Business is a Numbers Game

See my article below on "What is a NO Worth to You?"
Smart people understand the numbers so they make a lot of money. Desperate people always look for the quick buck, the discount, the hard sell, and the immediate gratification. They operate on the Urgent instead of the Important. They're always putting out fires and making excuses. Winners are objective, systematic, and rational. Most businesses operate at around 10% of their potential net profit.

The best way to understand the numbers in your business is to stand back and take a good, hard, realistic look at your profits and potentials. Business is not about sales; it's about profit. Work backwards and you will understand the numbers game. Where did the bulk of you income come from last month? Where did most of your PROFIT come from? Where could it / should it come from? When you factor in the time required to make money, there is easy money and hard money. Something that takes a lot of time to make the same amount of profit as does somthing that took much less time, is hard money.

Look at the links and ratios in your business. Do people who buy product A also buy product B? What are your closing ratios? What is the Lifetime Value of one customer to you? What is your Customer Attrition Rate? What does it cost you to get a new customer / keep or upsell an exiting customer? Look at the 80/20 scenarios: What is the 20% that works? Can you reduce the 80%? What activities/ who are unproductive? What/who can be removed, reduced, improved upon, or increased?

Are you focusing your energy and resources on sales that earn you 20% profit with no back end, or are you concentrating on sales that make you 50% profit with a back end, or 10% profit with a larger back end? Is the money on the front end or the back end? What can you automate? What parasites can you remove? What costs can you cut? What is your back end profit margin?

Can you break even on the front end or even lose money on the front end to make a large profit on the back end? If your Joint Venture income is 100% profit, as it should be, how much effort goes into your Joint Ventures? What is your exact return on investment from every effort and expenditure? Are you selling your precious time, when it could be bought or delegated, outsourced or automated? What is your time worth?

Should you keep your business or close it? Does it generate a database that makes/could make you a lot of money from another source? What are your alternatives? YAHOO! You Always Have Other Options. If you were giving yourself advice and you could remove ego, pride, emotions, and fear from your evaluation, what advice would you give yourself?

Have you spread your risk by creating multiple income sources that take no time or effort and earn you 100% profit through Joint Ventures? If you have ten income sources and you increase each one by only 10%, you double your profits. What leverage do you use? Is your money leveraged? Are you leveraging your equity, database, reputation, access, and cashflow to the optimal degree? You can access any resource you want through Joint Ventures.

When the numbers make sense, the you get wealthy. Residual income, profit, leverage, ratios, and the source of business is what it's all about.

Robin J. Elliott www.DollarMakers.com