ENOUGH! There are only (3) Ways to Make Money - Everything Else Is Noise...

Is anyone else getting tired of the deluge of IM products out there, none of which teach people basic business fundamentals?

The first thing that is getting to me is that you ask the average IMer what it means to "make money" and chances are they can't break it down to the core fundamentals......

First, it seems to me that a lot of people are
a) Just assuming that revenues=profits

b) not accounting for hidden costs (example labor costs which need to be factored in if you are going to scale because you can't do it all yourself...)

Where is the good old Business School 101 IM MBA Course that really needs to come out?

By that I mean:

Profits= (Revenues) - (Costs)
Revenues = (Price)*(Quantity)
Costs = (Fixed Costs) + (Variable Costs) (or average total costs)....[an important distinction that can make or break a business]
Quantity= # of units sold = (visitors)*(conversion%)
Visitors = Unique Visitors + Returning Visitors




If you are paying attention to that formula you can see that there are OBVIOUSLY ONLY (3) Ways of making money:

a) You can increase your prices (assuming costs stay constant)

b) you can increase the number of units sold by either making repeat sales to returning visitors or new sales to unique visitors (again, assuming costs stay constant)

c) you can decrease your costs (here, assuming revenues stay constant)

All these gadgets and gizmos promising the stars....widgets this, super automation tool that, "outsourcing secrets" this, autoblog this, miracle content ebook that...it's just a distraction!

My advice if you are a newbie (or vet, as we all can learn something new..) reading this is to sit down and really get to understand THE BUSINESS FUNDAMENTALS of your website or niche.

One reason why I say this is that I was on a call with someone who was doing $1M a year without knowing some of this stuff - when he finally got it, he DOUBLED IS REVENUES in 3 MONTHS.....

Start understanding how you can
a) Increase your prices (if you sell your own product look at adding value, if you sell traffic i.e. you are an affiliate, look at asking for higher payouts...)
b) look at how you can increase your # of units sold (by doing follow up sales to returning customers or converting more unique visitors...this right here is HUGE)
c) understand the major COSTS of your business and look at how you can decrease them (alot of times the biggest cost is all that "free" time you spend doing work yourself....if you are doing work yourself that could be outsourced at a tenth of the cost you won't be able to scale your business...similarly, if you have not mapped out the proper business process for your organization, you won't be able to determine what you need to automate...)

Just to reiterate,

Making Money= Maximizing Profit.

To maximize your profit there are only 3 variables you can push or pull....
a) prices
b) quantity or # of units sold
c) costs (now the difference between fixed costs, variable costs and average costs!)

So the next time you go to buy something or have something presented to you or find yourself spending time doing something,ask your self the (3) fundamental questions...
1) Is this going to DIRECTLY help me increase my prices?
2) Is this going to help me increase the number of units sold?
3) Is going to DIRECTLY help me decrease my costs? If it is, is it going to help me decrease my fixed costs, my variable costs or my overalll average total costs (this is a subject in and of it sell but all those people chasing "free" traffic need to get the fact that it really ain't that free.....casual language done on purpose, btw....lol)


I really hope this helps someone. Sometimes, it just takes someone taking the time spell things out in simple form to really getting - and not a WSO either....LOL