How Extremely Savvy Entrepreneurs Generate Some Really Big Profits During Some Awfully Slow Times!Part Two
So as you previously discovered in part one of this ongoing series, about “how” some extremely savvy entrepreneurs are consistently able to generate some really big profits, during some awfully slow times!
Hopefully it has, (or it’s) starting to dawn on you in a really big way, that not every financial and or business asset that you currently hold near & dear to your heart, is in a fact a so called tangible asset, correct?
Because, (entrepreneur) a literal ton of your extremely valuable specific know how and or expertise, is currently locked away inside your mind!
So it’s not like a tangible asset that you can readily point to on your balance sheet!Right?
But in many ways, it’s far more valuable!And that was the real point of part one. Now as promised, part’s two & three are going into far more nitty gritty detail.
So that hopefully, you’ll be able to “finally” appreciate how and why some extremely savvy entrepreneurs consider (both) a severe economic down turn and or a prolonged economic recession and their immense practical business knowledge and real world experiences, both good and bad, as extremely valuable assets!
And why you and I should too!
So Even Though There May Be A Severe Economic Down Turn Going On How Do Extremely Savvy Entrepreneurs Consistently Generate Some Really Big Profits During These Awfully Slow Times?
As promised in part one. First let’s cover the third text book like example of “how” some extremely savvy entrepreneurs (
1.) Text book example # one: So this fairly successful local real estate developer, that had a brand new customer acquisition cost of about $15,000 dollars.(Give or take.)
Because of all the money his company consistently spent on the really glitzy full and half page ads, in the top four or five local real estate monthly digest magazines. And the occasional mass marketed, quarter page ads they ran in three of the top local Sunday newspapers and the occasional, prime time local radio ads and the monthly open houses presentations etc.
While the local economy was humming along at a fairly brisk pace and his company was consistently operating off, somewhere (between) 35-42% gross profit margins, off the sale of his primarily, semi upscale single family homes.
However, as soon as the local economy hiccuped and started to slow down ever so slightly and the actual length of time between the building and selling of the properties started to stretch out, longer and longer!
Those gross profit margins started to shrink to some dangerously low levels!
So this guy and his extremely savvy CFO (Chief Financial Officer(s)) team, recognized the potential danger they were starting to get into, if they didn’t discover and or quickly develop some proven ways of systematically lowering some of their ongoing up front advertising/marketing cost etc!
So after a little creative brainstorming and diligent research.
Ever Notice How Successful Entrepreneurs Leverage Temporary Setbacks Instead Of Getting Steam Rolled By Them!
Much to their surprise and amazement, their research revealed, a staggering 40% of their entire customer base was in fact, first time home buyers, that just sixteen months ago or less, were renting apartments/townhouses, that ranged (on average) anywhere from $600- $1,000 dollars per month.
So the developer started systematically reaching out to several of the local major apartment/town house owners and or their brokers. And ultimately settled on the following initial marketing strategy.
They would gladly pay the first six months of any empty rental units of tenants that purchased one of their homes, if their rent was $1,000 dollars per month or less!
And they would pay (up to) a full year of any vacant units, caused by a tenant that purchased one of their homes, as long as their rent was a maximum of $800 dollars per month or less!
The developer would simply write the apartment owner/ townhouse owner and or their brokerage management firm a certified check, for whatever the full amount was!
And the owner got to keep the full amount, even if they re-rented/leased the unit before the term was up!That one fairly simple strategy, dropped their overall acquisition cost by about 25% percent!
Which meant, instead of a brand new customer costing $15,000 dollars, it now (roughly cost them only $11,250 dollars or less! ($15,000 x.75% acquisition cost = $11,250 dollars in up front out of pocket cost!)
Successful Entrepreneurs Often Leverage One Potential Opportunity Into An Even Bigger One!
2.) Text book example # two: Now as promised, let’s quickly take a look at how legendary direct response marketing guru Jay Abraham, creatively uses some of his extremely valuable intangible assets, to create some really big paydays, even during some awfully slow times!
However, in order to create yet another post, (in essence) part three!Let’s first back up and go back to a time when Jay was only charging his corporate clients $500 dollars per hour.However, even way back then, he still had the stipulation of a bare bones minimum of three hours!
(Note: Entrepreneur in order to get the full understanding of these particular (potential) marketing strategies and or tactics, you’ve got to be able to see the overall marketing concepts, not just the specific examples!)
That said, way back in the day, when legendary direct response marketing ace Jay Abraham was routinely charging his (ever growing) corporate client base, $500 dollars per hour, with a bare bones minimum of three hours! (As opposed to his eventful corporate rate of $5,000 dollars per hour!Not necessarily including any negotiated back end arrangements!))
(And I’m not sure, nor have I ever heard if he had the same three hour minimum requirement on that particular rate! 😎 ) Any how, as Jay initially moved his office out of his house, (I’m sure that one simple move relieved his wife & kids! 😎 )
And began signing leases and or renting prime office space etc.
Of course he would try and time his moves into better (upscale) office accommodations, whenever the local economy was in either a current and or prolonged economic down tun.That way he could hopefully negotiate better rent/leasing terms! 😎
So let’s say Jay and his growing staff settled on this really nice, unfurnished office space that currently rented for $1,500 per month (or X) or $18,000 per year. ($1,500 per months times a 12 month lease = $18,000 dollars per year.)
He’s the very first way Jay (or you and I) may be able to successfully negotiate the yearly leasing arrangement, during a slow economic down turn in the local economy.
Since Jay’s current leasing budget calls for $1,000 dollars per month, (or X) and or a maximum of $12,000 dollars per year. Jay would offer to consult once per month with the leasing company, (on paper) at his current corporate rate of $500 per hour,with a bare bones minimum of three hours.
And guarantee (in writing) to consult with them, until his proven marketing/cost reduction strategies increases their annual gross profits by an additional $18,000 dollars per year! Or consult with them, until his strategies yield at least that much!
This way they credit his company with $1,500 dollars per month towards his monthly lease obligations!Or if they absolutely insist on Jay having some real equity, (cash) in the transaction.
Since Jay had already budgeted for $1,000 per month toward his monthly office leasing costs anyway, he’d still gladly consult with them once a month, for two hours at a time! 😉
And even though his current corporate rates were $500 dollars per hour, with a stipulation of three hours minimum! They would just credit his company’s lease agreement with the other $500 dollars (or X) per month!
So he’d still write them a cashiers check for $12,000 dollars upfront and they would simply credit his company $500 dollars per month or $,6,000 dollars per year credit toward his lease!
And that’s the very first way he might rent/lease an office space, that his current budget only allowed for $12,000 dollars per year and the actual space cost at least $18,000 dollars a year , or ($1,500 dollars) per month.
Bare in mind, legendary direct response marketing ace Jay Abraham was and is a well established brand in his particular niche. So it wasn’t like he was a green as grass new comer, trying to sell his previously untested marketing/advertising theories to the general marketing place!
Now that we’ve got most of the preliminary stuff out of the way, in part three we can really go deeper! Until then, are you starting to see how some extremely savvy entrepreneurs can consistently generate some really big profits, even during some awfully slow economic times?Say yes!
Now as is customary during this part of our show.
Please share your extremely valuable comments (in the comments section below) that you can apply to your business, product or service in the next 30 days or less!
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It’s true – intellectual capital is your biggest asset. In fact, it’s becoming the most important and profit-producing capital for MANY businesses, even the biggest ones with cash cows.
Bill Davis recently posted…Internet Marketing Muscle Podcast Episode 109 – Internet Marketing Muscle
That is so true Bill!
Apple being a prime example!what a cutting thinking group of
individuals!
I mean, it’s almost as if they get deep inside our collective heads until
that know exactly what we want!
Then then improve upon that then release it!LOL!Thanks so much for stopping by!
Your extremely sound input is always welcome and greatly appreciated!
Mark Newsome recently posted…How Extremely Savvy Entrepreneurs Generate Some Really Big Profits During Some Awfully Slow Times!Part Two