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Without Profit, You're Dead
Monday, November 25, 2024
Michael Smith
No matter how much revenue your business or mine generates, if we don't turn a profit, we'll be going out of business.
Successful businesses are profitable businesses and it's better to have BIG profit margins instead of razor thin ones.
Unfortunately, some industries have small margins and some businesses are burdened by factors that keep profits low.
When that happens, the business owner is disappointed with the amount of money that is left over after paying expenses.
Research uncovers the ugly truth
According to a 2023 research study conducted by the U.S Federal Reserve Banks, 56% of small businesses suffered a loss in annual revenue compared to the prior year or closed the year with no profit at all.
This means more than half of small business owners feel the pinch of shrinking revenue and cash.
If sales shrink to the point where there's no profit - or it gets worse and the company begins to experience a recurring loss - cash flow and cash reserves become a major concern quickly.
A US Bank study showed 82% of failed businesses cited cash flow problems as a factor.
A recent Forbes magazine article stated research that showed business owners feel heavy physical and mental stress, financial strain, and emotional isolation caused by the many demands of keeping a business healthy and profitable.
Like anyone else, business owners want better things for themselves and their loved ones. They want their companies to thrive and for their lives to be the best they can be.
Because of that, they put a lot of pressure on themselves to produce the income and cash flow that's required.
That's why a lot of business owners look for new ways to grow revenue and - more importantly - profits.
Where to find BIG profits...
If you're a business owner looking for a way to put more income in your pocket without a lot of risk or extra work, why not look into cross-industry expansion?
Cross-industry expansion is a winner when the profits are BIG.
Cross industry expansion is when an existing business expands outside of its core industry and begins offering products or services from a different industry.
Companies big and small do it all the time.
Here are a few examples:
- Apple: Expanding from computers to handheld devices
- Nordstrom: Expanding into coffee shops inside their stores
- Transportation Company: Expanding into logistics services
- Fitness Center: Expanding into chiropractic care
- Insurance Agency: Expanding into mortgages, home equity loans, and reverse mortgages
- Auto Body Repair: Expanding into rental cars
- Disney: Expanding into theme parks, cruise lines, and streaming services
- Walgreens: Expanding from pharmacies into health clinics
- Home Depot: Expanding into installation services
- Target: Expanding into groceries
This list goes on and on.
If you have a database of clients, cross-industry expansion instantly gives you something new to offer them.
6 things that affect your profits
Not every cross-industry expansion opportunity has big profits.
Big profits require 2 things:
#1. A big ticket sale or big commission. In other words, large gross revenue per sale.
#2. Big profit margins. Meaning, low expenses compared to gross revenue.
Here are 6 things to consider that will drastically affect your profits:
- The costs to enter the industry. If a large investment is required upfront (relative to the commission from one sale), it could take a long time and a lot of sales to turn a profit.
- The costs to run it. If the fixed monthly, quarterly and annual costs are too heavy, it can run the company into negative cash flow.
- The complexity to run it. If it is difficult or complicated to run, you will likely have to add more staff, causing your expenses (and frustrations) to increase.
- The costs involved with a missed sale or sale that does not close. Some products and services have a cost associated with missed sales or with prospects who say "yes" but later can't close for one reason or another.
- The costs involved with a closed sale. Some products and services have costs associated with fulfilling the order.
- Potential risks that could wipe out all of your profits. Some industries have inherent risks that, if not avoided, one mistake could wipe out an entire year's worth of profits (or worse).
If you cross-expand into the right industry, you won't have these problems. It will be easy, and you'll break even or turn a profit with your first one or two transactions... basically making it risk free.
Is this for you?
Here at Mortgage Systems USA, we offer non-mortgage business owners a complete, turnkey profit center in the $1.4 trillion mortgage industry.
Zero mortgage experience is needed and you don't have to become a mortgage expert.
For insurance brokers, divorce and probate attorneys, trust and estate planners, tax professionals, financial planners, real estate brokers and agents - this is the ideal cross-industry expansion.
You make extra income by offering mortgages, home equity loans, and reverse mortgages to the people who already know, like, and trust you - your clients, sphere of influence, business networks, and social media audiences.
Here are some of the reasons why the profits are so BIG:
- The cost of our program is low compared to the commission checks. For that reason, the payback on our program is fast. Your initial investment is typically returned with the first 1 or 2 sales. It's remarkable.
- You won't need to hire any new employees. You can run it with your present staff because the lender, processor, title company, and closing agent do most of the heavy lifting, for free.
- You won't have additional management headaches or frustrations because the program is dirt simple to run.
- You don't need a new, separate location. For most states, you can use a section of your retail, commercial, or home office for your new mortgage office.
- You are able to generate inbound inquiries for little or no cost. No cold calling strangers or calling your database is required.
- There's virtually no downside risk because your client base and networks are already applying for and getting mortgages, home equity loans, and reverse mortgages.
- It taps into a hidden market because it brings in money you never would have had... You keep running your business the way you always do and our program runs along side it at the same time.
- It works anytime of the year. You run it all year long and it never wears because people need mortgages year-round. It works with a booming economy or a slumping economy.
How big are the commission checks?
Your average commission on a mortgage will vary based on the loan amounts in the areas you serve.
My mortgage company is in Macon, Georgia and my average loan amount is around $250,000. My average commission check is about $5,700.
My business partner Brian has a mortgage company in Irvine, California. His average loan amount is around $750,000 and his average commission check is about $16,500.
No matter where you're located, the commission checks are large.
How much profit will you put in your pocket?
Let's say you have 1,000 clients who already know, like, and trust you.
You join our program and start offering mortgages to your clients.
Let's say that 50 of them get a mortgage from you every year.
And your profit from each is $3,000.
You just added $150,000 a year in profit - without adding a single new client.
Even if you only did 10 of them a year, that's an extra $30,000 a year for you to put in YOUR pocket.
Want to learn about making killer money by offering mortgages, home equity loans, and reverse mortgages to your clients?
The program I'm talking about is called the Mortgage Facilitator and if this sounds interesting to you, click the button below to learn more.
References:
1. U.S. Federal Reserve Banks: https://www.fedsmallbusiness.org/reports/survey/2023/2023-report-on-
employer-firms
2. US Bank: https://www.fundera.com/blog/small-business-statistics
3. Forbes: https://www.forbes.com/sites/melissahouston/2023/05/31/the-impact-of-mental-health-on-business-owners/
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This is not legal or tax advice. Consult your attorney about legal matters. Consult your tax professional about tax deductions. Consult state licensing authorities about licensing matters. Earnings and income statements are estimates based on our experience. There is no guarantee you will achieve similar results. Any earnings or financial benefits can vary based on your individual circumstances, skills, and the specific actions you take. You should always conduct your own due diligence before making any financial decision.
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