work over 30 hours a week Any disciplinary actions disqualifies for relevant quarter Calculation 10% of net profit made in a year Includes all normal operating expenses and income Excludes FX and abnormal payments Payouts Based on eligibility points from 1.5 - 4 Paid quarterly in arrears Paid as part of normal pay checks

  2. Slide 45Open deck

    The Scheme Employee builds up 0.25 points each quarter 👉🏻 After a year and a half, they have 1.5 points 👉🏻 By end of 6th quarter they are eligible for a payout 💰 Each quarter, their share from the pot goes up by 0.25 points 💰 💰 After 4 years, (4.0 full points) they fully vest their share 💰 💰 💰 👉🏻

  3. Slide 46Open deck

    Employee #1 #2 #3 #4 #5 #6 #7 Vested points 4 4 4 3.75 1.5 1.5 1.5 % Share 19.75% 19.75% 19.75% 18.52% 7.41% 7.41% 7.41% PAYOUT $4,938.27 $4,938.27 $4,938.27 $4,629.63 $1,851.85 $1,851.85 $1,851.85 How it’s calculated Employee points / Total vested points = % Employee Share Total profit $25,000 per quarter 21 Points in Total / converted into % Each employee receives a % share of quarterly pot Example $250,000 x 10% = $25,000

  4. Slide 47Open deck

    Our Profit Sharing Plan Example spreadsheet that will be shared with everyone

  5. Slide 50Open deck

    What Business are you in? ? Your Business

  6. Slide 51Open deck

    Youcanbookme Ltd Abridged Profit and Loss account for the year ended 31st March 2017 Total 31st March 2017 (£) Total 31st March 2016 (£) Gross profit 977,760 499,625 Administrative expenses (872,595) (564,605) Income from shares in group undertakings 8,664 - Other interest receivable and other income - 20 Interest payable and similar expenses (10,186) (13,941) Profit (loss) before tax 103,643 (78,901) Taxation 2,148 50,280 Profit (loss) for financial year 105,791 (28,621)

  7. Slide 52Open deck

    Youcanbookme Ltd Abridged Profit and Loss account for the year ended 31st March 2017 Total 31st March 2017 (£) Total 31st March 2016 (£) Gross profit 977,760 499,625 Administrative expenses (872,595) (564,605) Income from shares in group undertakings 8,664 - Other interest receivable and other income - 20 Interest payable and similar expenses (10,186) (13,941) Profit (loss) before tax 103,643 (78,901) Taxation 2,148 50,280 Profit (loss) for financial year 105,791 (28,621) Not in business

  8. Slide 53Open deck

    Youcanbookme Ltd Abridged Profit and Loss account for the year ended 31st March 2017 Total 31st March 2017 (£) Total 31st March 2016 (£) Gross profit 977,760 499,625 Administrative expenses (872,595) (564,605) Income from shares in group undertakings 8,664 - Other interest receivable and other income - 20 Interest payable and similar expenses (10,186) (13,941) Profit (loss) before tax 103,643 (78,901) Taxation 2,148 50,280 Profit (loss) for financial year 105,791 (28,621) We’re in business! 🙌

  9. Slide 54Open deck

    In the last 20 minutes I just showed you Profit Share Our profit share matrix and how it pays out How to build a profit mentality into how you design and sell your product Profit Stack What metrics will inform your hiring Digging deep into our salary strategy Metrics

  10. Slide 55Open deck

    Thank you! Bridget Harris CEO of YCBM • ycbm.com