Episode 3: 5 Ways of Increasing Business Profits
We. Look at business through, six, very primary steps, and, it's. A very structured methodology and we, work through that every single business to. Get the business word can work without the owner that's, what we know we have true businesses when it can work without the owner and. When. You look at a car as an example. Cars. Whether. $35,000. Carter's $100,000. Cars depending, on where. The, cars coming from, it's. Built in same chassis. Discussion, becomes what's going to be our. Business. Is no different and so. We look at the business, chassis. And how. To look. At it through these six steps in this mastering, niche which is what we're gonna talk about today. Leverage. Team. Synergy. And results you. Look for these six steps as I get you a business they can work without me. Okay. So, that's. The ultimate goal right. But. You need to take all these steps that we're about to discuss together. Okay, so. It's always as with, almost anything that's worthwhile to step-by-step progress, from process. And. Something, that we talked about yesterday. About. Incremental change it's not about making. This huge transformation transformation. Overnight, and expecting. You know. It's. Not that's, not. You. Can, profit. Grow. My. Favorite. Seminars. I've seen. So. Without further ado let's. Get into it and then uh. Michael. Mentioned. This, is what we're gonna walk you today is in the niche area of your business and it's the second, step really, of how, to build a business network without you, most. Businesses. When they look at marketing the, marketing of your business, it's an expensive it's, classified, as an expensive and for most businesses it is the. Most businesses they're not testing, measuring to understand, three, critical areas of the market what's. Your cost elite what's. Your cost, per acquisition and. What's your lifetime value of a, customer or. Client or guest depending on your, business and goodbye. So, once we know those three things what we actually do is we can understand how to transition, marketing, from an, expense, into. An investment food when. Somebody, puts money into an investment why, they call an investment food they call it that because they, know when they get the return it's gonna be higher than what they would marketing. Should be no different every. Dollar put into marketing community more dollars better and. Now. In. Tandem with that we. Look at what we call the Bible incision what we're gonna discuss, today. Oh cool. So with that marketing real quick I wanna get into that I love the idea that it's. A perspective thing. What, I write when I write off expenses, I write him off because they're gone I don't, expect to see them again, my. Xbox one is an expense, it's not an investment right so well, maybe I was trying to be frozen for, a minute but but. I really like that perspective, Daymond is there anything you know in terms of our, business services as far as digital marketing goes you.
Say, Anything about what we can help provide the small business owners when. It comes to having an investment. In marketing versus, just. Sitting there throwing money away to, get something out you, know I'm, on the business they, would. Pretty big on the, media. Website. So. Many different forms. Do, the email blasts. If. It walk there's a lot there's a lot right, well one of my favorite ones is actually SEO. Optimization. Huge. Actually. You know our next guest I'm not trying to plug anything yet well next guess is doesn't, uh from, BigCommerce. And. They talked very strongly, about, SEO. It's. Essentially. The cheapest, way to drive traffic to your website. Man you're not doing that at least I mean I'm in. This now something, but. That's just a side yo only, side notice with a small business owner so let's get back on track as I talk about the. First way to increase your business from everything. You look at. Oh. Yeah. Conversion. The average number of. And. Then we're going to look at the average person, so, how, often. How, much are they. That. Gives us revenue. You look at your market. The. Conversion, rate ever number of transaction average. Dollar sale margin. Do the five ways. There. Are all the outputs the. Result of, other things. We. Had four, thousand four thousand qualified these with immediate we really hit a 12-month period four. Thousand means potential customer. Let's. Say. Obtainable. For most businesses. I'm. You always in for higher but occupy, it depends on the industry okay it really depends on the industry as will. Be exactly where, your and your location that gets a variety, thing to go that. Thousand. Leads we, have a twenty, five percent conversion, rate what, does that do to the number of customers you ads within the year it, gives you. This. Is why I'm running it down there's a lot of numbers. How. Often under spending money with you so. Ten. Times a year working. Interesting tap on, average, their, customers. Example. Any. Money with you twice a year on average, talented, it if, you send. $50. One purchasing, three. Thousand dollars on the next but on averages, of your customers how, much, money enhance their spending. That, gets us. Yeah, thousand. Customers on average spending money with you twice a year, average. Spending a thousand dollars per transaction. I. Guess. It what that revenue would be. Thousand. Times two times a thousand. Now. Your profit margin is. Profit, we. End up at the end of the year.
Levin, Douglas in. Bra. All had these conversion. Rate. By. The average number of transactions, ever sought the tail revenue. By. Your profit margin into, your front. And so that's your base formula okay. This. Is where we look on the, growth champion, of your business. Increase. All. Your. Focus on all five of these. Increases. Again. It's going back to what you mentioned earlier. So. Something, they say you, can complete four hundred percent or. By, 200%. Or I took, involved. With. Just. What's, he making some mental change so. We. Had four, thousand. Bless, you yes right we're in spending its 12 months on, two to three strategies on, how to increase, those. Lease. LaRhonda. 10%. Increase. Nothing. Drastic here our. Handful of, them. To. Choose one or. Two even. Getting. Qualified leads for. Office, people you. Could say this is a. Good example of that right, you could say that this flagship store that we are here in downtown Austin, is, an example of it. So. We look at a handful, of strategies. Can. What, Glenn Beck's attorney marketing and whatnot that's. Meant for some expense. By. 10% so, over the course of the year you, got an extra 400. Days. That's. Not directly change the incremental, business right, the, next thing we look at, the. Conversion rate so we, had a 25, percent conversion rate. You, look to be beset by. So. 10. Percent of. Meant to change the 25 isn't 25, to 35%, it's, what's. What 10% of twenty five two. Point five so, we need these from 25% just. A twenty seven point five. It's. Fair right now most businesses couldn't see that's an easy goal. Now, looking. At a couple strategies here, there. Are some fun ones there. Are some easy ones you, look at one of the great ones with it is what makes you unique. What. Truly makes you. Not. Just not just customer service what. Truly makes you. Business. Services and I would definitely say it's the people, difficulties. And services, not, every, individual, different anyone has a different. Tactic. The, way to say. Build. Their before relationship with the client or customer awesome. We. Look at two, to three strategies in, conversion, rate how. They implement into your business to increase that 10%.
Pressing. Out so. We. Were. You. Know how many customers we head. Now. With, our update. So. That's my writing not, the greatest. Incremental. Changes we went from a thousand, customers. A, little vertical - that's. A 21%, increase your, customers. Next. Thing we look at average, number of trends n. We. Add an average of two. He looked at me preset by 10%. What. Do so. One out of every kind of tow. Incremental. Pain nothing. Drastic, incremental. Changes. Average. Number of transactions. That. Very tedious way you. Should segment your customers into. A handful of buckets non, converted, non, repeat and repeat things like that the. Easiest way. That's come back, how. Can I mention your. Customers, you, work there, are setting. The meditator. This. Is what and. So maybe when you are doing we look at implementing. Cost. And, asking somebody to come back maybe. Stay. On the floor say that but, that's. Not really, a big. Investment. Right. Minimum. One support. Once. Every 90 days yeah. All. Right I can see it. Average. Dollar per transaction. We. A thousand dollars ever done. An. Increase on this number. Gets. Us to 1,100. Incremental. Change 1,000. Numbers. Are. Too high for business. One. Simple question and. Every. Order. So. That question wants a look would, you like fries with it mm-hmm, now did you want supersize it. One simple question at the end of every sale to, increase incremental. Thousand. Hundreds, of thousands of customers turns into a. Nice. Little chunk of change. You. Look at one, great woman's chocolates. So. If someone walked in here in, LA I just got a new office I need an office furniture you, know what. Would be more checklist, for that person. Stationary. Product. For. Men sure. Everything. To build at this area does that all superior for you absolutely. And. Then things, that could be linked to that right so if they have an office. Smart. Devices for their office work or they. Network. There's their new small office in the tech, services even. IT service innovation to help you set up and, monitor, your network so basically if you know here's. What I'm conservative you, know. In. And out and everything, that they could possibly want, for this venture they're about to partake in you, haven't missed what. Those things are in your mind then. You. Know. You don't have to make assumptions. Push. Five. Bailey's, want that product or the service they, may not know that you, can show them. That's. Kind of what I. Or. Ask like. And. In our six types of silicon business this is a step to neesh the very next one is leverage rating system then, you take you've checklist and then you create systems for your team to, make sure that everyone pays that they have the, process, of. What's. Your would, you like fries with that question for cuz. That's just one. Or two strategies we. Look at unfunded. Obscenity. What would best for your business that, may not be applicable so, we look at what applicable for your business in this moment what has worked with it's not working I mean sitting flip to increases by 10% again, incremental changes. So. Let's, let's, say you, know the price with that example it. Doesn't apply let's say I mean it off to people who might say you want some paper with that but, you know if not. What. Would be another good example I'm. Just trying to brainstorm. You. Know it's.
Not Too basic. Yeah. Office, space what would you say. That's. Similar would you like fries with that so. A realtor, walks in here and. They. Have a new office. And. You notice that, maybe. Maybe they're the ones getting officer. Phoebe. Didn't start. We do. To. Us same day Linda yeah. Here. Thank. You I just wanted to get it outside of the just, because I think. Some. Side order I could. And. If you're a service-based industry. Right. So, there's a variety of ways to approach it that's just one strategy that we look at that. Gets us now to revenue, so. Our revenue before is tonight. With these 10 percent increases. Two. Thousand. Eleven hundred. What. Is that - square profit. Point. Nine nine. Million. Nine hundred. Twenty-eight. Thousand, two hundred. By. Ten percent. Revenue. Which, is a forty six percent increase, and. Again. Or. Eleven or two big. From. 200,000. To 290. Thousand film. $90,000, a 46%, everything, your business for any. Boy only. Make things. Along the way right right. And. Then what's awesome is. For, the next two or three strategies into the area that we test to measure along the way. Nine. Now we look at margin. Margin. Before was 25 percent. Our, new margin, increase by. 10% is 27.5. Again, you look at in canceled strategies here, one. Of the easiest ones. What, we have found our, own firm is that, business. Owners are the most hesitant on this one strategy then the customers increase. Your profit increase, your prices mmm. Increase. Your prices by 10% guess what happens. The. Easiest way to go. Is. Under through, when. You discount. Walking. Through how much increasing. Business you have to do to get vets you're breaking. On. Foot kind of that you look at what would happen if you increase, your prices by 10% and. How. Much you'd actually have to lose, in business to. Get back down to that. Breaking point meaning. I in percent. I'd actually have to lose X number of business in order. To not make more profit the. Question becomes increase, prices would. You actually lose that, number. Potential. Customer yeah, I mean and that's just a conversation there and again that's just one strategy we look at two different things that's one Margo. How do you come up with their strategy so to say her, business, if it's due, to certain businesses, you come up with a different set of before or do you run. Before. They do, it's very bespoke it's very tailored to the business okay, so we're definitely looking at what, is your business what is your industry which would market what.
Have You done in the past where you currently stand, I mean if it's a big we getting real detailed, with our business owners is good and it's, very much, tailored to where they're at. Cook them cool exactly. Yeah there's no groupie platter just basic, template oh good oh yeah we. What. We look at is implementing two three strategies what, those are and how we implement them are very different across industries across Mississippi okay. Will. Work. Absolutely. And so we're working through that system. It's. Not a blanket solution. For every business just. Like a human being. Like. Millenials. Snowflake, is built and. That. I. Think that's something that. I'm. Not recently, but as of late. We. Had our we, harvest chat about online storytelling. And we talked about how. That. Blanket, sales tactics, that pushing, the sale and it's not always going to work like a abusive. Mix, about that's, why you talk about storytelling, it's a way to connect with your audience. Trust, and kind. Of what we're doing with our business, trying to filter community, trust. Horse. Anything on you just want to teach everyone. Learn and. I. Just, learned a bunch on here I'm gonna have enough little photocopies of that stuff that I sent over there, I want. To put so much wall affecting. My. Business. No. Thank you. So, oh. Yeah. Where you're at what's, working what's not working we, want to create SMART goals, so. SMA, are key. Results. Orientated, with time frame so. Along, the way we're not just going what. Do we think we could do we, want to accept very clear SMART goals and it's routine they're smarter goals this being, the equity market, interpreting. The ward what. Gets measured will get done what gets rewarding will get done again, so. Our. Profit, at the end of the day what's. $500,000. Right. We. Ended up with a profit of about five minutes out none. We. Created four things with, our goal for. Profit. The family near revenue. All right. New. Martin. Play, Tibet at the 51% increase. Year. To year. 61%, in between I'm, not sure I know any business owner would, not want a 61%. Maurices, their prophet. Five. Some change, and. So, we want to make sure that we're creating smart goals along the way me know, that we. Are accomplishing that. It's a measurable achievable that within. The. Month maybe. So, we are discussing, the measuring along the way okay. Actually. I just. I'm. Actually not gonna advertise you know I talk about but. Build. On something you. Know rather rest, on your laurels or I. I. Do have a question now I think about it when you feel. Let's say you did this. Smart. 2575. Percent so, when you add 10% start. Back like, how do you add 10%. That's. My question it depends really on the business because. Some, businesses as an example if their current conversion, rate is 35%, and, we, know based, on your industry that you're that. The best, in your industry are hitting around 40 to 45 percent let. Me look at how do we close that gap now, if. In, your industry the best margin, is 45, percent in your in your at 44, everyone. Go okay, where. Can we increase other areas, I mean. The one, of the easiest one is the average dog for sale, that. An average number of transactions, are when, margin is, kind, of capped out for. The two easiest ways to increase because you already have people walking. Into your store there are knee on your website they're already calling your team. Not. Just a matter of how do you leverage that in a different way so, yeah so we increase it by 10 percent great what does it look like for the next year it may not look like 10 percent to 70 it may look like 5% the next year but. Other areas may, look like 20% next year right I mean. We have some of our clients who when. We first started working with them they. Had no marketing so. It was really, easy to, Stickley increase, the. Number of qualified leads that they were seeing on a week-to-week basis. Right. So. They were doing business successfully, with, nothing Herrmann once, in and handedly, marketing. Should be like a water closet like. A water puzzle meeting, when, you need more, business. You turn it on when. You don't you turn it off or. Maybe you just adjust a little bit you. Know so you have less literally, exactly, so marketing when done correctly is, like a water faucet where it's just a matter of what does our building speed right now and then, okay let's implement it or no maybe we do drawback. Because. You also don't want to broken it too quickly the business right. Exactly. So we want to make sure that while. You could maybe see a ginormous. Change in your business put. Your business handle, them one of the first questions all have some of our clients is great.
We, Know that we can turn this and marketing faucet, on now. How. Many more, customers. Can, you actually take on with with. The current system to current team the current structure current, operations, and finances what can you actually take up because. What we don't want to do is, put you in such. A bad situation where, now we start, to lose service. Start. Getting bad reviews you, can't handle, the growth you're taking on you want to make sure that's very structure and we, really, create a very detailed action plan to. Make sure that those, kind things don't take place. Breton pulled after the right and a great, way to help him. Back home there are a lot of ways to come back that's. A weird word but there's a lot of ways to go you know fight, against. Skeleton. Fastened, I have, friends who had their own businesses, who, are like I just picked up seven. Clients this month five. You find yourself now, you have 12, they, lost six of them you. Know so, I mean. Gold. An idea but, can you handle that idea can your team handle it cavity. Something. That. You. Shouldn't be your entire team. Won't. Work it might work temporarily. Hey. Where other things being probably. Work too hard at some point our life realizing, working, hard and working smarter, a very different. Ideas. For. It you. Also don't want to own a job you. Want a phone a business I, like. That. Opened, my first business almost. A decade ago now I realized. I was the one doing everything I owned. A job all, I had given myself was the ability to work with 80 hours for myself so, I didn't have to work 40 hours for somebody else I. Wanted. To own a business and that's. What we do it with our clients now we've walked them through how to build a business that works without them because, most. Of the time, especially. Those who are looking for growth they, don't want to own a job they. Want to own a business where I essentially, get that's. Right. I, want. To own mind. That's, very cool Michael thank you so much for, your, time. And. I will certainly tacky when something's asking a question face. To face absolutely. Dr.. Michael. Where can we find some of your materials, and working, to find you next at Austin absolutely. Online. So. Through. Our social channels, Facebook. Twitter. Instagram LinkedIn. Our. Next, complimentary. Workshop it's gonna be a great loss Country Club next. One's actually yes. We I host, wanted to do a must complimentary. My. Passion to help others, so. Whether, they, become clients or not is irrelevant to, me I really. Want to give that to the community here in Austin and so we host, these complimentary, workshop once twice a month and. So that's a great way to get, more detail on this and more. On the holistic you, have how to build visits. We. Were actually just talking about you may be may. Be hosting, one here yes at this space here in downtown Austin at 907. West fifth Street we, will certainly keep you posted 20 if and when he does that na together, we're. Hoping we can start a circuit of classes apartment our last speaker is also going to be coming in target. Negotiated. So come. In in August here, for negotiation. Classes, and I, brought. Your profits, in general. And also how to build. A business, that. Doesn't. Own. Your own business don't own your job right so, I actually really like that line, I'm gonna sign up thank, you so much I'm Jason I heard the moderator, here and. Next. Friday July 27th. 11, a.m. Central Time, we, will be doing a. The. Brahmic CEO. Company. That helps local makers. Actually. Brilliant. And, we're, very excited about that, following, dr. Marc Mike McCarthy. One. Heck of a math lesson and I can't wait they're laminate. This stuff forgot my wallet okay, David. What. Else didn't you know if you have any other questions, feel free to ask us on Facebook live David is here in our downtown flagship, station. We. Have we have essentially a daemon. In every office work. To help. Get. There, to, get your 800 thousand dollars more in here. Thank. You again. Anything. Else guys, lady. Computer. More legal, on the marketing, and everything that's all, absolutely. And stay, cool up there. Bye. Guys. Here. We're still alive watch.