This article has to do with a concept I have learned from a true master and is called incremental profit. It is a key principle behind the power and leverage of joint ventures. This idea will be thoroughly explained during this presentation. First of all, I want to use an example I heard from Robert Kiyosaki of the Rich Dad, Poor Dad book and CD series. Robert says business is a team sport and I totally agree! I have seen so many people, myself included, who try to go it alone and grind it out when there are far better ways to leverage your time, efforts and energy!
What I learned from this master in the field was how to set up joint ventures or strategic alliances, same thing, and incremental profit is a key reason for doing this. So what is incremental profit and why should you add this to your business toolbox?
All of us know people others don’t know. All of us have one or two, perhaps three areas of strength or genius others don’t have and vice versa. One of the biggest myths we all hear is to work on and develop our weaknesses. Well, even if we do, we are still only reaching mediocrity! As an example, I am not what you would call “Mr. High Tech” nor do I want to be! My gifts are in developing rapport and teaming with others, creating value and connecting people to each other. These are things that make my motor run and I am very passionate about! Why should I make myself insane trying to learn all about high tech when my solution is to team up with someone who is already there, trade skills and work out a joint venture? Yet I speak with people all the time who think they have to learn every piece of high tech for their business to be successful. They are wasting time, effort, energy and most important, their life juice! Team up with someone who is already good and stop playing the lone wolf!!!! Business is a team sport!!! This is the mindset you need to develop if you are going to get ahead in your business!
Now, let’s discuss incremental profit and how it can and will leverage what you are doing with your business. Here are some examples in easy to understand ways that you can apply right away.
So many people, ie, lone wolves, want to have all the profit all the time and that is a limiting mindset that will hold you and your business back! Learn to be a deal-maker and connector with others so it is win-win for everyone!
Here is a key question you need to ask yourself as you start your journey toward incremental profit. Who do I know that has a variety of contacts within their business? How can I add value for that person as well as their business contacts? You are looking for business people who possess the qualities of speed and dependability as well as those you already have rapport with.
Emphasize you have a way to help them become more profitable without taking away from what they are currently earning in their business.
Here is how incremental profit can work for them and an explanation of how not all profit is equal.
Let’s say we use an example of a business that has set expenses of $1000.00 per month. This number is just for demonstration purposes so please follow along. If your business made $1500.00 that same month, your profit would have been $500.00 which is $1500.00 minus $1000.00 set expenses. If this same business were to joint venture with you and produced more value and sales to their clients of $1200.00 and split it 50-50 with you, they would add $600.00 to their bottom line and so would you! Now, your business connection made the $1500.00 gross plus an additional $600.00 of pure profit. Their overall profit would be $500.00 plus $600.00 or $1100.00! Do you think they would be open to that?
But Tim, would if they are afraid I may take their clients? They don’t even have to ask this question but you assume they may be thinking this as they revert to their “lone wolf, them against the world ways.” You say to them, “look, I am in this for the long run in ways that will help both of us. I am not Congress or Wall Street trying to rip you off!” It would make no sense to sabotage a good symbiotic relationship and our friendship where we both benefit and lose the future opportunity to do more deals with you and some of your business contacts. Remind them, none of us are selling a service or a product but a feeling, state or mood. Our relationship is the most important issue here!
Now imagine we repeat this process in additional creative ways and your business contact makes their monthly $1500.00 or $500.00 profit plus $600.00 more incremental pure profit, a second deal nets them another $500.00 and a third deal brings in $700.00 for them. As I add this up, their profit went from $500.00 per month to $2300.00 monthly!!! Do you think they may be interested in speaking further with you and if we painted this picture?
My role in this process is to help you connect with others as well as assist you and them with working “on” their business. Joint ventures, with their incremental profit, are great ways to do this!