Business Coaching

Business Turnaround Coaching With Mark Joyner & Simpleology

I am continuing to review the 7 Day Business Turnaround Kit produced by Mark Joyner and Simpleology and an important bonus element of the program is that there are two series of coaching call recordings:

The first set of business turnaround coaching calls are with the original guinea pigs, (or Space Monkeys as Mark calls them) for the program and these are small group, interactive sessions.

The second set of business turnaround coaching calls are with the first batch of clients and because of large numbers, these are more of a presentation from Mark Joyner as he answers questions raised by the members.

Background To The 7 Day Business Turnaround Kit

Before I look at the calls in any detail, if this is your first contact with the 7 Day Business Turnaround Kit, it would be a good idea to read my earlier reviews so that you understand more about the program and in particular the structure of the 7 Day Business Turnaround Kit:

Seven Day Business Turnaround Kit - Simpleology - introduction

Business Turnaround: To Thine Own Self Be True - Day 1

Cost Cutting In Your Business Turnaround - Day 2

Business Turnaround: Finding Your Cash Injections - Day 3

Business Turnaround: Generating Cash Urgently - Days 4 to 6 (Day 7 is preparing for the future)

7 Day Turnaround sales letter - at the moment this is available as a 7 day trial before you have to pay so that you can improve your business and generate the extra cash required.

Business Turnaround Coaching Calls - An Optional Extra?

The 7 Day Business Turnaround Kit is a very intensive program designed to do exactly what it says on the tin. You will be very busy working through the compulsory material, applying the ideas to your business and taking action (the essential step if you are going to get the results you want).

Because the coaching calls are not listed on the daily program, the two coaching calls in my opinion can be considered as optional extras but they will help you if you feel stuck or need extra information.

Day 1 Business Turnaround Coaching Calls

This is very much the introduction to the program and both the Space Monkeys call (50 minutes) and the first group call (80 minutes) have to be seen in that light.

Mark Joyner emphasises the importance of working purposefully through the program but Day 1 is about reviewing your own feelings towards the success (or failure) of the business and what it means to you and the people who depend on you together with the start of the review process to gain control and stop the bleeding on time and money.

Both calls have "celebrity guests" with Tellman Knudson on the Space Monkeys call and Joe Vitale (Hypnotic Marketing and "The Secret" film) on the first group call sharing their thoughts and experiences.

I consider these calls to be "nice to hears" rather than essentials assuming that you are serious about working through the turnaround program. Download and listen to in the car if you have long journeys but if you are short of time, concentrate on the main program activities for Day 1.

The Day 1 questions are challenging nut essential. You may find that the information is not easily available but you must not use that as an excuse to delay taking action.

To save time I listened to the recordings of the turnaround coaching calls through some clever software called FasterAudio which allows you to speed up and slow down recording speeds and I found it comfortable to listen at 135% of normal speed and take notes saving me about 30 minutes.

Day 2 Business Turnaround Coaching

There are another two hours of coaching calls for the Space Monkeys and the first group.

The Space Monkeys call reinforces the need to tackle the Day 2 issues and the relief that comes from taking action to cut your costs.

Focus then moves on to preparation for Day 3 in terms of developing cash injection missions with interesting stories from Andy Duncan (information product over the Internet) and Tellman Knudson (professional services) of how quickly cash can be generating. This is inspiring stuff and nicely balances the Internet/real world issues.

In the group coaching call, Mark Joyner is again reinforcing the important points from the first two days of material and then features interviews with of the two Space Monkeys. A great story from Andy Duncan about how the Day 2 Space Monkey call inspired him to take action with a new idea which generated significant cash very quickly.

Andy also offers a great bonus recording which you have to get for the Day 5, creating cash out of thin air.

The other Space Monkey featured is Tom Justin, author of "How To Take No For An Answer and Still Succeed". I haven't read it but it sounds a great philosophy.

A big problem is that people won't try things because of the fear of failure. Or people will start but not finish because of a desire to make it perfect.

In the business turnaround, you have to just go out and do it.

Take action.

If it works great, if it doesn't, identify what you have learned for next time.

Day 3 Business Turnaround Coaching

In day three the coaching calls get longer with a total of 169 minutes.

The Space Monkeys call (76 minutes) has a presentation from top copywriter Mike Morgan (in advance of his video in Day 4) which is again excellent and very focused on the topic of creating cash injections and then Mark Joyner explains methods for how you can find your thirsty crowds to make your offer to.

It is an excellent, informative call but I know that Mark Joyner would urge you to focus on completing your first cash injection mission as a higher priority.

Just taking action:

a) will create such a positive feeling for you. It marks the transition from being in totally reactive mode worrying about your lack of cash before you start the turnaround program to pro-actively making things happen that will generate cash for you.

b) you will learn so much from trying to use the PMCFT formula which will help you in your next cash injection mission tomorrow.

The group coaching call is even longer at 93 minutes and again features copywriter Mike Morgan taking you through the basics of copywriting and in particular short cash injection copy. This does mean that there is duplication between both calls. Whilst repetition takes time, it also reinforces your learning and makes it easier to move from theoretical knowledge to practical application.

In this group coaching call, Mike Morgan gives away some excellent free information to help you to create emotional copy to encourage browsers to become buyers together with several other valuable resources.

The more I look at the Seven Day Business Turnaround Kit, the more I see this as a complete business development system.

Day 4 Business Turnaround Coaching

The Space Monkeys call (47 minutes) is more interactive than previous calls with Mark Joyner continuing to encourage taking action on the cash injection missions on a ready, fire, aim basis.

Just do it and then improve is the basic message at this stage.

The call also includes some recommended copywriting resources but the Seven Day Business Turnaround Kit is already strong in that area and particularly with the great bonuses from Mike Morgan.

The Group coaching call is 68 minutes long and Tellman Knudson pops up again with tips and stories about creating cash injections missions and Tellman also provides a bonus set of videos to help you with list building.

In my view neither of the Day 4 coaching calls fall into the "must hear" category although both are useful to hear but shouldn't be at the expense of taking action.

Day 5 Business Turnaround Coaching

The Space Monkeys coaching calls for day 5 lasts 68 minutes and is an interactive session answering questions about how you can create information products out of thin air.

The group coaching call was 68 minutes and featured two guests, Pat O'Bryan and Ladan Lashlan (one of the original Space Monkeys) to share their stories and ideas about creating information products.

This call also included a pooling of resources to help make teleseminars, ebooks, audio CDs easier to produce. Both guests also give away for free helpful resources to help you to develop your Internet information business further.

Again neither of these calls fit into the unmissable category if you need to create your cash injection missions urgently but both are valuable and interesting over the long term.

Day 6 Business Turnaround Coaching

The Space Monkeys coaching call for day 6 was an interactive session to help people complete their first cash injection mission.

The group coaching call included two guests and focused on helping to find the best ways to forge joint venture deals or in Mark Joyner's terms advanced integration marketing - Jason Henderson, the space monkey who was using the course to attract votes for The Next Internet Millionaire contest and Stirling Valentine, an expert in joint ventures.

Day 7 Business Turnaround Coaching

On day seven, Mark Joyner is laying the foundations for the future development of the business and explains the extra resources which are included as bonuses in the Seven Day Business Turnaround Kit.

The Space Monkeys call is a summary of people's success stories but also includes some important lessons about persuasion and in particular presuppositions.

The group coaching call introduced us to Dr Michael Hudson who has provided four business development calls to cover the future strategy for the business.

Conclusion on the Business Turnaround Coaching Calls

All the calls are good to listen to and valuable as the issues brought up will be relevant to at least some people but none of the calls are essential in my view.

If you are in a cash crunch then it is essential that you concentrate on taking action on both blades of the scissors - your revenue/cash receipts and your costs/payments. To be fair to Mark, this is a point that he keeps emphasising in the calls. The cash flow problems in the business will only be corrected with action.

The main Seven Day Business Turnaround Program is already comprehensive with the necessary information introduced in the daily lessons and supplemented in the guest videos.

Listening to more learning material if your business is rushing down the slippery slope to oblivion is not the thing to be doing. On average you will have more than two hours worth of calls per day to listen to and I believe the time is better spent working on your cash injections missions:

1. Thinking about them
2. Creating them
3. Marketing them

If you need help, I recommend reviewing past post on the forum and if necessary posting a question yourself. Just remember the forum is visible to Google so be discrete.

I continue to be very impressed with the Seven Day Business Turnaround Kit and while I haven't done a cash injection mission because I want to work on some longer term strategic issues, I can see that the techniques work and this is confirmed by all the success stories for the product. I have gone back and reviewed more of my costs and knocked a few more regular payments on the head because I'm not getting value.

Mini Moans

Inevitably there are a few ways that the product could be improved:

1. The emphasis remains on selling information products for Internet marketers and I would have liked to have seen more effort to relate it back to non-Internet businesses.
    
   The basic process of the seven day turnaround kit applies to any business and I understand the attractions of creating information products to sell on the Internet but I would have liked to see examples of how this approach can quickly drive extra leads and cash to a primarily off-line business. It looks like I will have to write my own article on using information to sell tangible products
    
   
2. Given the critical importance of time which is the theme of Simpleology 101, I would have liked to see summaries of these coaching calls so that it was clear what was included or transcripts available so that they could be quickly scan reviewed.
    
   
3. The focus on the coaching calls was very much on the cash injections but many people will have difficulty dealing with the difficult decisions required in day 2 to cut costs and this will be especially true if there are excess staff to remove. It is an unpleasant task so more support and reassurance about how handle the conversation would have been helpful.

But these are minor niggles and I continue to believe that the Seven Day Business Turnaround Kit is an excellent product for any small business in financial difficulty or for any small business which wants to give itself a quick boost in performance.

There are still a lot of bonus resources which I haven't worked through including Dr Michael Hudson's "Making It Stick" coaching calls, and the Simpleology courses to implement the ideas  from Mark's books "The Irresistible Offer" and "The Great Formula".
To Your Success

Your Profit Coach

Paul Simister

Business coaching for customer focused entrepreneurs

Business Turnaround In A Week

I came across a blog posting which examines Gordon Ramsey's turnaround method used in the TV programme Hell's Kitchen to turnaround struggling restaurants within one week.

Gordon Ramsey is a very well known chef and TV presenter but I was impressed by the seven step approach to business turnaround explained in Using the F-Bomb to Guarantee Your Success by Troy White.

The seven step turnaround process is:

1. Work out what you are really selling now. Gordon Ramsey has a meal in the restaurant and pays close attention to the existing situation in terms of staff, food, other customers and overall atmosphere.
    
   
2. Find out who is behind the current disaster. Gordon Ramsey interviews the key players and assesses how much they care about the restaurant and want to improve.
    
   
3. Find out what the customers really want. Who are the regulars (if any) and what do they like/dislike? What do they want? What are successful restaurants in the area doing better or different?
    
   
4. Find the signature dish which the restaurant can become known for. What does the chef love to make which is excellent? Make sure it is on the menu and promote it.
    
   
5. Simplify the menu by cutting down on the number of choices. In simple terms variety adds complexity in the kitchen which increases cost while reducing quality but variety also over-complicates the customer's choice.
    
   
6. Systems are the key to ensuring consistent delivery of great food.
    
   
7. Feet on the street marketing to offer free trials of the signature dish to tempt customers to (or back to) the restaurant.

Seven simple steps which deliver  turnaround within a week for the restaurant businesses featured in Hell's Kitchen.

I have not watched the TV programme because I find the foul language inappropriate but I understand that the restaurants are revisited some time after and the turnaround continues to be successful in about 90% of cases.

That is impressive and while the "seven days" in the turnaround in a week may have benefited from the Gordon Ramsey word of mouth factor, it is good to see the the ongoing success.

What we have is a generic turnaround process which could be translated to many other different types of businesses.

Business Turnaround In A Week v the Eight Pillars Of Business Prosperity

Just as with my own Eight Pillars of Business prosperity, it starts with getting a firm grasps of "where are we now". It then moves on to look at the actions and motivations of the owner and the key members of staff [mirroring my own Pillars 2 (Vision to action) and Pillar 7 (Leading the team)]

Next we have three steps which concentrate on establishing the market position - what do customers want, what is our specialty and reducing the clutter to focus on the specialty (which is my Pillar 3 your market positioning).

Step six looks at systemising the business (my pillar 8) so that you deliver on the promises you make in your marketing (which creates the reinforcing loop of customers coming back - my pillar 6) while step seven generates the leads (my pillar 4).

You may have noticed that the only pillar missing is pillar 5, converting leads to customers but that is really embedded in the other steps.

The Seven Day Turnaround Kit

Regular readers will know that I have been extensively reviewing a product called the Seven Day Business Turnaround Kit from Mark Joyner and Simpleology but the approach is very different.

In the Simpleology course (which is excellent), the program is broken down into days:

Day 1 - Establishing your motivations and the facts (similar to step one in the Gordon Ramsey approach) - (see my turnaround review day 1)

Day 2 - Getting your house in order - this day is focused on reducing your stress by systematically working through your costs and challenging yourself to reduce wherever you are not receiving immediate value. It then teaches you ways to tackle pressure from your creditors who are demanding payment. (see my turnaround review day 2)

Days 3 to 5 are about creating Cash Injection Missions into your business by making full use of the assets you have (e.g. fire-sale of excess stock), identifying opportunities in your intangible assets to create information products (from what you know or from what the people in your network know) and taking them to market. (see my turnaround review day 3 and days 4 to 6)

Day 6 is about raising emergency cash in TINA situations (There is no alternative.)

Day 7 prepares the business for ongoing development once cash to cover two months operating expenses has been created.

This is an alternative approach which focuses on cash in the seven day turnaround period and then later takes you through a business building process.

Conclusion - Business Turnaround In A Week

It is interesting to see the difference in approach and if you find yourself in the unfortunate situation, I hope that it gives you ideas.

The restaurants in Hell's Kitchen benefit from having the focused attention of such an eminent expert as Gordon Ramsey who will command instant respect from the restaurant owner and the staff. He also brings an expert critical eye to the restaurant and removes any issue of "rose tinted spectacles " from the owner. Seeing the problem and the genuine situation is the first step in the turnaround process.

The examples also have the focus of the TV film crews and no one wants to be seen in a bad way which will energise them to take action although there will be some resistance.

It is a different situation when you are trying to turn your own business around. It is difficult to see things as they really are. We all get socialised to our existing situations and what other people see as bad and unacceptable, we can see as normal. This reality check is one of the big advantages in bringing an independent third party in to have a look at a business.

The emphasis also moves to you and only you. No one is pushing you or telling you what to do and the stress is internal from your own fears rather than external pressure.

To Your Success

Your Profit Coach

Paul Simister

Business coaching for customer focused entrepreneurs

Why Entrepreneurs and Small Businesses Fail

Rich Schefren has been quiet recently but he's back with an interesting blog asking "What Is An Entrepreneur" which celebrates two years since he published the Internet Business Manifesto. In this free report (details blow) he identified that the big problem for many businesses is they are run opportunistically rather than strategically heading towards a clear vision.

His blog included the following causes of business failure which I thought you'd want to know:

According to a research study published by John Murphy of Murphy Associates, cited by SCORE - he main reasons why businesses fail include:

• Lack of a solid business plan - 78%
   
• Being overly optimistic about sales and required funds - 73%
   
• Not recognizing or ignoring weaknesses and then not seeking help - 70%
   
• Poor cash flow management skills/understanding - 82%
   
• Have insufficient or irrelevant business experience - 63%
   
• Not pricing properly - 77%
   
• Not understanding or ignoring the competition - 55%
   
• Hiring the wrong people - 56%
   
• Not promoting the business properly - 64%

It is a sobering list so let's go through each in a little more detail

Small Businesses Fail Because They Don't Have A Solid Business Plan

Why does having a business plan help?

Because it forces you to think through the logic of your business - the what, the how, the when, the why, the where and the who and then commit it to writing so that you have a permanent record to go back to and review.

A business plan is a way to hold yourself accountable.

The big advantage of "being your own boss" is that you don't have to answer to anyone but yourself but it can be a fatal flaw if you don't do a performance appraisal on yourself.

Do you remember that small business guru Michael Gerber talks about the three parts of a small business owner - the entrepreneur (the business creator), the manager (the implementor) and the technician (the worker)?

So why don't you put on one of those hats and assess how the other roles have been performed?

Ask yourself whether as manager you have been supported by the entrepreneur creating a clear sense of direction and the guidance necessary to build a working business.

If you wear the entrepreneur's hat, has the manager been effectively implementing your ideas? Has the technician been effective and efficient? If not why not.

So why don't small business owners produce a solid business plan?

1. It's seen as busy work - but thinking before taking purposeful action is the most valuable thing you can do. Brian Tracy says that every failure comes from not thinking enough before you take action.
     
   
2. You only prepare a business plan when the business is starting out or you need a bank loan - just not true. The best businesses have a rolling business plan which is regularly reviewed and updated. It re-confirms the vision and goals and updates the action plan based on tests, results and any actions and reactions from customers and competitors.
    
   
3. You don't have the time - sorry this is a poor excuse - the real answer is that you don't make time.
    
   
4. You don't have the skills - my advise is that you shouldn't over-complicate it but if you need help, there are plenty of business planning guides and I even offer one for free - see better business plans
    
   
5. You don't think it's important - but that's not what 78% of business owners in the survey now think. They have learned the hard way that business planning is an essential activity for businesses. I will keep saying this - it is so much better to try an idea out on paper and find that it loses money than to try it out in real life and lose a fortune. Business planning will not only stop reduce the risk of bad decisions, it will help you to implement your great ideas more effectively.

Small Businesses Fail Because They Are Too Optimistic About Sales and Required Funds

There is a delicate balance between having the confidence to back your business idea and give it a real go and being so optimistic that you are certain you have a sure-fire winner without seeing the pitfalls, difficulties and constraints.

The world is tough and customers do need a compelling reason to buy from you. Writing your business plan helps you to:

1. Find your unique market position where you are better than competitors in ways that matter to customers.
    
   
2. Decide how you will spread your marketing message
    
3. Face up to possible constraints and skill shortages so that you take action to improve
    
4. Focus on your underlying assumptions as you work your way down the sales funnel in terms of numbers and time lags.

Many of the business plans I see are too optimistic in their timing as business owners assume that prospective customers will leap into action at the first contact. It's just not true. Jay Conrad Levinson (Father of Guerrilla Marketing) says that it takes on average nine customer contacts to turn a name into a customer.
This optimism then causes cash to become a problem. Because sales forecasts are too optimistic, the underlying cash forecasts have cash receipts flowing into the bank account faster and to a higher value than is likely to happen. This false picture then shows that the business can afford to splash out early on expenses which it should defer until the business concept is proven.

Small Businesses Fail Because Owners Don't Recognise Weaknesses And Then Not Seeking Help

I mentioned Michael Gerber earlier and if you have read his great book "The E Myth Revisited" you will know that many small businesses are started when the entrepreneur has an entrepreneurial seizure and wakes up with the idea that he could start a new business.

There is no acknowledgment of the fact that the person has never been taught how to develop a business but just an inner confidence - "It must be easy because so many other people do it."

There seems to be a reluctance to admit any knowledge gaps and to seek help from business coaches and other business professionals.

I understand that it can seem expensive but being able to tap into extra knowledge and experience is invaluable.

There is even a reluctance to subscribe to programs such as Scott Hallman's Small Business Growth Club which provides outstanding value on how to build a profitable business.

Small Businesses Fail Because Of Poor Cash Flow Management

Never forget - cash is king.

There is an old banker's mantra that is well worth remembering:

Sales turnover is vanity

Profit is sanity

Cash is reality

For more details about cash flow forecasting see the Importance of cash and cash flow forecasts.

Small Businesses Fail Because The Entrepreneurs Have Insufficient Business Experience

I mainly covered this item in the "not recognising weaknesses or asking for help" point above but lack of business experience means that many people start a business without knowing what is required to start a business.

In other words they don't know what they don't know so they can't ask for help.

Small Businesses Fail Because They Don't Price Properly

Pricing is where the rubber of your business strategy hits the road as your customers have a direct choice between your product and price combination and your competitors.

Price too low and you win orders but don't make any profit (remember the banking mantra).

Price too high and you don't make any sales.

To make it worse, every buyer loves to negotiate a lower price.

If your product is great value at £50, it is an even better buy at £35 so you can expect to come under continual price pressure as the buyer fishes for a discount. It is good buying practice but you need to be able to resist and have the confidence that you have communicated your benefits/value/price combination effectively in your selling.

For more information about pricing, see my free report How to price what you sell

Small Businesses Fail Because They Don't Understand Or Ignore The Competition

Even in business plans from big companies who should have known better, I have seen ambitious growth plans where the company is clearly hoping to grow at a faster rate than the market. The only way to do this is to take business away from competitors and you have to be prepared for them to react.

As a child what happened when you tried to take a toy away from your brother or sister when they were playing with it? I bet they put up a fight to keep it or at least shouted to Mum for help.

It's the same with competitors. If you take what they think is theirs through aggressive price competition, they will react and try to pinch at least one of your customers.

Sign up to the free report with my newsletter to find out more about how to win profitable business away from competitors.

Small Businesses Fail Because They Hire The Wrong People

Michael Gerber warns about the dangers of building a people dependent business when the entrepreneur should be building a business based on systems. While I agree with systemisation I still believe that the quality of people is an essential factor in building a great business.

The problem is that it is difficult to recruit. For all the interview techniques and personality tests, you don't really know what you have until you make your decision and see the person working in your environment.

Brian Tracy has an expression "hire slow but fire fast". 

That makes much more sense than the easier "hire fast and fire slow" which saddles businesses with uncooperative, uncommitted and poorly skilled employees.

If you find that you have made a recruitment mistake then take action sooner rather than later. Brian Tracy teaches a technique called zero based thinking which involves asking yourself the question "Knowing what I know now, would I still hire this person?"

Small Businesses Fail Because They Don't Promote The Business Properly

I have been writing a recent set of articles that look at common marketing mistakes based on the ideas of master marketer Jay Abraham.

In these four articles I explain that many businesses don't do the market research, don't develop their own unique selling proposition and use the wrong type of advertising which doesn't give them results that can be measured and improved.

Reduce The Rate Of Business Failure

This blog is packed with ideas, tips and extra resources to help you to improve your business. Please the information in here and the blog will continue to grow and develop.

As well as my own ideas, I bring you the ideas of my favourite ten small business gurus together with other ideas as I come across them.

I started with a reminder of Rich Schefren's Internet Business Manifesto. Even if you don't have a business that trades or promotes itself in any way through Internet marketing, much of the report still makes very thought-provoking reading. You can download your free copy of the Internet Business Manifesto.

If Your Business Is Already In Trouble

If you have landed on this page because  your business is already in trouble, please see my article Business coaching in tough times which looks at the options in terms of self help, business coaches and consultants and  turnaround managers.

To Your Success

Your Profit Coach

Business Coaching for customer focused entrepreneurs

Break Even Analysis - Cost Volume Profit Analysis

Today's Finance for Non Financial Managers training lesson concerns break even analysis and the calculation of the break even point. This is particularly suitable at the moment because another series of articles featuring in the blog concerns the issue of business turnaround where moving the business back above the break even point is such an important issue.

What Is The Break Even Point

The Break Even Point for a business is the sales volume or sales value where the business neither makes a profit or a loss but is said to break even.

While arithmetically, the break even point is very precise, in general if a business is trading at a small profit or loss is will be said to be breaking even.

In previous financial training lessons (e.g. Matching Costs To Time), I have tried to make you understand that financial performance is not precise since it depends on interpretations, judgements and estimates.

So one accountant may prepare a set of accounts for a business which shows a £4,000 profit for the year while another accountant will make a different set of decisions and report a £3,000 loss. In both situations, the business is operating at around the break even point and the differences will be evened out over time.

Cost Volume Profit Analysis

An understanding of break even analysis is based on the cost - volume - profit relationship within a business.

There are three fundamental relationships:

1. Revenue varies directly with the number of units sold and the price the sales units are sold at.
    
2. Some costs vary directly with the number of units sold
    
3. Some costs in the business are fixed for a period and do not vary directly with sales levels. These costs do not automatically increase if sales increase and do not reduce if sales are lower than expected.

This creates a cost volume profit relationship which can be seen by the graph below:

 

As you can see the blue Revenue line starts from zero (if you don't sell anything, you don't generate any revenue) while the red Cost line starts from a point on the £000 axis which represents the fixed costs of the business.

Where the Revenue line and the cost line meet, the business does not make a profit or loss and is said to be at the break even point.

To the left of the break even point, the business is making a loss because costs are greater than revenue. While the angle of the revenue line is steeper than the cost line, it takes single sales to pay for the fixed costs.

To the right of the break even point, the business is making a profit because revenue is greater than costs.

An alternative way to think about your break even analysis and cost volume profit relationship is to your sales as contributing to meeting and then exceeding your fixed costs. 

In this approach you don't look at total revenue and costs but instead focus on the contribution of every sale  which is the difference between your sales price and  the variable cost of that sale.

So for example, a book shop may have an average selling price per book of  £10 with an average cost price of £7.  This means that the contribution (margin) per book is on average £3.

This changes the break even graph to look like the one below:

This is the approach that I prefer since it helps focus on the three basic profit generating tactics more clearly:

1. Can you increase your sales volumes?
    
   
2. Can you increase the contribution per sales unit (either by having a higher selling price or a lower variable cost)?
    
   
3. Can you reduce your fixed costs?

These three questions are the very essence of working with the break even analysis / cost - volume - profit relationship to improve the results of a business.

Calculating The Break Even Point Of A Business

The standard calculatiion uses the simplifying logic of the second graph and therefore if you want to calculate the break even point for a business you need to know:

1. The value of fixed costs
    
   
2. The contribution margin either as per unit or as a percentage of sales.

The formula is simple

The Break Even Point = Fixed Costs / Contribution Margin

Let's work through a couple of examples starting with the book shop mentioned above.

If the fixed costs are £6,000 per month for the shop and wages for staff and the average contribution per book is £3 then the break even point is £6,000 divided by £3 per book which means that the shop needs to sell 2,000 books per month to break even.

If we assume that on average the shop is open on average five days per week and four weeks per month, that means that the break even target per day is 100 books and per week 500 books.

With this knowledge, the book owner has a general indication of how well the business is performing each day before any accounts are prepared.

If one day, they sell 200 books then the book shop owner knows that they have had a very good day and should make a profit but if only 50 books were sold, then the business is likely to have lost money.

This calculation assumes that the £3 contribution per book sold remains true but in practice the margin on books will vary significantly with a much lower profit on the latest paperback bestsellers and much higher prices and profit on the expensive hardback textbooks.

One way around this problem is to use a contribution margin as a percentage of sales in the break even point calculation and this is the method used where it is not practical to work with sales units.

Break even point in sales value equals fixed costs divided by the contribution margin as a percentage of sales value.

So in the book shop example, there were fixed costs of £6,000 per month and with a 30% contribution margin it means that the break even point in sales value equals 6000 divided by 30% which equals £20,000 sales per month.

So the book shop owner now has a slightly different daily measure as the minimum sales target becomes £1,000 per day.

Using The Break Even Analysis

The break even analysis or cost volume profit analysis can be used in many different ways:

1. Before you start a business, it is very difficult to know how much you are likely to sell but your fixed costs can often be estimated with reasonable accuracy and then it is up to you to live within the budget.
    
   So the break even point can be calculated based on your estimated margins and a "worst case margin" to give you a range of estimated break even points. This then acts as a sense check or feasibility check. Do you really think that your business can sell at above the break even point level and if so, how quickly?
    
2. If you are considering major changes in your business you can calculate what effect it will have on your business. For example, you may have a salesman who comes to you and says that your prices are not competitive but if you allow him to reduce prices by 10%, he can increase your sales by 50%.
     
   To see whether this is a good idea, you would do a quick calculation. For example suppose your business has fixed costs of £100,000 per month and you have a 35% margin. This gives you a current break even point of £286,000 (100,000/35%) which you comfortably exceed with average monthly sales of £350,000.
    
   With a 35% margin, sales are 100% and variable costs of sale are 65%. If sales prices reduce by 10%, this comes straight off the margin so sales are 90% of the old level, margins are 25% of the old level and the new margin as a percentage of sales is 27.8% (25/90).
    
   This will mean that the new break even level is £360,000 (100,000/27.8%) which is higher than the current sales level so the salesman must be right in his assertions that he can increase sales. If he can't the salesman has taken a profitable business and turned it into a business that is losing money and therefore you would see this sales price reduction as a very risky move.
    
   [It is not relevant to this discussion on break even points but the salesman's idea may work if he can increase sales by 50% because the contribution would be higher than the existing business generates.]
     
3. As a method to target business improvement and creative thinking. The cost volume profit analysis provides the framework to help you brainstorm ideas for increasing values, increasing contribution rates and for reduced fixed costs.

Conclusion

The break even analysis is a simple but powerful method for understanding the profitability of your business. In a future article I will look at some of the weaknesses and problems that exist in the simplifying assumptions but I am a stronger believer in businesses calculating their break even points and monitoring trends.

Fixed costs have a nasty habit of creeping up with time and margins often reduce as customers negotiate special discounts, purchase prices increase and the business is worried about increasing its own prices.

The trend of the break even point puts these changes into perspective and shows that the business must take action to improve its performance.

Your Profit Coach

Paul Simister

Business coaching for customer focused entrepreneurs

Business Turnaround: Generating Cash Urgently

The Seven Day Business Turnaround Kit from Mark Joyner and Simpleology focuses on generating extra cash for your business throughout Days 4 to 7.

The objective is to find enough cash to cover your operating expenses for the next 60 days so that you have the time to put longer term growth strategies into place.

Lack of sales may have been the main problem for your business from the start so it is important to be realistic about what can be achieved in the seven day turnaround period.

But Mark Joyner believes that every business has hidden assets which can be used to generate revenue and cash quickly.

But your cash generation will only happen if:

a) You open up your mind. Don't hear an idea and immediately think "I'm not doing that" or "I already know that".

b) You take action to put one cash injection strategy into place each day.

Hopefully the actions from Day 3 when you listed your assets and did the creative thinking exercise has already had your mind racing ahead with ideas to generate cash urgently.

I won't go into too much detail about the cash generation strategies themselves because I have to respect the Simpleology intellectual property and these next few days are the guts of the program.

• Day 4 - Money out of thin air with existing resources
   
• Day 5 - Quick new products from thin air
   
• Day 6 - Last ditch cash injection tactics - if all else fails
   
• Day 7 - What's next

Mark Joyner's lessons are supported by guest videos from Mike Morgan (excellent with some great extras thrown in), Dave Lakhani, Pat O'Brien, Ray Edwards (very good), Kevin Wilke, Dearl Miller (excellent), Ewen Chia, Matt Gill, Joel Comm, David Garfinkel, Marc Goldman (very good) and Paul Lemberg (good tips on time management).

Copywriters & Internet Marketers

Many of the guest presenters in the 7 Day Business Turnaround Kit are copywriters and Internet marketers.

It would be easy to think "I'm not really on the Internet. It doesn't apply to me." and dismiss the 7 Day Business Turnaround Kit.

That would be a mistake in my mind and while I would have liked to see more adaptation of the cash generation ideas to other types of businesses in the turnaround program, these two skills are very relevant to you, regardless of what type of business you are in.

Why Copywriting is Critical

To be successful as a copywriter you have to be an expert in direct response marketing.

Direct response marketing is advertising or promotion which causes the prospective customer to call or visit you (real world or Internet) within a deadline because they have a compelling reason to do "what's good for them" and what's also good for you.

This type of advertising is the exact opposite of the big brand advertising you see on television. Direct response is designed to encourage people to take action straight away and not build a long term brand with various psychological associations to the nicer things in life. You don't have time for that kind of luxury and trying brand advertising may be one of the causes of your current problems.

Internet Marketing - Much More Than A Website

You don't have the time or money for traditional advertising in Yellow Pages, newspapers and magazines and you probably don't have the opportunity for much direct mail.

As I explained in Guerrilla Marketing on the Internet, you don't even need a website to market on the Internet but you can get your business name and details out to people looking for your products or people who may be interested easily, quickly and cheaply.

Email marketing is a great way to contact your existing or past customers and you can find email marketing services which allow you to send and monitor campaigns. I use Campaign Monitor but the best known in Aweber.

Combined Impact of Message and Media

Since marketing is a combination of the message (which you have refined from the copywriting lessons) and media used to transmit the message (the Internet and all the variations), you can see that the Seven Day Business Turnaround Kit is focused on doing exactly what was promised in the only way it can in the seven days.

But I Don't Have An Internet Business

You have proved that you have a PC and can use the Internet, the next aspect is to use the Internet to promote your business.

You need cash and you need it quickly which is why I said at the start you must not close your mind to ideas which conflict with the current way you think.

Do you have a business where people could search on the Internet for your products or services?

If so there are ways and means to get on the front page of many Google searches provided you are realistic about what you are trying to achieve. Target popular keywords and you will fail because people spend years working on their optimisation but target your service in the small region where your customers are likely to be searching and you can succeed.

Do you have a business where there is an opportunity for an information product?

There is a big opportunity in this area although you need to check that it is a market where people are prepared to pay rather than expect it all for free.

Information that you know and take for granted can be a revelation for other people.

If you don't believe me, think back to some of your recent purchases when you've thought "I wish I knew more about this." How can you take the stress out of making a decision or enhance the benefits of a purchase?

It's not just the Internet

The big advantage of the Internet is that it is quick, cheap and has a vast reach. I have readers from 142 countries so far.

The Internet is one route for you to contact your prospective customers and email marketing allows you to contact many people if you have been building up a list.

I would also recommend that you follow up by telephone with your largest customers who may be receptive to the idea of buying more together with any big lapsed customers. You never know, they may have been thinking about you but just never got around to giving you a call.

Conclusion - Urgent Cash Generation

The 7 Day Business Turnaround Kit continues to deliver the goods but you have to appreciate the challenge.

There are no magic wands or silver bullets which can instantly turn on a stream of cash and as you work through these sessions, you may become more aware of the limitations of your past business practices.

If you haven't been collecting email addresses from your clients and prospects and following up with them periodically, then it is obviously going to be more difficult and time consuming to make contact now.

If your business turnaround is a rescue bid for a business that has never really got off the ground and you don't have past clients and prospects, then the barrier is raised even higher since you have to generate these new leads in such a short time period.

The 7 Day Business Turnaround Program does contain various ideas which you can adapt if you are effectively starting from nothing but it will be tough.

But what's the option?

Back in Day 1 you identified why it was so important for you that your business survives and it is now a case of doing whatever has to be done (while staying legal) to generate the cash necessary to give you more time to improve your business.

Click on the link to find out more about the 7 Day Business Turnaround Kit from Mark Joyner and Simpleology.

Preliminary Assessment of the Seven Day Business Turnaround Kit

I have come to the end of the structured course as laid out by the work-plan  and I have read a number of postings in the Business Turnaround forum but:

a) I have not listened to the Mark Joyner coaching calls for each day he did with the first group or the separate coaching calls  with the small group of trialists (the Space Monkeys referred to in the sales letter)

b) I have not worked my way through the two bonus programs based on Mark Joyner's best selling marketing books, "The Irresistible Offer" and "The Great Formula".

c) I have not watched the Outsourcing Secret Weapon videos from Mark Joyner

d) I have not listened to the six hours of Making It Stick calls from Dr Michael Hudson

e) I have not read the other bonus materials and reports.

so you can see why this is only my preliminary conclusion. I have a lot more homework to do from the 7 Day Business Turnaround Kit to appreciate the full benefits.

I give the 7 Day Business Turnaround Kit a Strong Buy Recommendation

I like the structured approach of the program and it makes a great deal of sense to:

Day 1 - Find out the facts and work out just what the business means to you

Day 2 - Take the unpleasant actions to trim away the excess weight from the business

Days 3 to 6 - Create cash injections to buy you time for longer term business development

Day 7 - Prepare the business for the future.

If you find yourself in an under-performing business facing an imminent cash flow problem, just having this guidance and a program like this will make you feel so much better and more in control.

The primary videos in the program which Mark Joyner presents are very clear and concise and clarify your priorities. The back up systems and notes are also very good.

Some of the guest videos are excellent although some are disappointing, either because they are very short and don't really contribute, because they are difficult to hear or because they consume your time without adding much value. But we are different and videos I didn't like may turn on a light bulb in your brain.

The seven day turnaround is a very demanding challenge and for bigger small businesses, the process may turn from 7 days to 14,21 or even 28 days depending on whether you can allow the duration to expand.

Even for a one man business the program is intensive and requires time to work through the program materials, to collect and analyse data and find creative solutions and implement.

It can't be any other way but the stakes are very high since we are talking about the future of your business.

So who do I think the course will suit most?

• Small businesses that are under-performing but not yet facing an imminent cash crisis. You have time to work through the whole program and really implement the ideas effectively. Prevention is better than cure.
     
• Small businesses with an Internet presence. As I have explained above, the seven day time horizon means that the Internet is the cheapest and fastest way of marketing. The more organised your web marketing the better.
   
• Small businesses with a good number of current and past customers. It is much easier to sell to people who have bought from you before and again the seven days gives you little time to go through a selling process which builds confidence with new leads.
   
• Knowledge based small businesses who can quickly produce (or source) and market digital products over the Internet.
   
• Small businesses with saleable stock/inventory since there are a number of techniques which will help you to promote a "firesale"

Who should give the 7 Day Business Turnaround Kit a miss?

• Anyone who is not prepared to commit to saving their business and working exceptionally hard over the turnaround period. It will take purposeful, determined action.
   
• Anyone who is unsure that they want to rescue their business. If you have lost your passion for your business or it was always just an opportunity to make some money, then you may be better letting the business crash rather than staggering on for an extended period while you are not happy.
   
• Anyone who is not prepared to try new ideas. It will be easy to say "that's not relevant to me" rather than taking the basic concept of say an upsell and asking "how can I apply that in my business?"
   
• The more complex your business, the longer the sales cycle and the bigger your business, the more I believe you need customised advice rather than a generic small business turnaround process. That's not to say that the 7 Day Business Turnaround Kit won't give you ideas. It will and on basis that the bigger the business, the smaller the relative price, it could still be an invaluable purchase. In a larger business, just taking one idea could payback the purchase price many times over.

The Seven Day Business Turnaround Kit is an exceptional product for the price but I urge you to turn to it before your final seven days is about to begin.

I believe that the Seven Day Business Turnaround Kit is a great product to help you to survive the tough times that are ahead and then provide the base for you to build a successful business. You can order it from the 7 Day Business Turnaround Kit.

Mark Joyner is so confident in the power of his Seven Day Business Turnaround Kit that he is offering it to you free to try. That's right, you pay at the end of the seven days so that gives you time to review it and make sure that you are getting your monies worth.

It looks one of the easier decisions you have to make to me.

To Your Success

Paul Simister

Your Profit Coach, business coaching for the customer focused entrepreneur

© Planning & Control Solutions Ltd 2007-2008 All Rights Reserved

Related postings:

Seven Day Business Turnaround Kit Simpleology - general introduction to the program

Cost cutting in your business turnaround - Day 2, getting your business in order

Business turnaround: Finding your cash injection - Day 3 learning how to generate extra cash quickly

Business Turnaround: Finding Your Cash Injection

Day 2 from the Seven Day Business Turnaround Kit was tough but in Day 3 you now have to turn your attention to giving your business a cash injection.

Mark Joyner recommends targeting two months of operating expenses as a cash injection but this is a balancing act. Personally I'd like more cash coverage and to know that my business has more than 60 days to live but as with any goal, you have to balance what you want with what you believe you can achieve.

There is no point having a goal which your self talk tells you is unlikely. That defeats the entire psychological benefit of goal setting although you do need to have some stretch to open up your mind to new opportunities.

I know that having two months cash will be a great relief if you came into the Seven Day Business Turnaround Program with a severe cash crisis and you are uncertain whether you can last more than a handful of days.

In the Day 3 material, Mark Joyner busts the myths that only a few people can bring in cash quickly to a company. According to Mark, anybody can do find a cash injection provided they go through the right process.

As I watched the video and the work book, I could see the Jay Abraham influences come out (but what marketer hasn't been influenced by Jay Abraham, and if not why not?)

Jay Abraham talks a lot about finding hidden assets and opportunities and leveraging these for profit. The 7 Day Business Turnaround Kit takes you through the process of finding these assets and helping you to think creativity about how you can commercialise and monetarise ideas for quick cash.

The Business Turnaround Kit also has a Cash Injection Mission Worksheet to give you a high level business planning tool for each idea which can then be turned into specific actions for you and your staff.

I like this PMCFT method and while different, it struck me with the same power as the 7 Sentence Guerrilla Marketing Plan from Jay Conrad Levinson.

This brings to mind two essentials of planning:

1. Proper planning prevents poor performance.
    
2. Planning need to be specific, focused on results and turned into actions. It is not meant to be a long-winded, time consuming activity.

Extra video training teaches you how to apply the PMCFT method and also gives you a lesson from mark Joyner about the main copywriting formulae. While the 7 Day Business Turnaround Kit also includes as bonuses training programs based on Mark Joyner's best selling books, "The Irresistible Offer" and "The Great Formula", the emphasis in the turnaround program is quick action to solve your immediate cash problems.

Day 3 includes two bonus videos.

The first video features Joshua Shafran explaining that business turnaround is easier than you think. That message comes through in the entire 7 Day Business Turnaround Kit but the video has some excellent content.

Unfortunately sound and vision quality are not up to standard. The Joshua Shafran video is incredibly quiet. It had me checking my PC settings. searching the web for how to make it louder, re-booting my PC to see if there was a booting error in my sound card. Eventually I remembered I had bought some PC headphones and I found them which allowed me to hear what was said.

The second video was also quiet and features Buck Rizvi and Brock Felt explaining how you can make money from teleseminars. This may not seem immediately relevant to you but I like to see it as an example of how you need to break out of your current revenue generation methods and try something new.

It is an excellent call and links back very well to making better use of your hidden assets, in this case, a large network of relationships and skill or knowledge that people would like to learn more about.

Conclusion

By the end of Day 3 of the 7 Day Business Turnaround, you are starting to put your cash injection strategies into place and we will learn more about ways to generate revenue and cash in the next few days.

So far the 7 Day Business Turnaround Kit has been very structured and it leads you through the process very well. Given the uncertainty you may be facing if your business is in a crisis state, this is just what you need.

Click on the link to learn more about the 7 Day Business Turnaround Kit from Mark Joyner and Simpleology.

To Your Success

Paul Simister

Your Profit Coach, business coaching for the customer focused entrepreneur

© Planning & Control Solutions Ltd 2007-2008 All Rights Reserved

Related postings: 

Seven Day Business Turnaround Kit Simpleology - general introduction to the program

Cost cutting in your business turnaround - Day 2, getting your business in order

Business turnaround: Generating cash urgently - Day 4 to 6 three fundamentally different approaches to raising cash.

Cost Cutting In Your Business Turnaround

In Day 1 of the Seven Day Business Turnaround Kit from Mark Joyner and Simpleology, you were told to identify your motives for saving the business and then you made sure you knew your financial position and identified all your costs.

The first step in the turnaround plan is to stop the bleeding of unproductive time and money and the second step is to reduce your stress by dealing with your problems and knowing where you are heading.

Day 2 of the Business Turnaround Kit is when you put your cost cutting plans into action and you speak to your creditors.

Make no mistake, Day 2 is a nightmare

You have to make hard decisions, take action and live with the consequences. Cost cutting is never pleasant but you will feel purged.

If you are serious about turning around your business cutting costs is 100% necessary.

I talk about cost creep in my coaching. It is much easier spending money that earning it and that's why you need to go back and review you costs. In a business turnaround situation saving $1,000 of costs in a month is just as good as earning an extra $1,000 of margin from your sales.

You will not survive if you don't stop the bleeding of cash and wasted time. Day 2 of the Business Turnaround Kit is the day that you take action.

Cost Cutting 101

Stop incurring unnecessary costs and anything else which doesn't give you an immediate payback.

When you are fighting for business survival with possibly only a few weeks to go, the "must go to" exhibition in six months time doesn't matter.These are the type of costs you have to cut, the "nice if's" as well as the wasteful and extravagant costs.

If you didn't read about the zero based thinking for making difficult decisions in my Day 1 review, do so now. Take each cost in turn and ask yourself, "Knowing what you know now, would you still start incurring this cost?"

If not you have identified a cost t