Business Coaching

Ecommerce Profit Coaching - Formula Five

StomperNet and Paul Lemberg are launching their profit building and coaching program Formula Five at 3:00 pm Eastern (8:00 pm UK) on July 14 2009.

Formula Five

There has been some uncertainty about just where Formula Five fits in the market as Paul Lemberg is an internal renowned business coach and I understand that StomperNet are the world's largest Internet marketing training company.

I was lucky to be given a review copy of Formula Five at the time of the January 2009 first launch and I believe it to be the finest Ecommerce business and profit coaching program that I have seen or had any connection with.

What Is Ecommerce

My definition of ecommerce is fairly simple.

Selling products and services using electronic marketing methods like the Internet and email.

I general talk of two types of marketing:

• Search marketing - where prospects are searching for solutions and the Internet now dominates that type of marketing where your task is to be found.
   
  
• Outreach marketing - where you contact targeted prospects and encourage them to buy. Email is a great example of reaching out and getting people to move to your agenda.        

Ecommerce - Formula Five Home Base

Ecommerce is where the skills of Paul Lemberg and Stompernet fit best.

The business is complex, often employs staff and has a lot of different products and services.

An ecommerce business like that needs a premium profit coaching program and that is what Formula Five is.

The cost is much cheaper than working with a local business coach one to one and with a big opportunity and small cost, represents great value.

Formula Five Profit Building Blocks

Formula Five is based on five profit building blocks:

1. Margin magnifier
2. Sales stacker
   
3. Lead landslide
4. Conversion control
5. Turbo thruster  

In another blog I have contrasted how those compare with my own business improvement model, the Eight Pillars of Business Prosperity and other profit improvement models.

These are generic applications which can be applied to any business and that's exactly what Paul Lemberg has done with Formula Five.

The ideas behind Formula five can help any business to improve profit and not just ecommerce businesses.

And that's where some of the confusion has arisen over just who Formula Five will help.

Who Should Buy Formula Five

I am an affiliate for Formula Five so I will declare my vested interest. I profit if you buy through my link - Formula Five

If you are an ecommerce business and you want to improve profit, then buy Formula Five but with one proviso - you must be prepared to work through the training sessions and try things that it suggests. If you don't change what you do, you won't get the benefit.

If you sell a lot of information products on the Internet but don't physically ship products or supply services, then Formula Five will still be a good investment when you act on the ideas.

The stories from people responding to the free videos show that a simple price change can have a big effect on profit and Formula Five can give you confidence to push up prices or to add a premium product which makes your main product look better value.

If you promote your products or services on the Internet but you sell over the telephone or in person, then Formula Five can still be a big help. These profit techniques are universal and you will be able to use the ideas throughout your business. You just need a little imagination to take the ideas and transport them to your off-line business.

For other businesses, I would give Formula Five a miss.

You may still benefit from many of the tips but affiliate marketers aren't going to gain much, one product information marketers aren't likely to gain much and the more your selling moves away from the Internet, the more I think there are better products available for you.

I Have To Call It As I See It

I have tried to be very clear on who is best suited by Formula Five and again I return to the core market.

If you have an ecommerce business (100% or partly) then the material in Formula Five has the potential to have a huge impact on your business.

Formula Five (sales letter)

If you want more details I have written detailed reviews of Formula Five

Formula Five Review  (on my Online Profits blog)

Simpleology Business Coaching - Scalable Marketing Process

One of my favourite gurus Mark Joyner is set to launch a program that competes with me - the Simpleology Business Coaching program.

Simpleology Business Coaching Video 1

In this video which introduces the Simpleology Business Coaching program:

• Mark Joyner gives some details of his background and how his Construct Zero business will be concentrating on philanthropic activities around the world.
  
  Simpleology Business Coaching fits in because entrepreneurship is a great lever for lifting people out of poverty and into prosperity.
   
• Mark then introduces the two new men of Construct Zero and Simpleology, CEO Brad Semp and COO Dano Bennett - both with very impressive track records.
   
  
• In the video, Mark then gets into the meet and explains his concept called the Scalable Marketing Process

What Is The Scalable Marketing Process

Well apart from ruining my ability to spell the word scaleable (another British English vs American English inconsistency), the scalable marketing process has the ability to grow with your business success to create exponential growth.

Simpleology Business Coaching Video 1

More details about the scalable marketing process idea have been released in the second Simpleology Business coaching video

Simpleology Business Coaching Video 2

Although at first it does look as if you have clicked into the Dog Grooming cashmap but that is just to make the point that any system or process can be broken down into steps.

When you watch this second business coaching video, you will be invited to opt-in to the email list and you will be taken to another page which

1. Includes an example of a Scalable Marketing Process in the form of a cashmap style flow chart diagram.
    
   
2. You will be invited to take part in a competition using the Scalable Marketing Process and you can win lifetime membership of the Simpleology Business Coaching program or free twelve month membership so the prizes are well worth a little effort.

But you get the details when you opt-in after watching the second Simpleology Business Coaching video

Learn More About Simpleology Business Coaching

At this stage I have no idea of the numbers that will be able to go into the Simpleology coaching process so I recommend that you enter your name and email address to get more details.

I am tracking each step of the launch on my Simpleology blog (yes I am that much of a fan) so to get the full low down on everything I know about the Simpleology Business Coaching program click over to:

Simpleology Coaching 

Getting To Know Mark Joyner & Simpleology

I recommend that you pick up a copy of Mark Joyner's classic marketing book "The Irresistible Offer" which Simpleology are giving away free.

It is a great way to appreciate how Mark takes a complicated subject like marketing and strips it down to the basics. The book is packed with examples to show you that these ideas under-pin business success.   

Formula Five Cash Booster Videos - Free

To mark the re-launch of Paul Lemberg's business coaching program Formula Five (marketed with Internet marketing giants StomperNet) there will be a series of free Formula Five Cash Booster Videos.

Formula Five Cash Booster Videos

Paul Lemberg first launched Formula Five in January 2009 and it was a huge success.

In fact the content from the free videos was a huge success and the amazing stories appear on the StomperNet Blog.

If you have a business and you have any doubts about signing up or spending the time watching the videos, you need to read how many people had a big increase in profits implementing one or two tactics from the ideas that Paul Lemberg is sharing with you for free to promote Formula Five.

Formula Five Cash Boosters

What Do You Get In The Formula Five Cash Booster Videos?

If you are still in doubt about signing up, I thought you would appreciate the teaser content for what you can learn from each Cash Booster video.

Formula Five Cash Booster Video 1

In Part 1 of your "FormulaFive Unleashed" Cash Booster Series, Paul Lemberg will personally introduce you to the Fundamental Foundation to Your FormulaFive experience.

• 2/3rds of business will FAIL in the first 5 years.  Learn the 8 main reasons it happens so YOU won't be a statistic.

• There are FIVE Essentials to a sustainably successful business.  Get these RIGHT, and you'll be poised to take advantage of:...

• The Universal "Law of Compounding" - Discover how small changes in the 5 Essential Areas can accumulate and seemingly turn into multiplying bundles of extra profit...

Formula Five Cash Booster Video 2

As you'll see in Part 2 of your "FormulaFive Unleashed" Cash Booster Series, Paul Lemberg will show you how simple changes in pricing can be the difference between your business "doing okay" and being a "raging success".

Ask yourself: "Are you SURE you're charging what you're *worth*?"

Even if you're not sure (and almost no one without the Formula is) - it won't matter.

No matter what you're charging now, a few quick applications of the Formula can make you answer confidently "No - I can charge a lot more now."

And best of all, you can sleep well at night because we're talking about adding actual concrete value to your products, services, and offers.

Formula Five Cash Booster Video 3

Part 3 of the "FormulaFive Unleashed" Cash Booster Series is going to capitalize on your positioning in the following ways:

• Get more leads coming to you every day.  Premium Pricing Plus Steady Leads = More Money.

• Make More Offers to your customers.  Monetize your list by making sure that you're providing your prospects with every opportunity they may want to take to give you more cash.

• Truly *Satisfy* your old and new customers alike so that whenever they are ready to spend more, they know who can provide them the best value.  (That's YOU).

Formula Five Cash Booster Video 4

Part 4 of the "FormulaFive Unleashed" Cash Booster series will do something that you may never have thought possible.

Do you feel like creating your own business has not given you the freedom and satisfaction you'd hoped?

Does working on your business feel like just another J.O.B.?

Quit that right now.

Paul Lemberg will share his personal strategy for systematizing all the boring, hard work you need to do every day.

Once you've got a system, you can hire someone to do it.  They don't need to be a highly paid expert - they just need to follow the instructions.

Is Formula Five As Good As They Say?

Paul Lemberg and StomperNet have an excellent small business profit improvement product in Formula Five and whilst I have written extensive reviews of Formula Five and the modules, the best way is to try it for yourself.

Just sign up to receive the Formula Five Cash Booster video course and you will see for yourself how you can increase profit.

In January many were able to buy the full Formula Five training from the extra profits that they made from acting on a few of these free tips.

So sign up for the Formula Five Cash Boosters Video course.     

What Do Clients Want From A Coaching Program

It's a simple question with a wide range of answers "What do clients want from a coaching program?"

It is so easy to wear the expert hat and think "I know what potential coaching clients want", design a program and then discover that nobody wanted your version of the "better mousetrap".

I would certainly appreciate your thoughts on what clients want from a business coaching program - both in terms of process and result so please leave a comment and share your views.

Mark Joyner Is Asking The Question

Internet entrepreneur and marketing guru Mark Joyner (author of The Irresistible Offer and Mind Control Marketing and other books) is asking that question before the launch of the Simpleology coaching program.

On the Simpleology blog - Two Major Announcements (June 14 2009) Mark announced the intention to launch the Simpleology coaching program on July 1st 2009.

He doesn't give many details but does ask an interesting question

"If I could waive a magic wand and get the ultimate coaching program for changing my life and keeping me on track, it would look like _______." I was learning the A, B, C's...

The Answers: What Do Clients Want From Coaching

It is not a substitute for asking your own clients and prospects but to date there have been 308 comments so for any coach, I recommend that you take the time and read what is written.

I'd also recommend that you join Simpleology so you get to see the entire marketing campaign for the Simpleology coaching.

Here are some of the early highlights although you need to look at the Simpleology blog since different types of coaches will take different things from it

"Focus on practical steps to help me organize and attain goals."

"If you truly want to blow the minds of your clients - then offering a program that takes a client from idea to achieving the results agreed upon at the beginning of the program between the coach and the client - to be achieved NO MATTER what it takes."

"The actual program is flexible enough to be streamlined so that my strengths are fully utilised and the way forward to improve my weaknesses is found and simply implemented."

"People need a loving kick in the pants. They get excited about starting new programs and then resistance creeps in. Then they avoid coaching because it reminds them of what they know they should be doing, but don't want to be told about. The most important change happens WITHIN."

Your Thoughts

I will appreciate comments you make on this blog about what you would want from a coaching program.

In my experience, people want many different things and come to coaching with different expectations because the word covers such a broad range of activities.    

Business Problems: Diagnosing What Is Wrong

Business problems can stop you having the successful business you want for yourself, your family and for your employees.

The symptoms of the problem are usually very clear - one or more of:

• Few customers
   
  
• Low prices
   
  
• Losing money
   
  
• Unhappy workforce
   
  
• Frustrated entrepreneur

But can you fix the symptoms or do you need to fix the underlying problem?

It is much more effective to diagnose the business problem or the problems that are causing the visible symptoms? While the symptoms are obvious, the cause is often not so obvious.

This is why I love the cover of The Final Chapter by Rich Schefren.

 

Rich Schefren Formula For Success

Success equals

• Vision +
   
• Strengths +
   
• Passions +
   
  
• Resources +
   
  
• Alliance Partners +
   
  
• Powerful Tactics +
   
  
• Action Plan  

Put simply:

• You need to know where you are going
   
  
• You need to be playing to your strengths
   
  
• You need to have the passion to push through the difficult times with real commitment
   
  
• You need to have the resources - money, equipment and people - to do what you need to do
   
  
• You need to recognise that you are stronger working with partners than trying to do it on your own, to help you market and deliver your products and services
   
  
• You need to use powerful tactics to deliver your strategy for achieving your vision
   
  
• You need to coordinate everything happening with an action plan to make sure that everything that needs to happen does happen.

This makes a lot of sense to me and I find that it makes a great diagnosis tool.

Rich Schefren doesn't just give you the formula for business success but he gives you a business problem symptom sorter which is a very useful problem diagnostic tool.

Working Back From Symptom To Problem

If any of these success factors are missing, then business becomes more difficult because the missing element causes business problems.

The genius of the diagram is that it allows you to work back from the symptom to the problem so that you can see what is potentially missing.

Take a look at these business problems

• Confusion - you're not sure where the business is going or what you should be doing - this indicates that the key problem is that Vision is missing from your business. When you clarify your vision, the confusion will disappear.
   
  
• Anxiety - you are finding it very stressful working in your business and you are not getting the enjoyment you should - disappointing results and the clear evidence of an undiagnosed business problem will cause stress but it will be made worse if you are not playing to your strengths. Doing things that you are not good at causes difficulties and problems while things are easy when you work in your areas of strength.
   
  
• Unmotivated - you have a direction but the problem is, it doesn't stir you into action - this is because passion is missing. You have chosen a business or a vision which you thought would make you money but it doesn't excite you. If you can find the passion, for what the business does for you, your family or your customers, you will feel re-energised.
   
  
• Frustration - things are not happening as fast as you want or as well as you want. This can often be traced back to the problem that you and the business lack resources - perhaps it's money or you are trying to use unsuitable equipment or to get the wrong people who don't have the skills and aptitudes necessary to do the work.
   
  
• Limited Success - things are OK but the problem is you never seem to get to take-off speed and build the business you know you could. This is probably because you haven't established strong relationships with people and businesses who can help you while also gaining from your success.
   
  
• Sluggish Results - again things are OK but performance should be better. You have the partners in place but still things aren't happening because the underlying business problem is that you lack powerful tactics. You have opportunities to sell and upsell but you fail to take them.
   
  
• False Starts - things start off well but then problems start happening and you lose control. In this situation, you will find that better action plans, showing what will be done, when and by whom will lead to more concerted effort and longer lasting success.

Using The Business Problem Diagnosis

I like this problem analysis because it can work back from the symptom when so many business health checks dive straight into what is happening in the business.

Did you find yourself thinking that you suffer from more than one symptom of business problems?

That's what I have found when I have used these ideas with businesses that are not performing as well as their owners would like and often the entrepreneur will agree that things can be improved.

You can get a copy of the Final Chapter and a few other resources from Rich Schefren if you sign up at the Profit Vault. They are written to help Internet entrepreneurs and to promote an Internet coaching program called the Business Growth System

Solving these problems are important elements of my own Eight Pillars of Business Prosperity coaching model.

What Do You Think?

Has this analysis of business problems given you new insights and "Aha" moments?

If so I encourage you to leave a comment to share your thoughts and experiences.

Four Ways To Become A Coach

Have you ever considered becoming a coach or adding a coaching element to your business to help clients to deliver results?

As I see it there are four ways of becoming a "business coach" (let's think broad definitions rather than narrow):

1. You can be an unknown expert (i.e. you have high level technical skills but you don't have a well known reputation) and learn some coaching skills and go out and find clients. (Remember an expert is someone who knows more than the client - hopefully a lot more but coaching can work very successfully by adding common sense, focus and accountability to a business).
    
   
2. You can decide that you want to be a coach and go off and do the coaching certification courses but these organisations want to a) sell you on the idea of being a coach and b) sell you their training courses - and probably some ongoing subscription.
   
   In some ways certification is a nice idea but 1) it doesn't mean much to your potential clients - the only people who have ever asked me about certification are other coaches and 2) it diminishes any differentiation you have. The more you emphasise the adherence to strict coaching methodologies rather than personal inspiration and insight, the more you become a commodity, just like anyone else with the same certification.
   
   As a junior coach it also keeps you firmly in your place. If you aspire to being a Master Certified Coach (or whatever) then you are acknowledging that they are better than you. So unless you are much, much cheaper, you are sending the potential clients a very mixed message - use me I am good, I use a standard methodology but I'm not as good as those other people.
    
   
3. You can coach under a major brand as a franchisee or licensee. If you want to be a business coach, you may have looked at the Action Coach franchise or some of the others. I did the Guerrilla Marketing Coaching Course because I thought the value was outstanding, Jay Abraham has just re-introduced his protege training and in the Internet niche, Jeff Walker has announced he will be creating certified Product Launch Managers (these last two are more consultants than coaches.)
     
   
4. You can become an acknowledged, widely recognised expert and have prospective clients virtually begging you for the opportunity to be coached by you.

Which Route Do You Want To Go?

I started on route 1 - I had a very good reputation in my own little circle but the circle was very small and beyond that, no one knew me or my ideas on business development.

Route 2 never appealed to me. I have looked at courses from time to time but they tend to come from a life coaching approach - where I think certification is useful since there is little else to hang your hat on - but they weren't for me. My business coaching style is too direct and whenever I have delved into the life coaching literature it all seems very worthy but wishy-washy to me.

Route 3 I have dabbled with but the franchises are expensive - and not guaranteed to succeed as I have heard a number of tales of woe - and I have never wanted to lose my own identity. The beauty of being self employed is that you can create something special and unique.  

I believe route 4 is the best way to go and now that I am older and wiser - and linked into the Internet marketing world - it is fascinating to see coaching programs being added on as the highest level upsell.

It is also the route promoted by marketing great Dan Kennedy who I have been paying a lot of attention to this year. He has helped a large number of his clients become very respected and high earning coaches in niche markets like restaurants, chiropractors, dentists, mortgage brokers etc.

But you have to become an acknowledged expert so you need to have information products out there in the market to establish your expertise - books, audios, video training.

The PR push you can get from going through a big launch with plenty of joint venture partners is tremendous. Look at what Formula Five did for Paul Lemberg, even though he already had a great reputation. Even Jay Abraham uses the JV promotion method as he is on his latest book The Sticking Point Solution

The Challenge Is How To Be Acknowledges As The Expert

Most coaches go the reverse way - they coach clients and then think about developing information products as a way to escape the "time for money" trap.

That's where I am.

But if you think about it, an information product establishes your reputation so that you are seen as the expert and that makes it much easier to get clients because, no matter how clearly you lay out what needs to be done, some people always want more.

If you agree with the logic and want to develop your own information products, this course looks to be extremely comprehensive.

Guru Home Study from Eben Pagan - he has built a $25 million per year information business - originally in the dating and relationship niche and then the make money niche - and this course will teach you how to create and sell information products but it will only be available for a few days.

After that it will be off the market - probably for 6 to 12 months to help build up anticipation.

What Do You Think About The Four Ways To Become A Coach? 

If you are a coach or you would like to become a coach, what do you think about the four ways you can do it?

Which route did you take and with the benefit of hindsight, would you take a different route now?

Let me know by leaving a comment.

DIY Business Coaching: Can You Be Your Own Business Coach

A DIY Guide To Business Coaching: How to Build Up Your Business Skills, Accountability, Commitment And Success On A Low Cost Diet Of Business Advice

I had one of those phone calls again. A small business owner - let's call him John - who needs business advice but can't afford an orthodox business coaching arrangement.

I always feel bad when I get these - as if money is all that matters and if the struggling business owner doesn't have the cash, then I'm not prepared to help.

And I don't like feeling bad although I have learned that the people who don't pay the normal rate for coaching and advice but get it for free or at a discount, don't respond as well and don't take as much action as those who pay.

There is this link between price and perceived value. If business advice is free it is not considered to be as valuable as advice that costs money - even if the same things are said.  

What Can You Get From A Business Coach?

Clients contact a business coach looking for solutions to problems they have in the business or for help taking advantage of opportunities.

Clients want:

1. Guidance and advice
    
   
2. Accountability
    
   
3. Feedback
    
   
4. Recognition
    
   
5. To be listened to - sometimes there is no one who the business owner can talk to in detail about the business.

It is difficult to do all those things on a DIY business coaching basis.

Accountability to Actions

One of the biggest problems about being your own boss is that you don't have anyone but you to hold you accountable for your results and how you have achieved those results.

A business coach will do that as part of the business coaching process. You agree actions in one telephone call and meeting and you know that your coach will ask for progress and if you take it seriously, you won't want to be seen as having done little about the things you agreed were most important.

So if you are on a DIY business coaching path, you need to be able to hold yourself accountable.

You need to be able to set goals, identify the actions which will move you to the goals, set deadlines and priorities, take action and challenge what you've done or not done.

That's not easy.

I am very impressed with the free Simpleology 101 time management course and software program (read Simpleology 101 review or take a free membership of Simpleology and try for yourself - trust me to sign up - the webpage doesn't sell the benefits of membership very well).

Understand and use Simpleology 101 and move on to the Simpleology 102 course about money and you will go along way to keeping yourself focused and accountable in your DIY Business Coaching.

When I told my email list about Simpleology 101, this is one of the comments I got back

"The content of your emails are usually great but this surpasses most.

I don't know why you do this for free but I do want you to know that I am grateful for your work and appreciate the obvious time you put into this - please keep it coming"

Thanks Dean. The course is quality so trust me and open your Simpleology account. It is free. 

Feedback

You can get feedback from your business coach during a project - perhaps writing a sales letter or designing an advert - or you can wait for the results.

The only feedback that really matters beyond the feelgood factor and reassurance is the results so if you are working on your own, you need to give your self-confidence a boost by reflecting on your past successes. Then try a little test and see what the market says.

If the results are good, you have the feedback to try a larger test. If the results are bad, you have the chance to reflect on why things are not working as you expected.

If you can't afford a business coach to give you professional feedback, and you can't find an older family member or an experienced friend to act as an unpaid mentor, try to buddy up with another business owner and give each other ideas. It is best if you buy each other's products since you both have the chance to "play the customer" for the business and their competitors.

But in the end, results will give you all the feedback you need if you have a proper performance measurement system in place.

This buddy can also help with the recognition of a job well done and someone to listen to you talk about your business. I had one client, a very capable executive who just liked to talk to me and he solved his own problems as he talked and outlined the options and the advantages and disadvantages of each.

Guidance And Advice

We live in the Information Age and there is no shortage of advice so your problems becomes one of finding the good from the bad.

First I think you need an overall business improvement model to help you to see your business through fresh eyes.

I am totally biased but I haven't seen anything better than my Eight Pillars of Business Prosperity . I recommend that you sign up for my email newsletter to help you to focus on improving each of the pillars.

I explain more on my squidoo lens - How To Increase Business Profitability - and it includes an interesting survey on which Pillar presents the most problems. I think you will probably be surprised at which is in the lead.

Finding The Right Gurus To Follow

This is tricky. As I said earlier there is so much advice out there so it is good to find a few people to follow. I wear my influences on my sleeve since I believe it is helpful for you to have the opportunity to go back to the originators of the ideas.

When you join my email newsletter I will be recommending resources at each stage.

However integrating advice from different sources isn't easy.

Two comprehensive programs I recommend are Scott Hallman's Small Business Growth Club and Paul Lemberg's Formula Five but both are premium priced and may cost more than you are willing to pay but are much lower cost than one-to-one coaching.

After you have joined Simpleology (remember the time management training I mentioned above) you will see that there are a number of excellent smaller courses based around Mark Joyner's books - The Irresistible Offer and The Great Formula. Both have the great strength of taking a complex situation and simplifying it.

Also from Simpleology, the growing number of best practice cashmaps are an invaluable guide to help you to implement winning strategies and tactics by providing clear, precise guidance.

Can Do - Will Do - Have Done

I have a bugbear - that training and advice is wasted if it doesn't turn into action. These cashmaps help you to take action by making it clear what you need to be doing and in what order.

My aim is to help you to improve profit and profit only comes from purposeful action on realistic opportunities.

I could recommend more but you will get more details when you sign up to my email list.

The key to success is to move you through the Can Do (training and advice) stage to the Will Do (commitment and accountability) stage to the Have Done stage where you can see the better results for yourself.

What Would You Do If You Retired Or Won The Lottery?

I am in a reflective mood today and whilst it may be a strange question to ask when you are working harder than ever to fight off the recession, but "What would you do if you retired?"

Some entrepreneurs and managers will find that they have more time on their hands than they want if their businesses fails and may find themselves asking;

• What is my life all about?
   
  
• What do I want to achieve?
  

But others are likely to burn themselves into the ground with the massive stress of "saving their business" when, apart from economic necessity, the business damages rather than adds to their lives.

The reward for their hard work and initiative - the continuation of living a life they don't want.

Businesses Build A Life Of Their Own

Businesses have a nasty habit of shooting off in all kinds of directions as you chase opportunities which you wouldn't choose if you were to start again.

I know. I had it happen to me.

My business was overwhelmed with the type of work I didn't want.

I was good at it, the work paid very well, there was plenty of demand - but I hated it.

I got out but what about you?

So What Would You Do In Retirement?

I can't imagine losing my interest in business and in particular, what makes a business work better.

I can see myself continuing to work with a few clients for as long as anyone is interested to read or listen to my ideas.

I would travel more. There is still much of the world I want to see and so many places I want to go back to but I make sure that we have good holidays every year anyway.

And there are many other things that I would like to do but I don't have the time.

But what about you?

What are you postponing until you retire?

Even more importantly, what is work stopping you from doing now, that you will never have the opportunity to do again?

Spending more time with your children is the obvious answer if you have any. You will never see their formative years again.

Your Life...Your Business

Reading Michael Gerber's book "The E Myth Revisited" was a revelation to me when I found him explaining that the main purpose of your business is to serve you - and not the other way around.

Your business needs to be designed to give you the life you want so you live your life purposefully and not as is often the case, your personal life is whatever time your business leaves behind.

Michael Gerber wrote about the importance of knowing your Primary Aim.

It's an unusual question but one well worth answering as the first step in getting your business back in its box and under control.

It can stop you pouring your energies into saving a business you don't want to save.

Or conversely it may make you realise just how much your business means to you and the central purpose of your life.

So How Do You Find Your Primary Aim?

To find your purpose - aside from earning enough money to live now and in the future - you need to put yourself in a place where the obligation to work no longer exists.

So what would you do if you could retire tomorrow?

What would you do if you won the lottery and you never had to worry about money, ever again?

When you know the answers you can then turn your attention to the next important question.

How Can You Make Your Business Support Your Primary Aim?

Is your business a fundamental part of what you live for?

Or does your business exist to give you the money necessary to follow your passions elsewhere?   

Profit Improvement Models & Methods : Comparison

As Formula Five is receiving so much promotion and attention at the moment, I decided to assess the methodology underlying Formula Five and compare it with other profit improvement models and business coaching frameworks.

Eureka Moment - So That's How You Make Profit

There are no qualifications to be an entrepreneur.

No one teaches you how a business makes a profit and how you can manage for profit improvements.

So when you first meet a profit improvement model or framework, you may experience a Eureka moment that could have Archimedes jumping out of his bath again. You have a process which makes sense of your business and a framework that ties all your actions everything together in a way to improve profit.

Most Accountants Don't Teach Profit Improvement Methods

Although accountants are regarded by many as the most trusted adviser to small businesses, it is unfortunate that many accountants don't help small businesses to understand how to make profit.

All the jargon and the complicated accounting rules and regulations can even disguise the fundamental economic, profit making model of a business, making it more difficult for the entrepreneur to understand how to improve profit.

Formula Five Framework & Marketing

The Formula Five marketing is creating a lot of buzz at the moment. (see the Cash Boosters Video course)

It has presented an overall framework for profit improvement with five key components shown below and then takes you through some number examples to show you how, even small changes in the underlying profit drivers can have such a big effect on your profits.

The Formula Five path to profit is:

1. Margin Multiplier - increase your gross margin through price increases and communicating value more effectively.
    
   
2. Sales Stackers - how to sell more to existing customers
    
   
3. Lead Landslide - how to attract more prospective customers
    
   
4. Conversion Control - how to convert more leads into customers
   
   
5. Turbo Thruster - how to improve productivity and effectiveness   

Formula Five sounds exactly what it is - a good logical framework for increasing the profit of a business.

Small Changes Create A Compound Profit Improvement

The idea is that, if you can find an extra 15% profit improvement in each Formula Five area, then because everything is interlinked, these fifteen percent improvements compound to double your profit.

Try Profit Improvement Compounding For Yourself

I have prepared a little spreadsheet which lets you enter your current profit and you can see what it could be after Formula Five's standard compounding assumption of 15% together with a more optimistic 25% increase and a more pessimistic 10%.

I have also given you the facility to set your own percentage improvement so you can see the impact on profit of changing all five factors by 12% say or by changing the margin multiplier by 5%, the sales stackers by 25% etc.

This gives you more chance to estimate the profit potential in your business based on your estimates before you begin testing.

Download Profit_compounding

But lets take a step back from Formula Five and have a look at the two fundamental profit improvement models Formula Five is based on.

The Accountants Model - Cost / Volume / Profit (also known as the Break Even Model)

I am not going to get too technical here so hang in:

Contribution (or Gross Margin) per unit = Selling Price minus Variable Cost of Goods (or Services) Sold

So if we sell an item for £15 which we buy for £8 and it costs £1 for shipping we have

Selling Price per unit = £15

Variable Cost per unit = £8 plus £1 (since neither cost is necessary if we don't make a sale)

Contribution per unit  = £6 = (15-9)

So every unit we sell makes a contribution of £6 to our fixed costs (overheads or SG&A).

Fixed costs are expenses like salaries, rent, telephone, accountancy fees etc - they don't change as a result of us selling more.

So if fixed costs are £6000 per month, then we need to sell 1,000 units to break even. (Fixed costs of £6,000 divided by £6 contribution per unit)

This gives the accounting rules for increasing profit:

1. Sell more - the more £6 we get in my example, the more money we make
    
   
2. Increase the selling price - so if the selling price increases by £1 to £16 and nothing else changes, we now have a contribution per unit sold of £7.
    
   
3. Reduce the variable cost - again if nothing else changes, this will increase the contribution per unit.
    
   
4. Reduce the fixed costs

If in the original example, we sold 1,000 units we would break even, if we sell 1,200 units at a contribution of £7 and our fixed costs are reduced to £5,500 then the profit is:

Contribution of (1200 * 7) = 8400
Less fixed costs of 5,500

Profit has increased to £2,900 per month - much better.

So your accountant will tell you that the way to increase prices is to sell more, increase your prices and to reduce your costs.

Of course, there are some limitations to the model. Fixed costs don't stay fixed across all volumes but it gives you a good model for evaluating incremental change.

Fine in theory but how do you sell more and increase your prices?

Which is why we move on to...

Jay Abraham's Three Ways To Grow A Business Model

Jay Abraham is probably the most famous (and highest paid) marketing expert and profit optimiser in the world and he looked at sales in a different way.

In his famous three ways to grow a business, Jay separated sales into three components:

1. The number of customers
    
   
2. The average amount they buy in a transaction
    
   
3. The number of times they before each year

Very simple but it helped people to focus on:

1. How to have more customers - a common preoccupation anyway but your customers next year equals the number you have at the moment minus the number you will lose plus the number you will gain, which depended on the number of new prospects you attracted and the proportion you converted into customers.
    
   
2. How to increase the value that a customer spends
    
   
3. How to persuade/encourage the customer to buy more often.

In good times, this focus on increasing sales usually leads to increased profits but I was always taught to look beyond sales and that the contribution or gross margin was the real revenue for the business.

In fact in the UK, where sales is often called turnover we have a saying "Turnover is vanity, profit is sanity, cash is reality."

So I adapted Jay Abraham's model (published in How To Increase Profit) and changed the sales value of the transaction to profit so that changes in contribution can be tracked. I then deducted the fourth component of profit, your fixed costs (overheads, SG&A) to make sure profit increased.

Back To Formula Five

Can you see how the Formula Five is derived from these two profit improvement models?

We have the Margin Multiplier from the accountants model and Sales Stackers, Lead Landslide and Conversion Control based on Jay Abraham's model.

The final formula, Turbo Thrusters, is really reverting back to the accountants model to answer the question "how do we increase productivity, efficiency and effectiveness?"

This derivation doesn't invalidate Formula Five at all in my view as the two models that have stood the test of time and are arithmetically correct.

So How Does Formula Five Compare To Other Profit Improvement Frameworks?

Before looking at the profit improvement frameworks from Action Coach, E Myth and Scott Hallman which are probably the main worldwide rivals, indulge me while I explain my own approaches and compare it to Formula Five.

I will also look at Rich Schefren's Business Growth System as that was the first major coaching program targeted at Internet based businesses.

The Eight Pillars Of Business Prosperity

This is my own model for business and profit improvement based on:

1. Your key numbers - how you measure, improve, learn and manage for profit and cash
    
   
2. Your vision for the business and how you translate that into your own priorities and actions
    
   
3. Your market position and how you differentiate yourself from your competitors
    
   
4. Generating leads
    
   
5. Converting leads into first time customers
    
   
6. Creating repeat customers who buy from you regularly and refer your business to others
    
   
7. Leading your team - working with employees, outsourced subcontractors, suppliers and joint venture partners
    
   
8. Systemising your business so that it works reliably, predictably and at low cost.
   

Eight Pillars vs Formula Five

When you compare this with Formula Five, you can see some common themes.

While I like to get my measurements in place upfront, Formula Five introduces the key measures into each module. Just a difference in emphasis but I like to be very clear about the baseline performance across the entire business.

The entire principle of compounding is that everything is linked together in a complex system so I prefer to identify the business model upfront and have all the profit improvement drivers identified as measures at the beginning.

That way, both the client and I know, whether actions are creating profit improvement.

Then you can see how my market positioning matches up with Formula Five's Margin Multiplier as that is based on establishing an improved value proposition and how do you position yourself - based on the benefits and outcomes you deliver and the price you charge.

Leads, conversions and creating repeat customers match up like for like.

That leads three areas to be covered by Turbo Thrusters - vision to time priorities, leading your team and systemising your business.

I don't have a product to sell, so the only way you can access my Eight Pillars coaching is through one to one coaching and group coaching for UK clients.

Hidden Profit Coaching

However one thing that I have learnt, and rectified with my Hidden Profits coaching, is that you can try to cover too much, too quickly so it delays action.

In my Hidden Profit Coaching I concentrate on one subject - referrals, upsells, bundling etc - and help clients sharpen up performance and increase profits there before moving on to the next stage.

This is something you need to watch with Formula Five because you can be overwhelmed with ideas when you look at each module and there is a danger of mental overload. That's why Paul Lemberg is encouraging you to pick low hanging fruit so that you take action before moving into the next main Formula.

Action Coach And The Business Chassis

Action Coach are the world's largest firm of business coaches and a franchise, founded by entrepreneur Brad Sugars.

He has explained the Action Coach approach based around the Business Chassis in at least two books - The Business Coach and Instant Cashflow (links take you to my book reviews) and you will immediately see similarities with Formula Five.

The Action Coach Business Chassis focuses on five main drivers of profit improvement:

1. Number of leads
    
   
2. Percentage converted
   
   
3. Average sales value
    
   
4. Number of times a customer buys
    
   
5. Profit margin
   

And it works like this:

Leads x Conversion rate = Customers

Customers x Number of Transactions x Average Sales Value = Revenue

Revenue x Profit Margin = Profit

I am sure you can see the similarities with Jay Abraham's three ways to grow a business model.

Arithmetically I have some concerns with Action Coach's Business Chassis but, as I have just read the Brad Sugars books, it may be my understanding.

You see in many businesses, leads x customer conversions don't equal total customers, it equals new customers which needs to be added to customers you had before less any you have lost.

Second, the profit margin doesn't handle the difference between fixed and variable costs and that difference is key.

In addition to working with the Business Chassis, Action Coach focus on team development and systemisation of your business.
 
Action Coach Business Chassis v Formula Five

There is the same focus in the Business Chassis as Formula Five on attracting leads, converting leads into customers, selling more to those customers and increasing profit margins.

If you want to know more about Action Coach's approach, Instant Cashflow is the better book by far as it gives outline guidance on 282 ways to improve one profit driver or another.

From what I have seen and heard, Action Coach charge a premium price for their business coaching delivered through their franchisees, many of whom have come from sales backgrounds.   

E Myth Mastery

I know more about the main E Myth business coaching / profit improvement program as I have bought the first two sets of modules 1 to 7 and 8 to 14 which covers getting control of your business and growing it. Both provide big opportunities for profit improvement.

Michael Gerber is very much one of the founders of the small business coaching industry, and in his own way has been just as influential as Jay Abraham on me and other coaches.

E Myth have built in a bit more flexibility in their approach since I bought my modules but the program is still based on what Michael Gerber defined as the Seven Centers of Management Attention:

1. Leadership - developing your vision for the business
    
   
2. Marketing - understanding your best customers
    
   
3. Money - manage your cash flow and profit
    
   
4. Management - bring together the right team
    
   
5. Lead generation
    
   
6. Lead conversion
    
   
7. Client fulfilment
   

So again you can see the common themes with Formula Five but the content is very different.

When I looked at the E Myth Mastery system, I saw it as the slow way to business and profit improvement. It is based very much on correcting the foundations first before reaching out to the market. A good approach if you can afford to wait for these improvements to take effect.

Of all the frameworks I have seen, the E Myth approach is the one that is the least influenced by Jay Abraham, and as the author of the new Jay Abraham Addict blog, I see that as a weakness.

E Myth coaching used to be delivered by independent certified E Myth coaches but I have been told that it has been brought in house.

Michael Gerber's mission was to create the "McDonald's of small business consulting" by designing  a system so strong that it can be operated by less expensive staff, it is very competitively priced but people write to me with stories of inexperienced coaches who can't move away from the system.

Scott Hallman Small Business Growth Club

When I bought membership into Scott Hallman's Small Business Growth Club, it was a complete revelation to me and I can't stop raving about it.

It forced me to stop and consider exactly what I was bringing to my clients over and above ideas, training and some "how to's" and this is my favourite third party business development  and profit improvement program.

Like me, Scott is influenced by Jay Abraham, Michael Gerber and Jay Levinson (Guerrilla Marketing) but before he became one of the world's leading business coaches, he was a hugely successful entrepreneur.

Scott has taken Jay Abraham's ideas and turned them into detailed, step by step systems for easy, effective and quick implementation.

The Small Business Growth Club is based around the original Power of One product which has twelve very tightly scripted and focused modules which has been extended by recordings of teleseminar / coaching sessions between Scott and his business coaching clients.

The core is still in the Power of One sessions:

1. The Power of ONE - The Ultimate Business Growth System™
    
   
2. How to Effortlessly Get 30% of Your Customers to Dramatically Increase their Average Purchase (and your profits as well)
    
   
3. Condition Your Customers to Purchase 20% More Often,  While Keeping Them Loyal to Your Business
    
   
4. Start to Finish Total Customer Satisfaction -  Ten Opportunities to Increase Customers Retention by 50% or More
    
   
5. How to Create 'Active' Referral Systems to Double or Triple Your Referrals Effortlessly
    
   
6. How to Increase Revenue 10%-50% by Providing Your Customers with a Continuous Stream of Products and Services They Need and Want
    
   
7. The Power of Strategic Endorsement™ — How to Double Your Sales Force Without Spending a Dime
    
   
8. Reduce Your Cost of Acquiring New Customers by 50%-80% Through the Use of a Laser Marketing System™
    
   
9. How to Use The Power of Compelling Incentives to Lure Your Prospects Away From Your Competitors
    
   
10. How to Package Synergistic Products/Services to Increase Profits 25%-30%
     
    
11. Creating Competitive Advantages to Differentiate You from Your Competitors
     
    
12. Creating a Compelling Competitive Advantage to Make Your Business the Logical Choice 

But the extra sessions have broadened the scope and impact of the Small Business Growth Club so that it is organised in three different streams depending on where you need to prioritise:

1. Generate new business
    
   
2. Manage / implement
    
   
3. Optimize profits

In addition the Small Business Growth Club platinum version offers the Mega Marketing training from Chet Holmes, another leading business growth expert I admire.

Small Business Growth Club vs Formula Five

You again have the focus on your value proposition which Scott refers to as crafting your compelling competitive advantage, developing sales with existing customers, attracting new prospects with the laser marketing system, referrals and strategic endorsements and systemising your business and managing your time.

Where the gold membership of the Small Business Growth Club would fall down in comparison with Formula Five is that Scott Hallman doesn't focus on the sales training / lead conversion areas but that is where the Chet Holmes material makes this package so compelling in the Platinum version.

Both programs are packed with ideas and tips but the scope of Formula Five is wider but the Small Business Growth Club goes into more depth and essentially also provides much more detail on how to implement.

It may seem strange but I think that because they are both inspired by Jay Abraham and Michael Gerber, they actually complement each other. I can imagine someone buying both and zig-zagging as they introduce simple programs (Formula Five), see they work and want to enhance that area (SBGC) and then move onto another area (Formula Five).

Does that make sense?

It replicates what a client would do in one to one coaching with me.

I'll explain the basic concepts and we will design a simple trial program to test and hopefully provide quick wins and then we will a) improve the program and extend it to more customers and products before moving on to another quick win.

Other Profit Improvement Models

From the offline world I could add a comparison with the Accelerated Business Growth System from Peter Thomson, regarded as the UK's leading growth specialist and Mitch Axelrod, (responsible for creating $2 billions of extra sales) with his New Game of Selling but this article is already very long.

I see both as particularly strong in the sales training / converting leads into sales.

I should also mention Guerrilla Marketing as Jay Conrad Levinson is another founding father of the small business marketing/coaching industry.

Guerrilla Marketing does not have a big conceptual framework but is a mindset and a collection of techniques and tactics. It is focused on a few core principles:

1. Marketing is everything you do in your business
    
   
2. Focus on profit not sales
    
   
3. The profit is in the ongoing relationship with your customers
    
   
4. You must build an assortment of lead generation sources.

But Guerrilla Marketing does help you get your marketing mindset right, develop the right marketing message and use multiple marketing media.

However as Former Five is being marketed through and to Internet marketers through StomperNet I do want to contrast it with Rich Schefren's Business Growth System coaching.

Rich Schefren Business Growth Club Coaching

I went through this program in 2007 since Rich Schefren was building a big reputation and I was becoming increasingly interested in Internet marketing. Again this was a revelation since it showed me just what can be delivered to the mass market and over the Internet on a very cost effective basis.

The Business Growth Coaching program is an eleven or twelve module course (I have never seen the mystery module 12) so I am excluding it from this list:

1. Finding the real entrepreneur in you
    
   
2. Developing and using the right capabilities
    
   
3. Marketing - finding your unique position
    
   
4. How to create a mafia offer by offering a unique value proposition
    
   
5. The most powerful marketing strategies - adjusting your back ending marketing to your customers' behaviours
    
   
6. How to overcome your constraints
    
   
7. How to measure your business performance
    
   
8. How to systemise your business so it is on autopilot
    
   
9. How to manage projects
    
   
10. How to build your team
     
    
11. How to bring everything together and manage your time

Looking at my notes, I had forgotten how good the Business Growth System was although it does have an element of Internet only advice. I must go through it again.

Once again you can see similar issues come up as in Formula Five with the development of your value proposition, attracting and converting buyers, developing your back end and then making it all happen.

Like the E Myth Mastery, the Business Growth System is about getting the fundamentals right and won't give you the quick wins that Formula Five will.

Summary of Profit Improvement Models

I don't know anyone else who has studied the various models of profit improvement as comprehensively as I have.

I have tried to show you that there are differences in approach but also similarities on which all business success is based, whether offline or online.

Some approaches go for immediate profit impact - the Small Business Growth Club, my Hidden Profit Coaching, the Action Coach Business Chassis and Formula Five - while others make sure the fundamentals are right - E Myth, Business Growth System.

You also have the one-to-one coaching and group coaching provided by Action Coach, E Myth and me contrasting with the delivered by computer but little or no individual attention of the Small Business Growth Club and the Business Growth System.

I am not yet sure whether Formula Five will have a personal coaching option as an upsell. I wouldn't be surprised if it did.

Price Positioning

1. Jay Abraham - I am not sure if he still takes private clients but the last I heard he was charging $5,000 per hour (minimum two hours) for a telephone consultation - but when you are at the top you can charge these high rates.
    
   
2. Superstar coaches - Scott Hallman does still work with personal clients although they pay $1,250 an hour and I believe Paul Lemberg takes one-to-one clients
    
   
3. Good business coaches - experienced, knowledgeable, passionate and committed. This will include the best of the franchise coaches as well as independents like me.
    
   
4. E Myth coaching - proven system but delivered by more junior coaches who know the system.
    
   
5. Internet delivered programs or shipped products - Small Business Growth System, Formula Five, Accelerated Business Growth System
    
   
6. Short courses although the cost can vary from about level 3 down.
      
   
7. Shorter audio/video business training programs.
    
   
8. Books and ebooks

There is no shortage of business advice in the market so it is a question of finding the right advice for you.

Benefits Of Personal Coaching

As soon as you start involving people, costs shoot up but there are major advantages to personal coaching:

1. You have someone to hold you accountable - difficult to do yourself
    
   
2. It focuses your mind - you make a commitment to someone else and you don't want to be seen as slacking or a non-achiever
    
   
3. You get customised advice. The more special your business or situation, the more you need to adapt away from the standard.
    
   
4. You get feedback. You may think an idea is great, someone else may see obvious flaws or not be so convinced about your compelling offer.
    
   
5. You get help if you are struggling to understand something. We all learn in different ways and at different rates.
    
   
6. Because you pay more, you are more willing to take action. I know it sounds crazy. A great idea is a great idea but if you are paying Jay Abraham £5,000 per hour and he says "You should ..." you are going to take notice. It's the same with Scott Hallman and Paul Lemberg. But if a friend comes up with the same idea in a bar, are you really going to implement with the same intensity?   
   

I believe in action and you have to find your best route to taking purposeful action to increasing your profits. That may be working with a business coach, one-to-one or it may be enough to buy one or more of the excellent packages available.

Your Catalyst To Success

It's not enough to know, you have to do so what will it take to move you into action.

What will be your catalyst to success?

What will give you the ideas to improve your business and the commitment and determination to take action?

Do you need the personal accountability that coaching provides, the "done for you" services of a consultant or can you take your ideas from the most successful, "superstar" business advisers. 

Check out the Small Business Growth Club and Formula Five.

Which is best?

I haven't finished working through Formula Five and I don't know how much it will cost.

I'm just glad I have them both.

Like this article? Then follow me on Twitter

Paul Lemberg Formula Five or Formula 5

Paul Lemberg is famous in the business coaching world for creating Quantum Business Coaching, (now called Axcelus) and is also the author of a number of business improvement books.

In collaboration with Internet training company StomperNet he is bringing to the market a new business development/profit improvement program - Formula Five.

This blog was originally written about the January 2009 launch of Formula Five but it has been announced that it is being re-released in July 2009 and promoted with the Cash Booster Video Series.  

The Formula Five slogan is "The system is brilliant so you don't have to be" and Paul Lemberg is famous for systematising the business development process.

The launch starts with a free 73 minute video of Paul Lemberg introducing Formula Five. It is excellent and packed with ideas.

Paul Lemberg Formula Five - just sign up for the video over on the right hand side of the page. If you would prefer to read, you can get the transcript for this video and the two Stompernet Formula Five promotions - Formula Five PDF

Here is the promotional email copy for this first Paul Lemberg Formula Five video written for Internet marketers which is why it emphasises StomperNet and Andy Jenkins who have huge reputations in that area.

Subject: 62% of you are going out of business

That's a REAL statistic from the Small Business Association.  

62.8% (to be exact) of businesses will fail.

Kind of depressing.  Vegas has better odds.

All business owners should watch this video right now.

Paul Lemberg Formula Five - Formula 5 PDF

That's from Andy Jenkins and the StomperNet guys, and he's doing a little math.  WHAT?!  Math!?  I know, but all you have to do is pay attention.

Even in this recession, some businesses are going to step up and grow.  They're going to expand their customer bases AND increase profits.

How are they going to do it?

Simple - watch the video.  They are going to follow a PROVEN Formula for success.  This formula has been honed over 15 years by Paul Lemberg, one of the most respected (and expensive) business consultants around.  But you get his expertise today for FREE.  And get this...

It works on 93% of ALL businesses that try it.

Go watch this video right now.  You won't regret it.

Paul Lemberg Formula Five - Formula 5 PDF

Once you do, odds are your 2009 will be looking VERY good.

YOUR NAME

P.S. Seriously, with just this video, you'll be taking pages of notes and can actually start making MORE money today.  Don't forget to opt-in and get to download a FULL presentation on this secret formula delivered by Paul Lemberg himself.

Paul Lemberg Formula Five - Formula 5 PDF

My Thoughts On The Andy Jenkins Formula Five Email And Video

I would have preferred less of a play on the FUD factors - fear, uncertainty and doubt.

I couldn't imagine sending out an email or letter to my clients or prospects with the headline "62% of you are going out of business" even if that's what the statistics show.

When you go to the Formula Five website you are immediately greeted with a 32 minute "Dead Simple" video from StomperNet CEO Andy Jenkins.

It is packed with information, some social proof and Andy is certainly very enthusiastic as he introduces Formula Five and then takes you through some of the ideas in the first module - Margin Magnifier.

He is making Formula Five relevant to the traditional StomperNet audience and the beta testers have certainly had some great results in about 60 days but don't think that Formula Five is just for Internet marketing. Far from it.

Andy takes you through a price increase example which could have you scratching your head in amazement at his maths since, unlike in most businesses, a price increase does not all flow down to the bottom line because cost of good sold increase.

Certainly unusual for off-line marketers where variable costs are linked to volume and not selling price but I believe, on reflection - and after stopping myself emailing Andy and telling him he'd got it wrong - that it reflects the Internet marketing model of affiliate commissions which are a percentage of the total sales price.

There were one or two other things I could take issue with but the real jewel is when you give up your email address since you then get to hear from the developer of Formula Five, Paul Lemberg. Don't delay - get the Paul Lemberg video now. It can be streaming while you continue to read this.

Thoughts On The Paul Lemberg Formula Five Video (After Sign Up)

The Paul Lemberg video itself is long (and especially if you have just watched Andy for 32 minutes) - at 73 minutes - but is fascinating.

It starts with the business failure statistics and shows that the odds of success at gambling are often better than owning a business which is certainly an interesting take.

The video then highlights eight factors which unsuccessful business owners have identified as the causes of their problems and Paul Lemberg discusses his concept of the "rescue fantasy" along the lines of "things will get better if only we can..."

But business success comes from doing things a little bit better.

Whatever price you charge, what if you could charge a little bit more?

However many leads you get, what if you could attract a few more?

If your conversion rate of leads to customers is low, what if you could bump it up just a little bit - for example improving from one in ten to one in nine?

All these little things add up because of the law of compounding and I have said it before, small changes create a big effect because your profit is the difference between much bigger numbers.

This Formula Five video is solid content as Paul Lemberg will make you reflect on your own business and then introduces each of the success formulas in Formula Five.

Highly recommended - sign up to get your download version because you should probably watch it several times - Paul Lemberg Formula Five

Internet marketing examples are used in the video to make it relevant to the StomperNet community but this product is really targeted at the off-line world of service providers, distributors, manufacturers and retailers.

So What Is Paul Lemberg's Formula Five?

It is a 15 week coaching program that comes in five stages.

• Formula 5 Step 1 - Increase your margins
   
  
• Formula 5 Step 2 - Increase how much your customers buy
   
  
• Formula 5 Step 3 - Increasing the number of leads for your business
   
  
• Formula 5 Step 4 - Maximize your customer conversions
   
  
• Formula 5 Step 5 - Increasing the productivity (of you and your team).
  

But at this stage enjoy the free top quality content provided by the Formula Five launch.

Is Profit Really This Sensitive To Selling Price?

In the Formula Five video, Paul Lemberg shows you a simple business with a Profit and Loss account and what happens if price increases or decreases by a little more than 10% - profit falls away to nothing or doubles. Many people are amazed when they see how sensitive profit is to price changes - sometimes thrilled at the opportunities to make more money and sometimes horrified at the decisions they've made when they didn't realise the importance.

If you want to try other changes in price, I have written a very simple little Excel spreadsheet using the same Formula Five example which allows you to see what happens to Profit and the break even point.

Download Formula_Five_Dynamics

Customising The Model To Your Numbers

I have also written a more advanced spreadsheet which lets you turn Paul Lemberg's example into your business based on the key profit drivers of:

1. Unit selling price
2. Unit costs
3. Fixed costs, overheads or SG&A
4. Sales volume in terms of units sold.  

Just like the example in the Formula Five video this will show, when set with your numbers, your base Profit & Loss account and break even position and it will calculate revised "what-if" numbers based on your assumptions.

Just fill in the form below and you will receive an email with the link to download the Excel spreadsheet.

Name:

Email:

Remember these are your numbers based on you achieving your set performance on the key profit drivers.

Formula Five Review

I am very lucky to have an excellent relationship with StomperNet who have joint ventured with Paul Lemberg to market Formula Five and I have a review copy.

The first module - Margin Magnifier - has been delivered to me physically, the second is on its way and I have been given access to the online community with the extra modules.

However this is a meaty product which will take a significant amount of time to work through.

My main Formula Five review is on my Online Profits blog because I had not realised just how much Formula Five was targeted to the mainstream of small businesses. The Internet is seen as just one method of attracting and servicing customers.

Paul Lemberg Formula Five Review

Have You Experienced The Paul Lemberg Magic?

I would be very interested to hear your experience with Paul Lemberg if you have been a client or heard him speak at a conference.

While Paul and I have exchanged emails and we follow each other on Twitter, Formula Five is my first significant contact with Paul's ideas although I have been aware of Quantum coaching for many years.         

Formula Five is launched at 3:00 pm EST, Monday January 19th, 2009

Formula Five