Welcome to this special post on the importance of gross profit margin, co-written by Karl Bryan and Eric Dombach. Use this as you do end-of-year budgeting and forecasting with your coaching clients!
High Gross Profit Margin: The Metric that All Successful Companies Share
All successful companies have ONE THING in common: a high gross profit margin.
Unfortunately, most business coaches don’t even know what that means–let alone how to help their high-end clients in this area.
Simply put, gross margin is sales minus the cost of goods sold. Calculate sales after returns and discounts, and cost of goods sold before overhead like marketing and facilities. The higher the margin, the more fail-proof the business is. Many of the largest companies in the world have extremely high gross profit margins. For example, Apple’s is about 40%, Google hovers around 60%, and Meta (the company formerly known as Facebook) is around 80%.
Gross profit margin is sales minus the cost of goods sold. Calculate sales after returns and discounts, and cost of goods sold before overhead like marketing and facilities. The higher the margin, the more fail-proof the business is.
Want to help your clients improve theirs? Consider these questions:
- Does your client have a $10,000+ product with a minimum of 50% margin?
- If they have that, do they have a $25,000 product with a minimum 50% margin?
- If your coaching client’s business could talk… what would it say to your business coaching client?
- What, specifically, has the owner been ignoring–and what, specifically, needs to be completed?
- Does your client have financial statements (please don’t mistake tax returns for financial statements… it’s embarrassing)?
- If so, are they reviewed (specifically, itemized expenses) quarterly?
- If not, how will they make that (financial statements) happen?
If you don’t know the answers to these questions–and, particularly, what the answers should be, and how to help your clients develop the products and systems they need to succeed, hang tight. My buddy Eric will share some Silver Bullets that can help.
Meet the Silver Bullets that Matter to Gross Profit Margin
Karl is right that the most successful companies in the world have a high gross profit margin–and that one of the best ways to help your clients improve is by teaching them how to achieve it.
Enter the 21 Silver Bullets.
This is a framework I invented years ago, when I knew I needed a more effective way to teach clients basic business-building skills–and to communicate the value of coaching to them.
What Silver Bullets would I use to help my clients answer the questions Karl raised above? Try these on for size:
- Create a Compelling Unique Selling Proposition and Guarantee. If you want to put your clients in a position to be able to create and sell premium products with at least a 50% margin, as Karl suggests, break out the USP and Guarantee Silver Bullet. This will help clients position themselves more effectively in the market by competing on factors other than price. In the process, they’ll learn to create outstanding perceived value that opens the door for high-profit, premium pricing models.
- Update the Current Business Plan. If your client’s business isn’t talking to them, it’s almost certainly because they don’t have a Current Business Plan, complete with cash-flow projections and working capital requirements. Plus, it will provide them all the financial info they need at a glance. If this is a problem, send this Silver Bullet their way.
- Close the Cash Gaps. If your client’s sweating payroll or other expenses every month, even if their gross profit margin is okay otherwise, they have a cash-flow problem. The fix here is the Cash Gap Plan, which takes them through a series of seemingly small tweaks to things like vendor terms and payment collection processes that can pack a big punch. Often, these small things are ignored and neglected, to the great detriment of the business.
- Be Sure They’re Breaking Even. If your client’s in a particularly bad way, implement the Break-Even Plan Silver Bullet to stop the bleeding. This will help them understand exactly what they need each month to cover their costs, so that they can right the ship and put themselves in a position to begin growing again.
This is vitally important work. And now, as the year comes to a close, you have a perfect opportunity to help them get on track to a more efficient, more productive, more profitable business.
Want to see all 21 Silver Bullets in action? Get a FREE 30-day trial of our comprehensive business coaching system and learn what they are–and how to introduce them to your clients and prospects.
I read a Sam Ovens email recently that began with this question: What makes somebody a genius?
What are the constituent parts? The source materials? The causal chain?
Most people think genius happens in isolation. However, evidence proves that “lone geniuses” are exceedingly rare. Genius comes from connection.
A man named Dean Simonton scoured biographical dictionaries for mentions of relationships among 2,026 scientists and 772 artists. Once he collected the data, he started mapping the relationships between them to form a “social network graph” of all the world’s most famous geniuses.
What he found was fascinating. Consistent patterns appeared in the social networks of geniuses.
They all had these things in common: Idols, Mentors, Rivals, Collaborators, Associates, Admirers, and Friends.
Check out this diagram of Sir Isaac Newton’s social network.
Consistent patterns appeared in the social networks of geniuses. They all had these things in common: Idols, Mentors, Rivals, Collaborators, Associates, Admirers, and Friends.
But not all inputs are equal. Geniuses were careful to structure their social networks with only the most talented, smartest, obsessed people. They had no space for negative people who complained.
As the saying goes: “Garbage in garbage out.” Or in this case: “Genius in genius out.” All outputs derive from inputs, your mind is what it eats.
So, what can we learn from this?
The lesson here is to map your own personal social network. Who are your idols, your mentors, your friends, your rivals, collaborators, associates?
Choose them wisely, as their quality will reflect in the quality of your life. Life is too short to spend hanging out with people who complain.
Want to join a social network of successful business coaches and learn from the best? Check out our Rock Star Coaching Program, and learn from coaches who are earning as much as $50,000 per month!
Have you every been to one of these live events where everyone fawns over the most popular speaker that “wows” the audience with his or her dash-and-flash from the stage?
My friend Karl Bryan shared some interesting commentary on these media influencers recently…
Yes, they appear uber-impressive.
But here’s the life these event speakers actually live:
Kiss kids and spouse goodbye.
Leave home with bags and jump into taxi.
Airport lineups and security.
Wait for flight in uncomfortable seat.
Line up to board.
Flight to first layover destination–no first class available, dude snoring next to you.
Wait to exit airplane.
Two-hour gap between flights.
More airport food.
Take a quick social media post on “winning” (be sure to use that crazy Charlie Sheen voice with the quote, “Dying is for amateurs”), making out like everything is totally off the charts, amazing in the video.
Wait for flight in another uncomfortable seat.
Line up to board final flight to destination.
Flight to final city.
Wait to exit airplane while dealing with some serious silent-but-deadly gas going on from someone up-wind of you.
Baggage claim for 30 minutes.
Jump in another taxi.
Lug bags to hotel room.
Unpack and iron clothes for tomorrow.
Crawl into hard bed (alone) with bad pillows.
Find conference room.
Create another social media video on “winning.”
See some “fans” and take some pics.
Wait to go on stage (they’re always running late).
Perform the same stale speech with more video testimonials than actual content…
Close and ask people to buy.
Count “time for money” cash (minus the 50% the organizer takes off the top, plus the costs of flight, hotel, taxi, dinner, drinks, etc.).
Say goodbye and take more pics and “winning” vids for social media.
Now repeat the whole process to get home.
Or, if you’re a really good influencer, continue on for a three- to ten-event tour.
Give Yourself a Better Life
Next time you see the Influencer on social media or on stage, ask yourself: “Is that really what I want? Is this really the right person I should aspire to be?”
Your mileage may vary, but as far as my answer?
Said otherwise: Going the wrong direction enthusiastically is not a great idea.
Going the wrong direction enthusiastically is not a great idea.
Ask yourself: what life do you really want?
What actually matters?
Don’t get caught up in the fake flash of social media influencers.
I learned how to make $500,000 a year as a business coach at home with a phone, Zoom, passion, and some mojo–and I haven’t looked back since.
You can too.
What’s it gonna be, coach?
Business coaching gives you a rock star lifestyle without the hassle. Check out our FREE ebook, Secrets of a Business Coaching Rock Star, to learn how to make it in your life.
When I started out as a business coach, I had very little in the way of professional experience or entrepreneurial acumen. I was low on cash and terrified this wouldn’t work out.
But I also knew that $30,000 a year wasn’t going to feed my family, so I put my heart and soul into building something of value.
Maybe it’s the time of year, when Thanksgiving has me thinking about all the things I have to be grateful for, but I want to share with you the single most important shift I made in my mindset to get over the fear and self-doubt.
It’s something I think about a lot–especially when it comes to working with business coaches who are just starting out. But it’s also extremely relevant for business coaches who are feeling worn down and weary.
And that is this simple reminder:
To forge the future, we must first reframe the past.
Which “Loop” Are You Stuck In?
So often, we spend all our time reliving the failures of the past–which of course impacts the way we create the future. I call this the “doom loop” and it’s near-universal.
To break free, we need to reorient ourselves to the present–with an eye to what’s coming next. I call this the “success loop” and it’s an incredibly important paradigm shift to make.
It starts here: To forge the future, we must first reframe the past.
Let me give you an example from my early business coaching days. As a young man with no business experience, leaving my full-time job as a pastor, I had all sorts of anxieties:
- No professional sales background
- No personal business network
- No business ownership experience
- No P&L experience
- Young and inexperienced
- No money and a lousy car
- No business coaches anywhere in the community
I could have continued to tell myself a story about how what I was trying to achieve was impossible because I didn’t have the skillset or experience to succeed–but I was in a situation where failure wasn’t an option.
So I decided to find the benefits of my situation and focus there instead.
The result? It drove me out of the doom loop into the success loop with just a few simple reframes.
I could have continued to tell myself a story about how what I was trying to achieve was impossible because I didn't have the skillset or experience to succeed--but I was in a situation where failure wasn't an option. So I decided to find the benefits of my situation and focus there instead.
See for yourself.
- No sales background –> No bad sales skills to unlearn!
- No personal business network –> I can completely forge a new identity in the community.
- No business ownership experience –> I won’t be held back by bad experiences.
- No P&L experience –> I’ll be very conservative about money.
- Former pastor –> Good at working with people and sensitive situations.
- Young and inexperienced –> I’ll run circles around the older guys, and see possibilities they’re too jaded to imagine!
- No money and a lousy car –> I’m hungry and hard-working.
- No business coaches anywhere in the community –> I have the space to create a market-driven movement.
Now you try. No matter where you are in your business coaching journey–whether you’re just starting out or you have some hard-won experience under your belt–this Thanksgiving, take the time to reframe some of what’s been dragging you down so that you can move on into a brighter, more successful future.
And if you’re brand new to business coaching, might I suggest my FREE ebook, How to Become a Business Coach? It’ll walk you through the entire process of getting your practice off on the right foot. Enjoy!
Have your webinars become a little ho-hum?
Maybe you’re not pulling in the numbers you used to. Perhaps you’ve even given up, because it’s the usual suspects time after time–existing clients or tire-kickers whose presence doesn’t help you close new coaching contracts.
Yet webinars remain one of the most effective ways to generate business IF you know how to do them right. Follow my simple 4-step formula to get back on track!
Build Your Database
If you’re low on participants, it’s probably because you’re low on prospects. You should always be driving new contacts to your database, because webinars are fantastic at warming up cold leads. Not sure how? Try these tactics:
- Use LinkedIn and Facebook groups to network and connect with business owners in your target market.
- Create a lead magnet, such as an ebook (or even a previous webinar you recorded!) to populate your database.
- Use Facebook or LinkedIn ads to drive traffic to your webinar registration page.
Market Your Webinar Well
Maybe your list looks okay, but your copy just isn’t converting. No problem, I solved that for you. Swipe my proven formula for filling webinars!
The main things to remember are that you should include highly educational, value-added emails as part of your marketing process. Don’t just pitch–educate!
Another way our team improved our show rate from 25% to 40% was to have sales staff pre-call each registrant before the webinar to get to know them better.
Update Your Presentation Regularly
Whatever you do, don’t rehash the same tired content you used last year–or, heaven forbid, last decade. You don’t have to entirely reimagine your presentation every time you host a webinar, but you should be updating your presentation with current anecdotes, stats, insights, graphics, and examples.
Whatever you do, don't rehash the same tired content you used last year--or, heaven forbid, last decade. You don't have to entirely reimagine your presentation every time you host a webinar, but you should be updating your presentation with current anecdotes, stats, insights, graphics, and examples.
If your presentation looks like it was built in 2008, well then…
Crush Your Follow Up
After the call, download the webinar attendance list from Zoom and sort based on engagement. Send the recording to those who asked for it. Conduct your Complimentary Coaching Sessions with everyone who booked one, then reach out to all registrants to invite them to a follow-up conversation.
Most importantly, track your progress over time. Take note of which topics seemed to hit and which messages seemed to convert so that you can iterate and refine your process over time.
Did you know that I have a complete webinar system that you can swipe? It’s only for members, though–so get your FREE 30-day trial in our membership site to see exactly what tools, sales scripts, and templates we use to create killer webinars our prospects love!