TAP Lookup
Look up the recommended Target Allocation Percentages (TAPs) for a business based on their Real Revenue level.
Usage
Provide the annual Real Revenue amount and receive the recommended TAPs.
Input Required
- •Real Revenue: Annual revenue minus materials and subcontractors (if applicable)
If the user provides Total Revenue and has significant materials/subcontractors (>25%), remind them to calculate Real Revenue first using the real-revenue-calculator skill.
TAP Table
| Real Revenue | Profit | Owner's Pay | Tax | OpEx |
|---|---|---|---|---|
| $0 - $250,000 | 5% | 50% | 15% | 30% |
| $250,001 - $500,000 | 10% | 35% | 15% | 40% |
| $500,001 - $1,000,000 | 15% | 20% | 15% | 50% |
| $1,000,001 - $5,000,000 | 10% | 10% | 15% | 65% |
| $5,000,001 - $10,000,000 | 15% | 5% | 15% | 65% |
| $10,000,001 - $50,000,000 | 20% | 0% | 15% | 65% |
Response Format
When providing TAPs, format as:
code
## Recommended TAPs for [Revenue Tier] Based on Real Revenue of $X, your Target Allocation Percentages are: | Account | TAP | |---------|-----| | Profit | X% | | Owner's Pay | X% | | Tax | X% | | Operating Expenses | X% | | **Total** | **100%** | ### Key Notes for This Tier [Include relevant notes based on tier]
Tier-Specific Notes
$0-$250K:
- •Owner's Pay is highest (50%) because you ARE the business
- •Profit starts at 5% - small but builds the habit
- •OpEx is constrained (30%) to force discipline early
$250K-$500K:
- •Profit doubles to 10% as business stabilizes
- •Owner's Pay decreases as business can afford more help
- •OpEx increases to 40% for growth infrastructure
$500K-$1M:
- •Profit at 15% - business is truly profitable
- •Owner's Pay at 20% - may be taking salary + distributions
- •OpEx at 50% - significant team and infrastructure
$1M-$5M:
- •Profit drops to 10% temporarily for scale investment
- •Owner's Pay at 10% - mostly distributions now
- •OpEx at 65% - significant operational complexity
$5M-$10M:
- •Profit back to 15%
- •Owner's Pay at 5% - minimal salary, mostly profit distributions
- •OpEx steady at 65%
$10M-$50M:
- •Profit at 20% - highly profitable at scale
- •Owner's Pay at 0% - all compensation through distributions
- •OpEx at 65%
Important Reminders
- •These are TARGETS, not starting points - Use the 3% rule to gradually move toward TAPs
- •Industry variations exist - Some industries have different recommended TAPs
- •Tax may vary - 15% is standard but consult a CPA for your situation
- •Real Revenue matters - Product businesses must use Real Revenue, not Total Revenue
Attribution
TAPs are from the Profit First methodology by Mike Michalowicz. For the complete methodology, see "Profit First" at profitfirstbook.com.