The Proven Profit Formula



The One Business Article You Must Read …
It Transforms Businesses And Lives!


Additional cash flow can help resolve any other problem you may have … I am always willing to meet with anyone and help them resolve problems they cannot seem to undertake on their own, for whatever the reason … But, what I am writing here to you the Small Business Owner, Entrepreneur, and Professional, is possibly the most important bit of information about the growth of your business that you will ever read … So, let’s dig in!


I typically work on 7 areas of any business …

The 7 areas are:

Setting Goals – Managing Time

Generating More Leads
Closing More Sales
Increasing Number Of Sales
Increasing Prices
Exploding Profits

Licensing / Franchising What You Do


Setting Goals – Managing Time, and Licensing/Franchising What You Do
are quite lengthy … I will not explore them here in this blog … 



Steven Covey always talks about beginning with the end in mind … Everyone starts with setting goals and figuring out how to manage their time to complete their goals … BIG MISTAKE! … I work on the other six areas first – only then, after you have mapped out what needs to happen in these six areas, can you begin to formulate goals, establish a roadmap and plan adequate time for their implementation and completion … I start with the 80/ 20 rule – 20% of what Business Owner’s do every day generates 80% of their revenue … (small incremental changes produce major results) …


But it all comes down to this:


The Profit Growth Calculator
(The 5 Step Proven Profit Formula)

A 10% increase in 5 areas of your business almost doubles your revenue ($60k to $100k+) …
A 50% increase will TRANSFORM your business ($60k to $475k – a 690% ROI) …
If you will apply the strategies, a 50% increase in these 5 areas just might be child’s play …



OK … Let’s dive in!



Generating More Leads

What types of Marketing are you using right now for your business? Want to know the secret to Marketing … the hidden formula that will enable you to literally DOMINATE your profession???

Your Marketing MUST enter the conversation taking place in the head of your prospects … That conversation revolves around just 2 things –

there’s a problem the prospect has and doesn’t want …
there’s a result the prospect wants but doesn’t have …

There is a hidden formula that will enable you to create Marketing so powerful, your prospects will come to the conclusion that they would be an absolute idiot to buy from anyone else but you … This formula will allow you to out-market and out-sell all of your competition …


Interrupt – Engage – Educate – Offer


The Interrupt is your Marketing’s headline – and it MUST address the problem your prospects have that they do not want … The Engage is your Marketing’s subheadline – and it MUST promise the result the prospect wants but does not have … The Educate focuses on what it is you do that makes you unique – something your competition does not offer that you do – and that is of tremendous value to your prospects …

A Dentist that offers dental insurance to patients who do not have it … A Child Care Facility that GUARANTEES your preschooler will be reading at a first-grade level before entering kindergarten … The Real Estate Broker that GUARANTEES to sell your home within 29 days – or they sell it for free …

The Offer is something so compelling and valuable to your prospects that it is irresistible …



I enjoy explaining informational offers versus incentive offers …
Only 3 times should you consider incentive offers:

Common purchases – pizza
Emergency situations – furnace goes out in middle of winter
Impulse purchases – infomercial products



Understanding the Buyer’s Journey is crucial … This is where prospects are looking for specific informationAnd it also depends on their location along their journey, as they are working towards making an intelligent and well-informed decision … Do you provide this information?


Benefits of Ownershipwhy should I buy what you sell
Objections to Ownershipwhat may / will happen if I do buy
Vendor Selectionwho offers the most value for the price


Some prospects go through all 3 areas before purchasing – while some start with vendor selection –pizza, oil change (typically common purchases) …

How do YOU plan to implement this information?
Are you using an incentive offer or an informational offer?




Closing More Sales

Can you explain your Sales Conversion Process (I usually get some blank stares here) … To help you out, “How do you get the prospect to hand you their money?” Next, WHY do your prospects NOT end up buying from you (most say price) … Would you like to convert 30% to 50% of those non-buying prospects into sales?


Down-Sell Strategy –

A prospect declines your product or service offering … so you offer them an alternative at a lower price … The goal is to turn the prospect into a client, so you not only realize some short-term financial benefit … but you gain the opportunity to do business with them again in the future …

Florist – sells a dozen roses for $50

Just ONE $25 alternative Down-Sell daily would net an additional $8,000 annually … Suppose they had floral alternatives for weddings, lower priced options for funerals, etc. Can you think of just one potential Down-Sell you believe you could offer tomorrow?




Increasing Sales

Would you like to increase your number of sales by 30% or more?


Up-Sell / Cross-Sell Strategy –

Upselling – offering a higher grade, quality or size that the customer may be interested in at the point when the customer is ready to buy … McDonald’s – would you like your meal supersized?

Cross-Selling – offering other products or services which complement the item the customer is interested in, at the point when the customer is ready to buy … McDonald’s – would you like an apple pie to go with your Big Mac?


34% of prospects will buy additional products
or services at the time of their
original purchase IF they are asked to do so …


Auto Service Center Annual Program – Oil changes used to cost $30 to $40 – now they offer them for $10 to $15

They discovered the secret to increasing sales – get in front of MORE prospects so you can Up-Sell and Cross-Sell more often (usually where you make the most profit) … By performing the oil change at cost, they attract 5X the average number of customers, and 34% of them agree to additional, higher priced services …




Increasing Prices

Would you like to EASILY charge more for what you sell?
First and foremost, STOP DISCOUNTING!


Follow Me Here:

Did you know if some businesses discount their price by a mere 10% they now must sell 50% more just to break even?

For example, if you sell a widget for $100, and you have a 30% profit margin, you make $30 for every widget you sell … That means your cost basis for that widget is $70 … If you discount that widget 10% and sell it for $90 instead of $100, your cost basis is still $70 … Now you’re only making $20 in profit instead of $30 …

For this business to make $1000 in profit selling their widgets at $100 each, they would need to sell 33.3 widgets ($30 X 33.3 widgets = $1000) … But by discounting their price 10%, now they need to sell 50 widgets ($20 X 50 widgets = $1000) … They must sell 50% more widgets to get back to their original profit margin (33.3 X 1.5 = 50) … But when was the last time you saw a business offer a measly 10% discount? Most of the time they offer 20% to 40% discounts … and then they scratch their heads wondering why they are going broke …

The secret to higher prices is to increase the value you offer …

The biggest mistake Business Owner’s make is thinking that prospects only shop price … In reality – most of them DO shop price – but only because Business Owner’s give them no other option …


When everyone sells the exact same thing,
what is the ONLY differentiating factor? – PRICE!


You walk into a grocery store and there are 2 tables loaded with red delicious apples … The apples on both tables are identical – but one table is $.50 per apple – the other $1 … Which apple would you buy?

Now suppose the apples priced at $1 had a sign that said they were organically grown … You have just introduced a new value proposition that justifies paying the higher price …


Create more value in what you offer –
and you can easily increase your pricing


Consider “bundling” – which is to group together certain products to create “packages” which are then sold to clients … This creates an “apples to oranges” comparison and removes price from the equation …

Example: Home Builder or Remodeling Contractor

They typically contract with certain suppliers that offer them huge volume discounts … especially for electronics …

One Builder agreed to buy multiple packages of a whole house entertainment and security system including … a 50-inch HDTV, a complete high quality surround sound system, a complete home security system including surveillance cameras at all home entry points, and a complete fire protection and monitoring system …

The retail price for this package was $22,800 installed … but the Builder acquired them in volume for around $6500 since installation would not be part of their costs … Since the Builder already has the home stripped to the studs, installation can be handled during the actual project by their crew for pennies on the dollar …

Now imagine this Builder competing with other Builders in a moderately priced neighborhood … All the builders offered homes in the $150,000 price range … My Builder offered their home for $156,500 … which included the additional $6500 out of pocket expense to the Builder … and their home comes standard with a $22,800 home entertainment and full security system for FREE!


Which Builder would you buy from?


In fact, what if this Builder offered that new home for $160,000? Would that additional $3500 prevent anyone from buying this home? And does it still look like a MUCH better deal than the $150,000 home without the system?

If the additional $3500 increase did make a difference due to loan qualification standards for certain prospects, the Builder always has the option of reducing the price back to the $156,500 … They could even maintain their original price of $150,000 and lower their profit margin on each home sold … This would allow them to possibly double their normal sales volume and practically double their overall profits every year … After all, they’re still making around a 30% profit at $150,000 …

A Home Remodeler could use this same type of positioning for every remodeling job they bid on … Starting to see the potential here?


Could you create new products or services
using this strategy?




Exploding Profits

Would you like to instantly increase your total revenue by 10%?


There are 2 major ways to increase your overall profitability … increase revenue or decrease your costs of doing business … Let’s focus on increasing your revenue, because that one is REALLY EASY! Simply RAISE your prices

When was the last time you raised your prices by at least 10% (crickets!!!) … Most businesses believe that ANY price increase, no matter how small, will lead to a mass exodus of all their customers … So, let’s determine the financial impact to put this strategy into context …


Let’s say you sell a widget for $100 and decide to increase that price 10% to $110 … Will that small increase REALLY lead to a loss of customers?


A few will leave, but they are most likely your biggest price shoppers that show NO loyalty or patronage to your business … But even though there will be some customer attrition … to what extent? The business is now making an additional $10 … ALL of which is profit … That’s a 33% profit increase … For this business to make $1000 in profit selling their widgets at $100 each, they would need to sell 33.3 widgets … But by increasing their price 10%, they only need to sell 25 widgets … That means that just to BREAK EVEN, this business would have to LOSE 25% of its customers over a measly 10% price increase … That ISN’T going to happen!!!

Of course, I err on the side of caution and test the increase on a small scale to gauge the reaction … There simply is no FASTER or EASIER way to generate additional revenue …



When your strategies get them to contact you more, buy from you more, buy more often from you and stay loyal to you, pay more for your services because of the outstanding value you offer, and then you learn how to keep more of the NEW revenue growth as profits …






Dave Smith
Business Coach & Marketing Strategist

IMJustice Marketing




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