136: How To Combat Wastage + How To Increase Margins
Business Coaching Secrets with Karl Bryan
BCS 136: In this episode, Karl answers questions about:
– How to combat wastage?
– How to increase margins?
Karl Bryan helps business coaches get clients. Period.
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EPISODE TRANSCRIPTION –
(transcription is auto-generated)
[00:00:00] Karl: Welcome to business coaching secrets with Karl Bryan. If you wanna attract new high end coaching clients, fill live events and build a wildly profitable coaching practice where business owners pay, stay and refer. You’ve come to the right place in this podcast. Karl provides his keys to the kingdom for finding and signing. High paying clients and building the coaching business of your dreams. Here we go.
[00:00:40] Christian: Ladies and gentlemen, boys and girls coaches around the world. Welcome to another episode of business coaching secrets. It’s your boy, the road dog with of course, none other than the king himself calling from the palace of all palaces. Is that a word style king Karl how are you? Big shooter.
[00:01:02] Karl: I’m doing good shapes.
How you doing buddy? Good intro. OK, man. We’re sounding like a rock story must had your wheaties this morning.
[00:01:09] Christian: Well, you know what it is, right? So here’s the deal. When I, I, I know why I need to step up my game. When I read an email coming in from KB himself. Asking people, if they have extra chairs available for the holidays.
I figure I must be doing something wrong because I have some deliver to you,
[00:01:33] Karl: I got a lot of feedback on that. Well, maybe we should set it up. So they’re listed. They’re probably pretty good chance of getting my emails, but I can’t quite remember. Remember it was something to do with if you don’t have any family.
[00:01:47] Christian: First off if you have, if you, if you’re looking to get a some good nuggets in the morning and perhaps even slightly offended, definitely
admitted insert rectum, but the doctors described him condition as stable.
Now are we gonna do dad jokes? Like, is this is thing now,
[00:02:17] Karl: and then
[00:02:19] Christian: less disruptive breaking news during the holidays. If anyone is with no family to spend Christmas with, please let know I need to borrow some chairs.
[00:02:29] Karl: Wow. I . I D. My dad, my dad edits my emails for me and, he thought it was hilarious.
So we went with it. Hopefully, we didn’t too, but the doctor, right? The condition is stable. I thought that was bloody.
[00:02:45] Christian: hilarious. There you it’s.
There’s it’s all good. Wow.
[00:02:55] Karl: Anyways. all right. Let’s rock note. What do you got for bud? Well,
[00:03:00] Christian: We’ve got questions pouring in kind of all over the map a little bit, actually. But the first question that, that came in sort of tying back to last week, question is you mentioned the importance of improving gross profit margin.
I work with a manufacturing company with lots of wastage, any ways to combat that, help them out. So obviously time back to last week we were talking about this very thing, gross profit margin, for more on manufacturing tips, check this post about the cost of burntables and how can they help your production. So specifically for a manufacturing company. But what wastage, I would imagine that’s the true question here is they’re talking about wastage, which I’m sure when it comes to gross profit margin, you see a ton of, so what advice do you have?
[00:03:39] Karl: there anyone that can help them out? You know, manufacture so well, I’ll tell you a funny story that actually literally a few days ago Had a coach, you know, coach ended up on my phone and basically his you know, he, he’s got a client and it’s not going very well. Yada, yada Yeti, you know, there’s kind of a conversation of, look, we’re gonna have to turn this off.
There might be a conversation about, you know, returning some fees coming, you know, and he’s, he’s understandably, you know, he’s looking for a little bit of advice, right? That’s a smart thing to do. Most people just, you know, freak out. You know, deer in headlights and what you need to do is you need to, you know, reach out to mentors and see if they have some guidance for you.
And look in a nutshell. Here’s what I said. First like, okay, little red arrow you are here. Like, do you want to continue to work with this person? Right? Because it, sometimes a coach client relationship is just not right. And that’s OK. Right. Like road dog is not the perfect coach for everybody. I am definitely not the right.
You know, the perfect coach for the right. You know, I mean, for individuals like you just, there, there’s just sometimes not a fit and that’s OK. Right. And by the way, his, you know, he felt like there was a lot of opportunity there. He wants to continue to work with them. They just, you know, there’s a business partner and there’s some issues.
That’s the reason why they haven’t got out of the gates. So that that’s where I need, I had to start with the little red arrow you are here. What is the situation? Right. And namely, do you want continue? He said, yes. And then it was. Okay. What so where I went is, guess what, what are their revenues? What are their profit margins?
I can’t, it was something like, they were doing 500 grand, so pretty small company. But here was, I dunno, exactly these numbers were, but they were like 20% gross and they had like 4% net margins. I’m like 4%. So first thing, you know, Like, this is where you start, right? Because you can make some, and by the way, because their revenues are low.
Ideally we go from 500 to a million. Well, actually, that’s not necessarily true, but you, you get the idea 500 grand. I can help somebody at a million significantly quicker than I can with at 500. And I can help somebody at 500 significantly quicker than I can with somebody at two 50. Right. So that kinda makes sense, but, but 4% margins, like we have a program internally where we have a New York account that he’s got, you know, a team of 35 accountants underneath him.
And what he does is he will come in free of charge. He’ll come in and assess the financial situation for the company, including going over tax returns over the last few years. And it’s kinda like a 50,000 magic trick. Right? So I, the first thing I did, I said how you utilize this program, right? And again, the answer was no.
So that was the first thing. But really Doug, what I wanna say about that and what my conversation looked like is, look, you need a story. Don’t if you approach this And the way I think most coaches would approach it. Like, Hey, you didn’t do this. I did that. What about X, Y, Z, right? Like, that’s not the way to approach it with kind of facts and figures and, you know, think of features and advantages in a sales process, you know, going to details, which you’ve gotta do is you gotta, you gotta go in there with a story.
Right. And what does every story need? It needs a beginning. It needs a middle. It needs an. And very important, you know, some kind of conflict, right? So that’s every episode of Seinfeld three’s company breaking bad, you name it, Ted lasso. Every, every story’s got a little bit of conflict, right? So I’m like, I want you to think of what that story looks like before you speak to her.
And he wasn’t thinking anywhere along those lines and not story like bull crap. Story of like understanding the situation and you gotta, you gotta get them on the phone and she needs to rebuy into the dream where they can go. She needs to be explained in no uncertain terms that look, you know, we were like, some of the challenges arrived here, had a lot to do with the fact that we had made some decisions and then your business partner stepped in and we had to reexplain this re you know what I mean?
Like basically there was some challenge. Challenges in it around that. Right. Like, so, so that road, dog, when I you know, like thinking through a story before you jump on the phone, right. Like that’s important, you know, getting on there and, and, and pointing fingers would be absolutely the wrong approach.
Right. So anyways OK. So the question was around margins, kinda so back to like finding margins And that’s what, by the way, the, when the accountant comes in, you know, this is the kind of thing, like, he’s gonna look at that 4% and go look, we can take that four and I wanna be able to, you know, he’s gonna wanna get it to 10, but when he does that, he’s literally gonna put money straight into their bank account that are more than, you know, gonna cover What his fees are.
In fact, and Warren, this might be a little bit off topic, but Warren buffet, I, I wrote a, an email in the last, very short period of time. And Warren buffet says, this is part of the conversation had here, but this is what is relevant. Warren buffet, what does he say? He looks for something that he can buy for a penny, sell for a dollar and that’s habit forming.
Okay. And in the email, I basically said, just drop the mic, walk away, Kobe Bryant’s style. Like this is over. OK. So buy for a penny, sell for a dollar and is habit forming. I would write that down. Like if you wanna be wealthy, you want your clients to be wealthy. I encourage you to write that down.
There’s a chance that it just fit you like a punch in the mouth, the way that it did for me. But maybe it doesn’t as I say it here, but I think that this is the kinda thing that can really That’s a different way of looking at business. I want you to think of chewing gum. I want you to think of Facebook.
I want you of your Gmail account, right? Again, something you Wells example, but like, you know, gum things that are habit forming Yeah, I’d say anyway, probably just your, your margins on that are gonna be real good. Not necessarily in the individual buying, but as a lifetime, you know, don’t just think about the individual, which absolute gross profit margins are about, you know, income on the one transaction.
But ultimately I also want, you know, the margin conversation that I’d be having that I would be working towards is over the body of work, right? Like the lifetime value of a client But bottom line look grow. I, I love the question. Road, dog profit margins, like they’re truly magic pillar business, and a large reason why co wrote a book accounting 1 0 1 for business coaches.
You know, if you don’t know margins, I think they said this recently, it’s a little bit harsh, but like, if you don’t understand profit margins, you’re a joker, right. Harsh. But I, I want for everybody to listen to delve into this topic, even though you don’t feel like you’re an account that you don’t feel like you’re a bookkeeper numbers, aren’t your thing.
Right. Completely your relevant stop. It don’t be thinking along those lines. Right. You know, amaz when I think back road, Doug, like how, you know, how far I got my business career. My coaching career, the number of clients that I helped, but I really didn’t understand this stuff. Like I, I was doing it instinctively, but I didn’t understand the mechanics, the importance and kinda of it, you know, like, like when you buy something for a penny and then that thing sells for 10 cents, right?
It’s a 9 cent gap. It’s not like a 9% gap, right? It’s it’s basically, it’s not like they’re 9% more profitable. They’re 10 times. It’s a 10 times improvement on profitability, right? So again, that 9 cent difference, right? Like you buy something for a penny and you buy something for 10 cents. It it’s one is 10 times more profitable, right?
Are all the funnel hackers and their cell cell sell and drive traffic drive traffic drive traffic. I’ll let you decide whether, you know, this is where they’re starting. This is the way that, you know, the path that they’re following with their clients and, you know, for their own businesses, I gotta tell you they’re just not right.
And yes, you should drive. And sales matter and conversions matter. Cause without revenue, I can’t improve the, you know, the margins, but understanding that as a business principle, we’ve really gone, you know, we’ve touched on this a of times the last number of podcasts, but I will take that and really start to delve into it.
You know, just maximum profits, like working with somebody that they, you don’t want them to confuse being busy, being successful, right? Like, like said another way. If something costs you like 10 cents, right. And you sell it for a hundred, that’s a 90% margin, right. Rod, you get that right. A buy it for 10 cents.
Like sell it for a dollar, right. It’s a 90% margin. Right? Well, like in. Kids, you know, elementary math can get that one done. Right. But if you take that margins from 90% to five, OK. What do you need to do? I want you think about that instinctively, right? It was selling for a dollar with 90% margins and you wanna increase the margins by 5% from 90 to, right.
How would you get that extra five? And lemme tell you, grab a calculator, do the math, and here’s what you’re gonna find. You’ve gotta sell that same product for. To improve the profitability by 5%, not $5, a hundred dollars. Right? So you go from 90% margin to 95, you gotta take your price point from a hundred, to what I’m saying.
It’s so much easier to increase margin by decreasing the cost by buying better than raising, you know, by raising the price. What what’s gonna be easier to get something for, you know, again, a little bit cheaper or, you know, getting an extra hundred dollars for a hundred unit. Yeah. So RO dog kind of going through that, but you know, the translations is business owners are confusing, being busy with being successful.
They don’t have somebody in their ear yelling this stuff, right? Like just, you know, this, they’re not gonna do this instinctively on their own or here’s another one straight out of my book that I, that I like, right. You get RO Doug, you get a client and they have $800,000 in gross revenues. They’ve got 50% gross profit margins and 20% net profit margins.
And their break even is 400 grand. OK. So 800,000 company, $400,000. Is their break. Even 50% gross profit margins, 20% net profit margins. Well on the first 400 grand. Okay. They make 20%. So that’s 80 grand. OK. On the second 400 above break, even they make 200,000. Okay, so which one would you prefer? 80,000 on 400 or would you prefer two on four?
Obviously the answer is you have control if you, that you gotta control expenses about, I it’s worth saying to, you have to manage your client psychology because doing this stuff is boring. You know what I mean? It’s just that, you know, bad advice is very expensive. Right. So, so anyways, RO Doug, yeah. I’m glad we’re getting a lot of questions around gross profit margins.
And I think that that’s you know, I think it’s people, I think I hope that coaches, if we can inspire them, you know, like I used to know a hockey rink and one of the things that like, you probably don’t need to be a hockey coach to know that most kids are kind of obsessed with scoring goals. Right.
Pretty straightforward. Well, one of the things that I did at my hockey rink is I made an award for the most assist. Right. Why I wanted to change the kids psyche. Like I, I made most assists, more important than points, right? Because again, I had all these kids running around trying to score goals, and I knew that the teams that won were the ones that were able to move the puck around.
Right. Like Wayne Greski the greatest points like the points that Wayne GSKi has versus the guy in second is just, I dunno what they’re but he’s got like twice as many points, right? He basically, he was a master at passing the P. So, so anyways, RO Doug, you kinda see the way I’m trying to change the psyche of the kids by rewarding assists versus goals.
Because instinctively as they went to goals, I would take that to revenues and expenses. Everybody’s revenues, sexy, it’s ego. It’s like, oh, I cracked a million. I cracked a million, but you, and I know that a million bucks, we know people that have done a million dollars in a day. And, you know, the next day isn’t nearly as exciting as you’d think because their margins are, you know, so tight and then they’ve got refunds and they’ve got, you know what I mean?
You get it RO dub. It’s not sexy, but it
[00:15:38] Christian: important. It’s, it’s interesting because what it’s amazing to me, how few people actually know their numbers. And I just wanna give kind of an example here that I ran into last week. I had a conversation with a company that was looking at possibly doing some online marketing and you know, very, very good contract possibly.
But the funny thing is when, when I was looking at their numbers and the big one that stuck out for me is they’re, they’re a fulfillment company, right? So they, they actually help solar dealers with their fulfillment of installs. They have a 3% activation rate of the dealers that come to them of actually putting an order with.
So my question is why do you need more leads when you are only converting 3%? Right? Like it just it’s boggling how many people just don’t understand their numbers period.
[00:16:26] Karl: That’s great. The end drop the mic. I know, right? It’s not stupid. It’s not such perfect. Like that’s it, man. That’s the example. And like this, like what they it’s like when everybody goes to Tony Robbins to build a better company, to make more money.
And then when you get there, he explains that what you can, what you wanted when you got here is very different than what you needed and what you’re gonna take away. Right. So what road dog did with that client is he changed. He’s like what they came to him for and what he delivered was very different.
But if he doesn’t manage their psychology and do it in a way so that they are educated and they’re feeling, you know, empowered and like, kinda like it’s their decision versus road dog’s decision kind of thing, right? Like again, and gonna take. It’s gonna take education. It’s not gonna take a no, no, no.
Here’s what we’re gonna do. Like that’s, that’s just not gonna work. And if you’re a business coach, no doubt, you know that, but super important, man. Super important. I love it.
[00:17:16] Christian: So you mentioned the Warren buffet thing, which I love, I hope everybody wrote that down. Buy something for penny. Sell it for a dollar and it’s habit forming for, it reminds me of, it reminds me of, and you’ll like this one.
I’m not sure if you heard this one before it was a rowing team. Right. And I think they were rowing team. Think they came in second after training their, their butts off and everything else. Their whole model between that Olympics and the next one was, will it make the boat go faster,
[00:17:47] Karl: faster? Love it. Yep.
[00:17:49] Christian: So everything from what I’m about to eat, will this make the boat go faster? This training I’m doing go faster like that, that psychology. Imagine if, if, if a business owner had that psychology inside of wanting to know their numbers, Like that would be
[00:18:07] Karl: next level thinking I, so road, dog freaking love it.
Okay. So here’s what I, here’s my takeaway that I hope everybody will possibly action. Okay. So what you’ve gotta do, like I’ve talked about so Zuckerberg had what I re I think north star is what it was referred to as, I don’t know if I’ve heard that somewhere. It was him or it was Gary Baner check, whatever north star.
So does it, does it help us grow? So you’d come to Zuckerberg and you’d be like, you know, road dogs, like, Hey Z, I got an idea for the company. And he’d say, what is it? And the framework in his head was, does it help us grow the same way the rowing team doesn’t make the boat go faster? If the answer was potentially yes.
Zuckerberg would take the meeting. If the answer was no, he didn’t take the meeting. Right. So then Gary Baer Chuck’s primary question is, does it get me attention? And if the answer is yes, He will undertake it. And imagine if you’ve got a room of 15 people and then I’ve got a room of 1500 people and then somebody’s got 150 in the middle.
Which one is Gary, you don’t. I want you to channel your inner Gary Baner Chuck, which room are you showing up to? And I would imagine you’re gonna come to my room with 1500 people as opposed to 15 or a 50. Right? Gets you more attention. So I want you and understand this is your business. You might wanna make a million dollars and buy a Ferrari.
You might have three kids under the age of five and want to be able to spend time at home and more than happy to just make 150 grand. Like you gotta work out your north star. Like, what is that question? And then use it as a framework. So every time you go to it’s like taking on a client earlier, remember we, you know, speaking to a coach and he’s got challenge with a client.
My first question is. Look, do you want to main, do you wanna continue with this client? Cause the reality is it’s not like there’s a shortage of people to take on business, coaching out. There’s not a shortage of companies, right. That need a coach. 5% of businesses have got one. So my first question was that, and I, I don’t know if everybody would’ve gone there, it was more like, how do I salvage this?
How do I not give my money back? How do I, you know, yada yada YY. And I’m like just, whoa, whoa, whoa. Right. So I, I love it. Road dog. And I want everybody, you know, my question. Does it help a business coach make a hundred grand a year, right? From a standing start. There’s my primary. You know that question, you bring a program, you’ve got an app, you got something you wanna plug into the software.
That’s where my head’s going. Does it help a business coach make a hundred grand a year from a standing start? Right. So anyways, I love that. So they, they gotta come up with their equivalent of, does it make the boat go faster? Cause RO Doug, I think they hear this, but then it’s not about hearing it and going wow.
RO Doug, that’s an amazing question. It’s about OK. There’s a framework, go and adopt your own question. What is it? And then come up with a really, really, really, really good question that you own not road dog’s question. Not my question, not the rowing team’s question, but your question it’ll make your life a whole lot easier.
So I love it. Shoots. I love it.
[00:20:58] Christian: I love that it, it, it not just is one thing. It’s like everything, every decision that you make, but by the way, that will it get, will it get me attention? I actually think you know, who else used that one? Very, very often. Like every single time Marilyn Manson, right. Also a person that was will it.
There’s no such press, there’s no bad press. Right? There’s only press profit margin. Is there like what specific things can they do to increase margins? Like, do you, how, how do you answer that? Do you have some
[00:21:35] Karl: specifics there? Okay. So a menu. OK. So it was a manufacturing company, right? There’s a metaphor Oh, I just called downtime downtime.
It was okay. So, and then, so just, you know, fix your downtime and cause you’re ultimately cuz very important. You wanna help? It’s one thing to say again, it’s one thing, okay. These guys got 4% margins and saying, Hey, we’re gonna take from four to 10, but if you don’t, you know, if you don’t know where you’re going, any road will get you there.
Right? And you want to confuse being busy with being successful, knowing exactly where you’re going prior to starting would make. You know, a lot, probably, you know create success quicker. What is downtime? So defects is D so think of, you know, like poor handling and quality control maybe be like some, you know, defective products, that sort of thing.
The O over production. Right. So just like picture a restaurant and what they do is like the guy’s super busy and then it’s the owner. That’s doing the ordering. Okay. Well, the supplier calls up and he says, yeah, just do the same order as last week. As last month, right? Well, what happens? They they’ve got too much lettuce already and they just get a whole nother whack of lettuce.
Right. And then what happens is the lettuce goes into the freezer. And if you know anything about owning a restaurant this is, I don’t need to taste your salad to know that if you were keeping the lettuce or the tomatoes or the burgers or whatever, frozen for too long frozen period, but then frozen for too long.
It’s not gonna taste as good. Right. So, so basically just managing that kind of thing. What waiting, waiting is one of ’em. Just think Uber, like Uber went to new Heights. As Uber I’ve discussed this as, as network effects. That’s a, you know, I love, but like Uber is the, was now rolling down the hill for Uber because their drivers actually don’t have that much downtime.
So therefore the guy who’s driving the Uber can actually make a imagine if you were an Uber driver and you got like two calls in an entire day, The next day, guess what you’d say, I’m gonna go do something else. I can’t make any money. And then it’s like, I’m on call, like a high end doctor. It’s ridiculous.
Right. So, so waiting, thinking about that, it depends on the different type of business, but you know, like we’re, we’re, you know, manufacturing something and we have one wood laves and like you’re using the wood lave, what am I doing? I’m waiting. Right. So these types of things. N is something to do with talent, not, not utilizing talent, let’s call it.
Right. So, you know, just fully. You know, your team, the skills within your team, the potential within your team. Just because somebody’s younger than you doesn’t mean that they don’t perform at a higher level or, or somebody’s younger on the team, you know, potentially that can be a smart look. A better example is you own the restaurant and there’s downtime.
The windows need to be cleaned. The chairs need to be put on top of the tables. Could do you need to do that at the very end of the night? And in some cases, the answer is yes, but a lot of the time the answer is no. Like somebody could be cleaning the windows throughout the day, instead of at the end of the night and the beginning of a shift.
But the problem is that takes management, which a lot of people have poor management, poor leadership. We talked about that a little bit. I believe it was last week or the week before where there’s like four levels of making income and management, you know, implementation is the lowest level. And then management was the second to four, but like, you gotta manage people, right?
Like management’s not the highest paid activity in the world, but it’s, it’s significantly higher paid and significantly more important than the implementation. Right. T is transportation. Just think of that, you know, The unnecessary movement of products. If you watch the profit and you know, he’ll go into a place.
One of the most important things he does is he, he sets up a system like, do you understand how restaurants work? There needs to be what they refer to as flow? Cause you can’t have people running into one another and moving back, you know what I mean? Like me getting out of the way of you. Like, you gotta waitresses, you need to come in one end and food’s gotta come out the other, right.
You can’t have people bumping into one another. Maybe a better example is I believe it’s FedEx. Or one of the delivery companies, but I believe it’s FedEx and they changed all of their roots. So their driver never, the drivers never do a left hand turn, if you can believe it. Like how cool is that?
Right. And why? Because left hand turns involve street, light presum. You live in north America, a left hand turn involves street light. Right. So they, they don’t do it only. They changed all of their roots only to do right. Hand turns. Right. So like, how cool is that? But you talk abouts, you know, transportation and unnecessary movements.
Excess inventory, I guess I kinda handle that with what I saying about the restaurant, but just dead stock. Very often you get a business that’s scrambling you Don. Margins get crushed with dead stock because it’s all paid for. Right. And then it ends up getting sold for a loss, maybe break even or worse.
It ends up sitting in the middle of nowhere’s bill. Well, this is cost a good sold, right? So you you’re, you’re wasting, you know, those, those chairs that you built are sitting up there doing nothing that that’s sucking the light outta your, your cash flow and your gross profit margins down where am I down time?
Grow dog, him motion. I think so. Okay. An example, one of the things that I would do a lot of the time, let’s assume that you’re working in an office, right. So you’re working in an office and I would look at like where the I would look at where the the chair and the filing cabinet and that sort of thing is so.
So I’d be looking at like if they were wasting motion a lot of the time within their own office. One of the first things that I would correct is that so easy to do ridiculously overlooked, very, very powerful. I think again, for a lot of the clients, you know, a lot of our coaches, they might not be working with manufacturing concerns.
Just kinda what I’m trying to say in a roundabout way here, going into somebody’s office and making it more functional, like what I’ve had a home office. Two decades, like almost, I mean, almost forever actually, but, but I’ve worked outta my office for much, two, well way for
distractions. You know what I mean? And now go straight into my office. I mean, my problem is getting outta my office, actually, do you know what I, so I don’t have that. I don’t that worry. So that works very, very well for me, but that could fall under motion waste where maybe a home office isn’t right. For a specific individual.
That’s not what I’m trying to think of. Motion in terms of the restaurant the office, the filing cabinet You know, and then E is excess processing, you know, just, you know, returns online. We talked about that, but. You know, there’s, there’s lots of just excess process. Just look you, you need to Casey, you sell something online, you know, mugs t-shirts, whatever.
You write the wrong address on the box. Cause it’s quality control will fall in here. You know, you write the wrong address on the box and then it’s a whole rig and the client can’t find it. And then when the client does ask about. The the, the item, and then you need to go, how difficult it is it for you or your staff to go track where it is.
It’s like, oh, you know, it arrived in Minnesota and it will get on the truck tomorrow. Like how easy is it to be able to relay that information and, and how readily accessible is that? So anyways, that’s downtime road dogs. So tho those would be some things that the thinking about, you know, just look, poor business owners, they do the wrong things.
Like lowering pricing prices, adding products, adding services. You know, do the wrong things, but rich business owners do the right things. And that would be maybe, you know, like nicheing down, like going an inch wide in a mile deep creating offer stacks, right? Like create an offer so that your offer is totally different from the competition’s offer.
Remember, you don’t wanna be the best you wanna be the only, well you do wanna be the best. You always wanna be world class as a standard, but that goes without saying I rather than working to be the best work to be the only right. You know, coming up with an ups. You know, do you know, do you want me to supersize that coming up with a down sell, right.
Very powerful. You sell swimming pools for a living well sell jacuzzis, right? If the client set up, like if somebody’s buying a swimming pool and spending 50 grand, I can tell you they have kids under the age of five. Right? Well, a jacuzzi can entertain them as much as a pool almost at that age. Well, if you can’t, they can’t afford the $50,000 pool.
Maybe you can make. You know, hot tub sales as an example, or compelling offers, making it really, really difficult for people to say no to you. Big a mistake. A lot of business owners make, I was having, again, a long conversation about this this morning, but most people think that everybody needs, I was talking to somebody she’s a psychic, right?
She has she’ll I imagine psychic that work for her at one time. Right. And taco about business unit, how much she paid them and how much they charged. And I just told her, I said, look, if I had, if I was the psychic, here’s what I would do think gross profit margins. As I say this, I said, how much does it cost to come get a psychic reading?
And it was like, it was a few different variables, but it was, it was like hundreds, right? It was like 250 bucks. Let’s just say, right. And I said, with a million million, million percent certainty, I would do the psychic readings for. Okay. And then what I would do is you’re a psych. If you go to a psychic, there’s a good chance.
What second, third, fourth order consequences. Somebody died in your family and you would like to visit them. Well, maybe what you could do is sell a retreat. So it’s a psychic. Okay. And here’s Lucy, she’s in the room. This is what she wants to say. This is what she wanted to remind you of. And then I go, look, here’s what we’re doing.
We’re doing a three day retreat. It’s gonna be 10 grand, but we’re gonna invite Lucy, your sister, your mom, your dad, your, your child, right. And we’re gonna invite them to the retreat. So, if you’d like to come, there’s gonna be a lot of families. There’ll be some emotional support. We’ll be doing a little bit of personal development as well.
Cause I think that’s part of the grieving process, but if you’d like to come we can finance it. I’ve got third party financing available to do. The bottom line is I would do the readings for free, which are like hundreds. And then I would sell them into a 10,000 unit where I’d invite them to a retreat.
And then part of that would be revisiting with Lucy, their, you know, I hope I’m not minimizing it dead relative, but you know what I mean? Like revisiting Lucy, but we’re gonna do it in a retreat and we’ll invite her there too. Right? Well, I gotta tell you that my business model is gonna kick the crap outta your business model.
If my unit of sale is 10,000 and yours is two 50, and then by the way you leave and there’s nothing else to sell them. I said, like, that sounds like a really bad business model. Right. But, but how did I get there? Which is important here, right? Gross profit margin. They’re selling a $250 unit and I’m selling a $10,000 unit with massive margin.
Right? So that’s a business model, maybe a little bit, but rich owners do the right things. If I’m a psychic and I do what I just worked on and she works on, you know, making it easier to, she’s trying to come up with ways to drive traffic to our two $50 offer. You see how. That’s not a good use of our time that maybe not the best use of our time.
Just doing smarter things, you know, wealthy people own the right things as well. Right. So like, Poor business owners kinda do the wrong things. Rich business owners do the right things, but wealthy people own the right things. That’s what I’m trying to say here. Right? Think real estate think valuable stocks, think valuable assets.
Think of a platform. Again, I profit acceleration software. It’s a platform. Right. Facebook is a platform. Uber, Airbnb, these are platforms. So like, you know, invaluable businesses with recurring revenues you know, competing in a growing market. That’s owning something, owning the right things is owning a business in a growing market.
Right. Owning real estate in a valuable real estate market with a kick butt school and a sports stadium nearby you know, something really cool around it. So anyways, just focus on doing as a, you know, sorry, sorry. Less successful. I would say focus on doing. Then investors and wealthy folks focus on owning.
Right. I let her know if I’m dropping that properly, but concentrating and focusing on doing versus focusing on owning, will you very, very different results, possibly less results in the short term, but massive results over the long term, right? Like, like I don’t wanna own the train lines. I wanna own the train trucks.
Right. Think about that as a metaphor. Right. I think, you know, another thing I said, road, dog, when we were in Cancun that I get a lot of, you know, having a couple beers with the folks and whatnot, and I get a lot of feedback and some dialogue around this, but like entrepreneurs wanna make it investors wanna keep it.
Right. And it’s like, but I’m an entrepreneur. Like, you know, I’m not earning enough. And I haven’t built a, a process for myself to be able to keeping it cause I, I gotta earn it and I’m like, OK. But understand the framework, is that what stage? And there’s never, you should start investing when yesterday, right?
The best time to plant a tree was yesterday. So you might as well do it today. If you only make like, let’s just use $10,000 a month as an example, you know, just take like char you know, profit first, take 10% of that, a thousand dollars and invest it every month. If you’re not gonna invest a thousand dollars on 10, you’re not gonna.
A hundred thousand on a million, the same way that if you don’t, you know, provide for charity, if you don’t donate and provide. It gets Christmases coming around the corner, right? As we, we record this, if you’re not gonna give to a family now, wherever you’re at financially, when you really crack it, don’t think you’re all of a sudden gonna come.
You know, the super donator. It it’s, it’s a habit. It’s maybe it’s warm up at habit forming. So anyways, I. Had a lot of dialogue around that road, make it investors understanding
there, 20 things, or maybe right now, 80% is what you gotta be making. And 20% is what you’re keeping. And then maybe in the future you can transition towards 80%. Of your concentration and your wealth is, you know, you, you, you know, maintaining it, investing it intelligently and 20% you’re out there pounding the pavement and earning and you know, doing active deals and, and whatever, you know, if you’re a coaching, you know, if you’re a coaching business, you’re, you’re coaching clients to make income.
I dunno if I’m explaining that all that well road dog, but I really believe that poor people do the wrong things. Rich people do the right things, wealthy people own the right things. Okay. My opinion is that that’s got massive power and I. Our business coaches can take that away. So there you go, bud.
That’s what I got, man. What do you
[00:36:16] Christian: think? Wow. OK. So little scrambled. Not gonna lie. You almost lost me at psychic, so I’m just gonna go there as well. I, no offense to psychic. Okay. So a couple of points. Holy smokes, dude. Like you were all over the map there at the end. Cause I had a really good one. And I’m gonna get there, but first I’m gonna pull a column and shift gears and go down a rabbit hole a little bit further, the habits thing.
That’s so good, dude. Like, that’s so good. Like when you look at that, yeah. It’s like, you, you think I’m going to do this when like that’s always, that’s the mentality of everything, right? Like, I’m gonna be happy when I’m like, like, no, you gotta start now. And you just gotta start on a small scale. Right.
It’s sort of. You know, the, the, you know, whatever, like, I, I love that. I absolutely freaking love that so much. That’s so good. Yep. But you mentioned you’d rather own the tracks than own the train, which is shocking because the train one, I’m sure you’ve got. I’m sure you had lots of train sets growing up.
You strike me as the guy that had like the massive train sets grow up. anyways, he’s about like, forget what Elon’s doing. He gave away all the plans on how to build the electric car, but because his whole thing was to
[00:37:36] Karl: sell batteries. Wasn’t that? The battery? This is, this is it, but this is it. The car don’t go without the battery, man.
That’s the platform. It’s Ethereum versus Bitcoin. It’s it’s the blockchain yeah. Hundred percent. It’s it’s going deeper. The platform. Yeah. Well,
[00:37:52] Christian: and just think of that. Like, no, no, no. I’m gonna give you the plans on how to do all this, but you gotta come to me for the battery. Like it’s just genius level, right?
Like it’s insane. And I gotta that surprise, bro. Of all that lists decision fatigue. Didn’t make your list. I was expecting a, a Steve jobs reference or a Z, you know, you know, of always wearing the same thing. Listen, this is why you always just wear sweatpants. Like it’s the same deal. Like you are like the, is what you that’s cool.
Like. But decision fatigue is another one, right? Like not burning yourself out. You say walking by the TV and all that stuff, decision fatigue. I’m surprised that didn’t actually make
[00:38:36] Karl: your list quite honestly. Yeah. Look well once hundred, but also decision fatigue should come the framework that you need to make decisions that eliminate other decisions, right?
So you just gave a great example. Steve jobs were the same thing every day. Don’t just listen. It’s not about wearing the same thing every day. It’s that by deciding that he, he didn’t need to decide for the next decade of his life, what to wear in the morning, which allowed his, you know, to kill brain cells around inventing the iPhone and the iPad and etcetera, you know, the, you know, C decision.
Love it. Love it, love it. Yeah. Will it make the Bo go
[00:39:16] Christian: faster?
[00:39:17] Karl: Right. There you go. That’s
[00:39:18] Christian: it there. So cool, man. All right. Like we’re almost done an hour here. Holy smokes. Do you wanna close this out? What’s what’s I, I don’t even know why I’m asking one thing because there was like, I don’t know, like, I, I, but like if you had to pick what’s the one thing that you would suggest, would it be coming up with your own phrase of your, your equal to, will it make local faster?
Would that be.
[00:39:43] Karl: I I, a hundred percent, I think again, you know, and, and it can go on a personal level, right? Like I think maybe they should have, you know, like you could have one for your health, you could have one for your relationships and have one for your business. Right? Like again, does it, you know, is this gonna make me, if you ask the question, is this gonna make.
My future self healthier. You you’d probably stop going to Starbucks in the morning. Right? So that, by that, how that’s not gonna help your boat and your business go faster. So maybe just, you know, designing three of them might not be a bad place. Does like gross profit margin. Maybe that has a place in your question, like, will this.
My clients become more profitable. I, I don’t think that’s the right one, but you get it as a framework, as a question that’s, you know, visited on a regular basis. Makes a lot of sense. So I, what I road, Doug, what I do love is, you know, hearing like we’re talking about gross profit margins, and we’re trying to hammer that home.
And we’re starting to get questions in around that. And I’m certainly finding that. You know, I’m just seeing a lot more of it in and around us. And I think that’s really good. I wrote down, I would say that, but you know, the questions and You know? Yeah. That’s I think, I don’t know. I’m trying to like, I, I like the psychic example, which I might have gone a little bit left field, but gross profit margins. They gonna tell you if I’m, again, if I own the psychic business hundred percent, I don’t want a 250 unit of sale.
That just sounds like a horrific business. So actually how I got their road dog, which I might just reinforce this. You don’t need to monetize every client that comes with you. So if you did free psychic readings, let’s just assume you did 10, you did them for free, or you did them at a, at a loss or you did them significantly less expensive so that it was easier.
You wanna pour gasoline on your leg gen, which is the hardest function of any business, right. Generating and, you know, generating new clients, not just leads, but clients. So. If I did all of that for free let’s assume, and then I’m selling a $10,000 retreat where they’re gonna meet their loved ones. We’re gonna do some grief counseling, et cetera.
And so it’s really what you’d be selling as a personal develop. By the, if you didn’t, that unit are all 10,
you’d really stack of a, of things that you’re offer at that retreat. But not, everybody’s gonna say yes, probably three and 10, a 30% conversion would be seen to be pretty darn good. Maybe you get it to seven and maybe you fall to two, but I gotta tell you that when you do your math at the end of the year, my model will kick the crap out of the other model, generally, cuz you’re pouring gasoline on lead gen generation.
And then you’ve got the, you know, high unit of sale with high gross profit margins on the other end. Right? Cause I, I got no idea how much it’s gonna cost you to put on this weekend. But I gotta tell you, at $10,000 you get 10 people that are a hundred grand. There’s no way that it’s costing you a hundred.
You know what I mean? Your margins are gonna be sick, right? Like, they’re gonna be like, again, I’m gonna presume that you’re gonna be able to do the personal development, the, you know, the guided meditations and that sort of stuff. So you’re not gonna have to pay superstars to come in. Very anyways that’s and I, I.
So that’s, it’s just adjusting the
[00:42:56] Christian: business model shoots. I, I wanna chase that just for a second, just for one second. Yeah. And we’re gonna go a little and I apologize, but just that right there, right there, what you just said. So you need to reevaluate your business model and what, instead of viewing it as a money maker, view it as another opportunity to scream for the right people.
And my only question to you would be, would be this. So first off, And again, Carl, I think this is such an important question. If I had an ideal client, your ideal client, what would you give me? What would you pay me for that ideal client? Do, does anybody even know what the cost of their actual client acquisition is?
Because the, the whole point of having a, a front end offer and charging for it typically is to offset your advertising costs to acquire said ideal. But if you don’t know what the cost of your ideal client is, how can you ever right. Set a budget. So rather than looking at it, as I need to make $200 off of somebody to do this reading, I’m gonna do 10 of them for free.
And I’m gonna, now I’m going to invest $2,000 worth of my time, which you and I both know is not the actual number to acquire two to three ideal
[00:44:13] Karl: clients. Yep. RO can I just, I here’s, I believe this is Dan. We most people what is it find a customer here it
need to do is make a sale to get a. You get it. So think lifetime value, recurring, recurring repeat business equals profit. OK. If your clients aren’t buying repeatedly from you, you know, like this. So, so you get it. You wanna make a sale to get a customer. Let me, you wanna make a sale to get an ongoing customer.
Okay. As opposed to most people are trying to make a, like, you know get a customer to make a. Wrong. I, I hope everybody’s taking that away. That’s huge. You gotta be thinking recurring revenue, recurring sales, repeat sales. That’s where, yeah, the customer other stuff, the money, your bank account. Wrong way of seeing it.
So there you go. Yeah. So
[00:45:22] Christian: rather than the two sale up front, you sell it for 47, 20 $7 to cover your ad cost to pay for it. You’ve made the initial sale, you’re covering your costs. You’re now filtering through, you’re getting more perfect clients through and, and guess what you’re making the next sale, but only to the people and then
[00:45:39] Karl: wanna work with.
So, okay, now, and then I sell you so road, let’s just use road dog, right. But he comes and spends a tan Ryan to go to my retreat. Well, at the end of the retreat, my question is what’s the next thing. Right. Like, again, repeat sales, like you gotta be thinking, what’s the next thing. And, and then by the way, you’re like, oh my God, I can’t bring sales pitch.
It’s seeing it completely. Your clients. Are it completely, it’s an opportunity for Christian, you know, for road dog to build a closer and more unbelievable relationship. You know, the family member that passed away, you know what I mean? Like that’s what you’re doing for her or him, or, you know what I mean?
But you get it like, so, so you can’t see it, you just gotta build something. And that should like, right. That’s the Mediterranean. Because that’s where the dead, the, the relative, you know, would like to be. So I hope that’s making sense, but you gotta continue the relationship, right. You go, you know, from psychic reading to 10 and maybe the right is hundred thousand webinar live, and then it’s a 10,000 unit and then it’s a 50,000.
Right. Or, but thinking about that buying relationship and thinking about the, the journey. You take the customer on as opposed to making a sale, you know, getting them in touch with their loved one and saying goodbye, wrong approach. We’re doing a lot. We’re talking a lot about psychic
[00:47:09] Christian: youre, talking a lot about psychic today. And I just wanna say this one thing, and this is like, we’re totally rattling off now. It’s great. The thing is as business coaches, guess what these people are, they’re growth minded, get what do growth mind people do. They always look for the next thing. So if you can’t offer the next thing, guess what they’re gonna do.
They’re gonna go somewhere else to somebody else who can offer the next thing. So the same is true for your, for your clients. They need to be offering the next thing, because if they’re not, they’re gonna go to the next. So for you, it’s all about, Hey.
[00:47:48] Karl: Oh, oh,
here, here, psychic the retreat for cares about that. And their, you know, their relative who unfortunately is no longer with us who cares the most about that relationship. You were the one that brought Lucy and you know what I mean, your client together, right? So at the end of the $10,000 thing, the retreat, guess what your client’s gonna start looking for other ways to get closer to Lucy.
And then you’re not gonna have a thing. You’re not gonna have the next step. So guess what they’re gonna do. They’re gonna go buy from somebody else. Doesn’t have your level of, and level of commitment level of the one brought, right? So, so what I’m trying to say, justly, right? Is that like you have an obligation to build this journey.
You have an obligation to keep them with. Right. Like, that’s it like the end drop the mic that like,
[00:49:02] Christian: yeah, I, I love it. You know what? I’m really nervous right now when business coaching you’re psychics there and it’s be.
[00:49:16] Karl: You know, it’s happening, know it’s happening, stay
[00:49:20] Christian: tuned. We’re gonna be all live streaming from the event next year. It’s gonna be, it’s gonna be
[00:49:27] Karl: is what it’s gonna,
[00:49:32] Christian: you close this thing off for the week, boy. Oh boy. We could just keep going for hours upon hour. And you want, you guys wondered why. You know, like there’s no such thing as going for a beer with Carl. Like it just doesn’t happen. It’s typically because a, he doesn’t drink that much beer and he gets into the rum and you can’t just have one.
So there you go. All right, folks, thanks for tuning into another episode of business coaching secrets with the man on top of the hill, the king himself, king Carl, if you’re not on the inside and getting access to the pre-show or you aren’t getting those daily daily emails, which again, Are gonna trigger possibly, but also drop a ton of nuggets on you every single day.
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[00:50:36] Karl: Karl Bryan built profit acceleration software. 2.0 to train business coaches on how to find any small business owner more than $100,000 in 45 minutes without them spending an extra dollar on marketing or advertising. This becomes a business coach’s superpower.
So as a business coach, you’ll never, again, have to worry about working with the business that can’t afford your high end coaching fees. Check us out at focused.com.
Karl Bryan, creator of Profit Acceleration Software™
Karl is the Founder and Editor-in-Chief of The Six-Figure Coach Magazine and Chairman of Focused.com, home of the largest private community of Business Coaches (24 countries and counting) in the world. His goal is straightforward… to help serious coaches/consultants get more clients. Find out more at focused.com