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One Thing: Day 24
Day 24: Maximizing Contingency Deals and Business Models
Ok, so I forgave my Pug for peeing on my office floor last night. I love her dearly so she could crap in my mouth and I’d be OK with it. That would be horrifically gross and I hope it doesn’t happen…
Hopefully ‘The Secret’ isn’t really ‘The Secret’ and I won’t live to regret thinking that.
Here are my two spoiled office buddies, Fabby and Bella so you can see how cute they are.
Yesterday, in my ONE THING series I was explaining how contingency deals need to be structured and the mistakes coaches make when setting them up.
Today I’m going to talk about a pet topic of mine. Something I’m insanely passionate about and has been very good to me.
And making your coaching clients bucket loads of money so your contingency / royalty deals actually matter.
Every month I earn tens of thousands of dollars from contingency / royalty deals I did years ago. Zero time outlay and the money flows passively.
A business model could be described simply as the company’s plan for deriving a profit.
If you asked me “Karl is this a good business for me to start / join / buy?” Or maybe your question is “Karl, is this a good niche for me to build a coaching business around?”
Not surprisingly MATH will play a huge part.
Regardless of the industry, my first question for you would be “Show me the recurring revenues / repeat sales.”
If there’s no obvious and immediate path to recurring revenues / repeat sales… then my recommendation is keep looking.
The second (amongst many others required) question I’d ask you… “what is the unit of sale and approximate profit margin on that unit of sale?”
An example that happens every day is the guy / gal chasing the dream of millions of dollars in their pajamas selling $50 junk on Amazon.
When you stop driving traffic the sales stop. You’re buying ads in most cases to your $50 product with low-profit margins.
Low unit of sale combined with low-profit margins… equals bad business model. Lotsa work, very little money and frustrated business owner wondering why the others are making so much coin.
The guys selling you “get rich selling $50 crap on Amazon” make 90% of the money.
Becoming a realtor is a bad business model for different reasons.
I can help a realtor better than almost anybody (hint: buy and sell homes / condos where you can add a bathroom and a toilet. I’ve got lots of other Jedi tricks to dominate local real estate but that one alone is a total game-changer when properly implemented).
Doesn’t mean I’d recommend becoming a realtor.
There is no recurring income / repeat sales, therefore done in a traditional manner it’s ‘a promotion’.
Not a business.
The guys selling you “how to make millions in real estate” and creating the realtors (RE/MAX) make 90% of the dough.
An example from our coaching space is the coach that starts up and gets the sage advice from “the guy coaching the coaches” and goes into the niche of “grief coach” … everyone agrees it’s a fantastic idea because she / he lost a loved one and really ‘gets it’.
The WHOLE idea behind the business of a ‘grief coach’ is to get people OUT OF GRIEF… therefore success means you lose your client and need to find a new one.
Then lose them too. Career coaching is the same.
Coach is trying to build a business…. Finds paying client their dream career (have success) and then lose the client and have to find a new one.
Ummm…. Please stop it. If want to make your clients a ton of money and earn contingency / royalties here’s what I was fortunate enough to learn at a young age.
Your clients need to create a business model that has recurring revenue, repeat sales and creates VALUE (what you build up and sell one day).
You have a coaching client that builds $50,000 swimming pools for a living.
He refuses to sell chemicals because it’s too difficult with secretary, dispatch etc…
What your coaching client fails to realize is that ALL THE REAL MONEY and real “VALUE” (what you build up and sell one day) is in the recurring chemical sales and servicing the pools.
Ideally, he should do both… but if you have to pick one, you’d do the chemicals and servicing of the pool.
Building pools is a PROMOTION that has no real value (will sell for exactly $0)…. Selling chemicals and servicing pools is a BUSINESS with repeat sales that can be built up and sold.
- I’d give you the printer for free to sell you the cartridges.
- I’d give you the coffee maker to sell you the coffee.
- I’d give you the keg to sell you the beer.
- I’d give you the phone to sell you the plan.
- I’d give you the razor to sell you the razor blades.
- I’d give you the dog to sell you dog food (plus health checkups etc…).
- I’d give you the Dr’s appointment to sell you the drugs.
And of course, you don’t have to give them the ‘coffee maker’… but I do that to show you the extreme level I’d go to lock in my recurring sales.
There’s a good chance you’re coaching client has this arse backwards and when you help them create a proper business model… the money will start rolling in.
Your contingency deal can actually mean something.
Good news: Business Coaching is an AMAZING business model and that’s why I chose it many years ago.
As your coaching client grows, takes on new staff, new clients, new products / services, etc… they end up with new and more problems as they move along…. Subsequently, need you MORE and will be willing to pay you MORE.
I’ve had coaching clients pay me monthly fees for over ten years. No breaks or holidays asked for or needed.
Plus, it’s easy to sell as “money at a discount.” If I had a $20 and you had a $10… and I asked you to trade.
Once you worked out I wasn’t full of poo-poo (I created ‘certainty’ in you), you’d make the exchange, the $10 for a $20, in a heartbeat. If you missed out you’d be pissed and if you made the exchange you’d ask for a second go-round.
That’s how you sell business coaching en masse… frame it up as ‘money at a discount’ (create certainty with your coaching prospect) and the business owner won’t say no.
You need less than 6 clients at $1,500 per month to hit $100k per annum, RECURRING.
Plus you can do it until you’re 90 years old.. or at least until the bearings go and then we’re our kid’s problem.
It’s FUN, you learn a lot and great way to build a career around “giving back”.
If this was helpful please send this email to someone that you think would make a great business coach. They can subscribe to my magazine, for a limited time, at no charge.
Luckily, I’m getting a LOT faster creating these posts… but I need to make them shorter!! Lol
Share this bad boy on social here.
Tomorrow, I’m going to explain the secret business model to Billion dollar unicorns like Uber, FB, LI, eBay, Amazon, etc…
Obsessed with your business coaching success,
PS. Forward this to someone that’ll make a great business coach and they can get a, limited time, complimentary subscription to my magazine here:
PPS. Six clients at $1500 per month is $100,000 per annum career… it’s really not that hard.
Get out of your own way and help someone like you would a loved one.
Read more from the One Thing Series