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Tuesday, September 9, 2008

How to Reverse the Zero Profit Spiral

By Wayne Brooks

Congratulations for taking the time to review, learn, and act on what you're about to discover from this here. The operative phrase here is "to review, learn, and act". If, after reviewing and learning what I'm about to share, you fail to act by taking the steps needed to realize the financial results you're looking for, then let's face it, you will have wasted one of the most valuable resources that there is...YOUR TIME, AND you'll be no better off financially for having read this report than you would be had you not read it.

If on the other hand, you do review, learn, take action you'll know exactly how to achieve the positive financial outcome that you've been looking for online. With that said, let's begin...

All business systems work on the same fundamental model of
Input -> Process -> Output

Consider the business process for any money making system (online or offline)
Input Process Output
Business Owners -> Invest to Acquire Goods and Services -> Goods and Services for Sale
Marketers -> Generate Interest in Goods and Services for Sale -> Consumer Interest
Interested Consumers -> Buy Goods and Services for Sale -> Business Owner Income
Business Owner Income -> Pay Business Expenses -> Profit to re-invest

Why is this model important for you to understand?

Because it illustrates some obvious but nonetheless significant points of truth when it comes to making money online or offline:

1. Business Owners use THEIR money to acquire and produce goods and services for sale

2. Marketers earn THEIR money through commissions from the sale of goods and services

3. Business Owner Income resulting from goods and services for sale being purchased is what pays marketer commissions and produces profit to reinvest in more goods and services

And the process repeats.

Now, I'd like you to notice something with regard to the business system model.
Notice WHEN everyone gets paid. Everyone gets paid WHEN an Interested Consumer makes a purchase. When an Interested Consumer makes a purchase the result is a Sale.

There's NO Secret.
There's NO Magic Button.
There's NO Whiz-Bang Technology.

Bottom Line: No one makes ANY money until a sale occurs.

As a business owner, the income from the sale of goods and services is at a price point sufficient to do the following:

ท Recover your initial investment, so you can re-invest
ท Pay commissions to marketers
ท Make you a profit to live the lifestyle you choose

As a business marketer, you have no investment to acquire and produce the goods and services for sale; however, you likely have expenses associated with advertising the goods and services for sale to potential consumers, and with the cost of being a marketer. Therefore, your commission from the sale of the business owner's goods and services that you represent must be sufficient to do the following:

ท Recover your costs to advertise to consumers (Just as the owner recovers
his/her initial investment)

ท Pay expenses associated with being a marketer (Marketing system, Continuing
Marketing Education) (Just as the owner pays commissions)

ท Make you a profit to live the lifestyle you choose

Now, it's important to notice here that the business owner passes the cost of advertising to consumers along to you the marketer, and as should be obvious by now, if the commission you receive on a sale is not sufficient to do all three things listed above, then what happens? Here's what happens...

YOU SLOWLY GO DEEPER AND DEEPER INTO THE DEBT HOLE UNTIL YOU GET FRUSTRATED AND COMPELLED TO TRY A NEW PROGRAM, ONLY TO HAVE THE SAME THING CONTINUE TO HAPPEN AGAIN AND AGAIN...WHY?

Because you fail to consider to two key things:

Revenue - the total amount of money for goods or services sold during a given time period.

Profit - The positive gain from a business operation after subtracting for all expenses.

So, if you never understood before
ท WHY most fail to make any significant cash online?
ท WHY most give up and jump to another program when the latest one isn't
working as expected?
ท WHY the latest and greatest system isn't doing it all for you like you thought it
would?
ท WHY you can never seem to make any SIGNIFICANT money even though
you're making a few sales?

Now you know...its THE PROFIT FACTOR.

So, if you've followed what I've presented so far then hopefully you've had an "AH HA!" moment.

AGAIN WHY?

Because NOW you should understand the following:

1. MAKING MONEY SIMPLY MEANS YOU'RE GENERATING REVENUE
2. IF ALL YOUR REVENUE GOES OUT THE DOOR TO COVER EXPENSES
YOU HAVE NO PROFIT
3. IF YOU HAVE NO PROFIT YOU HAVE NO POSITIVE CASH FLOW
4. WITHOUT POSITIVE CASH FLOW YOU HAVE...ZERO, NOTHING, NADA,
ZILCH!

So, how do you turn things around?

Here's how...
First, consider who's really cashing in every month from the program you're promoting. Is it the Business/Affiliate Program Owner (BAPO)?
OR
Is it YOU the Business/Affiliate Program Marketer (BAPM)?

THE ANSWER?

Well, if you said the Business/Affiliate Program Owner, you're right! WHY?
Because the Business/Affiliate Program Owner after recovering his/her initial
investment which can be reinvested again and again to drive the business cycle, any money left over not used for business reinvestment or to pay commissions is what...you guessed it...PROFIT.

What's more, because the BAPO likely has a small army of affiliates generating
revenue for him/her, in a given 30 day period the BAPO realizes profit from multiple sales, and if the BAPO effectively manages his/her costs, then KA-CHING, KA-CHING!

IS THERE A WAY FOR THE BUSINESS/AFFILIATE PROGRAM MARKETER TO CASH IN?
Absolutely! The Business/Affiliate Program Marketer can make an absolute killing by doing 3 simple things.

There are 3 things that the Business/Affiliate Program Marketer can do to reverse the ZERO PROFIT SPIRAL!

1. Focus on monthly revenue (sales commissions) exceeding monthly expenses
(advertising, marketing system, continuing marketing education costs)
2. Apply effective cost management and use profit centers to earn from
everything you do.
3. Increase your commission per sale.

Wayne Brooks is an Affiliate Blogging Expert, a Guerrilla Information Marketing Certified Trainer, and Founder of YourOnlineBusinessAdvisor.com's Affiliate Blogger Network, a community for Bloggers and Internet Entrepreneurs seeking profitability through affiliate marketing. Feel free to distribute this article in any form as long as you include this resource box. Discover more ways to monetize and profit from your blog using Atomic Blogging and Affiliate Marketing by visiting http://www.YourOnlineBusinessAdvisor.com

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