3 Hidden Profit Centers

Join Mark Drager in the episode of "How To Sell More" as he delves into untapped profit centers inherent in every service-based business. Mark, known for his insightful expertise, highlights that businesses often overlook revenue streams beyond their primary offerings.

Key takeaways from this episode include:

• ‍Expanding Profit Horizons: Recognize and capitalize on multiple profit centers besides your core service.‍
• Monetizing Expertise: Discover ways to convert specialist knowledge into a profitable educational resource.‍
• Efficiency and Scalability: Learn the techniques to amplify scalability and efficiency in your operational model.These insights provide actionable strategies that can be directly implemented into your business operations.

In today's dynamic business environment, understanding and leveraging all potential profit avenues is crucial for sustained growth and resilience. Tune in to broaden your business acumen, uncover concealed profit avenues, and navigate the complexities of the business domain. Embark on your journey to diversified profitability.

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Links to This Episode

• Apple Podcast
• Spotify
• YouTube
• Audible

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Key Takeaways

• Understanding and Capitalizing on Service-Based Profit Centers - Unlike manufacturing or infrastructure-based businesses, service-based enterprises thrive on people-driven models where clients pay for tasks performed or expertise delivered.
• The Power of Leveraging Expertise beyond Service Delivery - Businesses with specialized skills, such as branding agencies, not only provide services but also possess valuable knowledge that others might want to learn.
• The Importance of Scalability and Efficiency in Service-Based Models - Due to the dependency on human effort for every task, scaling can be challenging, unlike product-based models where one product can be sold multiple times.

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Top 3 Reasons to Listen

Unlock Hidden Revenue Streams: Discover ways to identify and leverage unseen profit centers within your service-based business.

Monetize Your Expertise: Learn strategic ways to turn your specialist knowledge and skills into a lucrative educational platform.

Diversification of Profit: Find out how to diversify your business profit by exploring alternative revenue streams, mitigating risks associated with dependency on a single income source.

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More About our Host, Mark Drager

AKA the Badass Brand Architect, 5th Generation Entrepreneur, Host of The How To Sell More Podcast

When he's not podcasting, Mark's the Co-Founder & CEO of SalesLoop. He's a dedicated husband to his high school sweetheart, Jacqueline, and a proud father of four.

Mark didn't follow the typical route to becoming a sales & marketing expert. A connected figure in the entrepreneur community, Mark provides listeners with a unique mix of wit, insight, and straightforward advice.

Some of Mark's unconventional adventures include commandeering a Boeing 737-800 for a day, facing harsh criticism from a billionaire, and shedding 70 lbs in his late 30s. Though he never attended college, Mark stands as proof of the might of maintaining a student mindset and being ever-ready to seek assistance.

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A Transcription of The Talk

Mark Drager: So, if you have a service-based business, if you are a retailer, if you are a specialist, if you are people-driven, if you're the type of company that maybe makes something for people, does services consulting, done-for-you services, you essentially deliver something, and it's based on people doing it, not manufacturing, not infrastructure, not necessarily real estate investing or things like that. But if you are the type of company where, at the end of the day, you do stuff for people, and they pay you for it, there are three profit centers that exist within every type of business like this, every type of service-based business, and funnily enough, most companies are only aware of one of them.

And so today, I want to break down the three different profit centers that exist within every service-based, people-driven type of business to see if maybe you're leaving money on the table, and to maybe give you a few fresh ideas for what others are doing in the marketplace.

Now, a few years ago, I joined a private mastermind group that was focused 100% on real estate investing. It's a private group. It's all real estate investors. But it's not just real estate investors, not people who buy and flip homes or do wholesale or do all of these other types of strategies. But these are people who have actually become influencers. They've become coaches, they've become educators, they have training products, they sell info products, these are the types of people that you might see on, you know, Facebook ads, or YouTube ads. They're getting you into the program because they want to teach you what they know, they want to coach you through the deals, and they want to help you make money. And they happen to make money alongside doing the same thing.

So, I joined this private mastermind group. What's interesting is I'm not a real estate investor, very few of our clients are real estate investors, we do a lot of work with pension plans, and we do work with institutional lenders and property managers and asset holders. And so I understand the space. But what has been most interesting to me as I've gone into this group is they operate, it's just so different from the way that I've generated business.

In the past, I've run since 2006, a service-based business. People come to us because they have a challenge or they have a need. We are specialists at something, and we're going to help them overcome that challenge or need because we have a framework, we have a process, we have an approach, we have the right people, we have the right experience, we know what we're doing. If you sell enterprise software to large companies, it's the exact same thing, it's always the same thing. Someone has a problem, we happen to have a solution, we're going to right fit it, and you're going to pay us to do it, to make it, to fix it, whatever it might be.

And so we all focus on this, we focus our lead gen on this, we focus our sales on this, we focus on this because done-for-you services are the way that every service-based business is built. It's a revenue stream, but often you're going to pay me, client prospect, you're going to pay me, and I'm going to do the work. And so we're always hunting, we're always searching, we're always trying to get the next client, get the next retainer, get the next project, get the next engagement, whatever it might be, especially I mean, if it's a year-over-year work, that's fantastic. If it's recurring revenue, that's fantastic, but it's not passive. It's not like we can just sell it once and then not have to worry about it again, it's not like we can just take care of it once and then build it once and then sell it a million times to a million people.

So there's not a ton of scalability within this business model aside from finding efficiencies, being able to find increased productivity. And then, basically, build up human capital, build up, you know, AI will help us, systems will help us, tools will help us, but we essentially need to make sure that we're always delivering on the work that we're doing. I don't want to downplay that. That's amazing. I mean, that's, that's a really great way to build business.

But there's these other two profit centers that I've been learning about as I've gotten into this real estate marketing group, which, again, people like, "Why are you part of this group? These aren't your clients?" It's because they're exposing me to different ways of marketing, different ways of selling, and different ways of thinking about the business.

And so, profit center number one, not to beat a dead horse, but profit center number one is the done-for-you service or the done-with-you service. That's amazing. Now, the second profit center that most people overlook is if we are specialists, if we know how to do something, I own a branding agency. We help seven and eight-figure business owners in the B2B space. We help them sell more, we help them figure out who they are, right? So we have specialists in something, and if you are in this space, the next step, which most people overlook is, I can teach people how to think the way I think. I can teach people how to do what I do. I can teach people, you can teach people, and this is what this Real Estate Investment Group has done so well.

They realize that the last 10-15-20 years, they have all of this experience. Some of the people in this group have done thousands and tens of thousands of deals. They have a ton of experience, and they have to stay on top of all the legislative changes. They have to stay on top of finance changes and what's happening in the marketplace, and they know their stuff. Do people come to them and pay them to learn what they know, to shortcut the amount of time it would take them to learn it the hard way or make the mistakes?

And so we do this in content marketing, right? We're writing blog posts, we're putting out podcasts, we're on YouTube, we're teaching clients, we're teaching people stuff. But think about this in your business; there could be an entire profit center that focuses on teaching your prospects or your customers, and even teaching maybe the people who are not ready to be your customers yet but are still hungry. You could create courses, do workshops, do lunch and learns. You could do all kinds of things, but you can create info products, you can create courses and great guides and great downloads, you can be a consultant and come in and do these workshops that could be high ticket, but more importantly, can bring you recurring revenue.

These are ways for you to think about your business. Well, rather than just doing the work, you start to share the little secrets, here are the approaches, and teach people how to do what you do. This could be your competitors. Even, what's the harm in teaching people who are a few years behind us, and finding the really sharp, smart ones, and then maybe acquiring them, or maybe keeping your eye on them, or maybe poaching some of their best talent to feed into your company. Teaching is an amazing profit center, where you can start to create products that can give you recurring revenue, that can give you passive revenue because you can build it once and then sell it forever.

Now, it's not easy. I'm not suggesting you just jump into this because every new profit center requires its own go-to-market strategies, its own brand, its own team, its own approach. It's like you're setting up a business within a business. But it doesn't have to be complicated. It doesn't have to be huge; it can be something really simple. And quite frankly, this new profit center could totally shift and change your profit margins. It can help you balance out, if you do not have a recession-proof business, perhaps the people who will be buying these teachings or these lower-end products, or whatever it might be, may help you recession-proof your business.

And on top of that, if you structure this properly, you can actually use this revenue to help liquidate your cost of acquisition for your leads. So think about this: let's say that you work with a certain type of client, a certain type of prospect, and it's only one out of ten people who you connect with who's actually a really good fit for what you do. What are you going to do with those other nine out of ten? You're going to kind of send them away. But if you were able to create a lower-ticket offer or something for the people, the nine out of ten who are not ready for you, they're not big enough, they're not smart enough, whatever it is, they're just not ready for you, maybe three or four out of that ten, though, want something and they need someone to help ladder them up, you could create a lower-end product, you could sell that product to those people.

And then you could use that revenue to help compensate or cover or liquidate the cost of getting that one in ten. These types of strategies are what online digital businesses are built off of. And so if you have this online digital business, you have to be good at this. Many people who have traditional businesses or more conservative businesses, especially in B2B, do not operate this way and do not think this way. And so I'm not telling you to change your business; I'm telling you that somewhere in the middle is the most amazing overlap, because the digital businesses tend not to have systems and the people in the operations and the experience, and they sometimes can kind of be accused of selling air, they can be accused of what's that term, snake oil, right, like the snake oil salesmen. Sometimes people can be accused of that. Not everyone's like that by all means; the group that I'm a part of is not like that.

But I'm amazed that people who, like me, have built more traditional, let's say service-based businesses, are not aware that these other things exist. And so just think about what you can do in your business to be able to teach your prospects and your customers, maybe even your competitors, how to be more like you because it will level up your credibility, it will help bring additional recurring revenue. And it may either be the revenue you need and the profits you need to build new things or to help compensate and cover some of the higher-ticket things that you're already doing. So number one, done-for-you services, we're all doing that. Number two, you can make money teaching people what you know. And number three, you most likely have a really amazing network. And people want access to that network, or they want access to a really well-curated community.

I'm talking about masterminds. I'm talking about networking, I'm talking about special invite-only events, or a tiered system, maybe within your business or teaching. Or frankly, maybe you can become known as someone who is a connector who is really great at having that network. Because here's what people will pay for: they will pay for us to do their work for them, solve the problems for them. They will pay for us to teach them how to solve their problems. But there's also this extra group of people who will simply pay to be connected to the people that they need to be connected with. And especially as business owners, especially as entrepreneurs, the idea of pay-for-play, the idea of putting you in the right room around the right people so they can have the right breakthrough, that's so valuable.

And so when you consider what you can do from maybe a private workshop point of view, what you can do from a mastermind group point of view, what you can do to connect the right people around a dinner or have a conversation, there is revenue, there are profit centers, just sitting there waiting for you to take advantage of. Now, if you want to be crazy next level from a client experience point of view, consider the fact that not everyone wants all of these things. But some of your customers may, in fact, want you to do the service for them; they may not want you to just go away, do it, and come back. But they may want you, they may want to be involved, they may want to be a part of the process, part of the system, they may want to learn as you go through it. So you can teach them that. And once they become your customer, perhaps they're already connected to a great network, perhaps they get access to a private Facebook group, or they get access to a new group.

And so maybe these aren't individual profit centers; maybe these are three things you're going to start doing to help strengthen your value proposition. Regardless of what you do with this information, I want you to consider over the next 12-18-24 months if there are things that you can build to help bring in more revenue, recession-proof your business, and frankly, expand the way that you think about what you sell. The other great part of putting out courses or info products or digital products, which is the teaching. The other great part about being part of a private mastermind or private group or private network, which is the connecting point of view, is that others can sell this for you. Chances are your main services, your main done-for-you services, you need to own the sales process of that, maybe you're selling through distributors or other things. But every client I've worked with who sells through distribution or distributors requires real control over their network.

And we need to be able to give them the stuff and do the making easy for them and make sure that we're pushing number one and all of those things. And so it's still a lot of work. So you have to be responsible for selling done-for-you services at some level, but the teaching and the connections, you can partner through joint ventures, you can find people who are experts at this, you can consult your affiliates because once you've created the idea, created the concept, or created the content, it can be sold over and over and over again. It can be tweaked for multiple audiences. Frankly, I had dinner a little while back with someone in this group. And they were a pastor, a pastor with like 5-6-7 kids in rural Tennessee, I think, or Kentucky.

And they had said that they had never made more than like 28 or 30 grand a year as a pastor, and they spent a lot of years struggling, I think this person is in their 50s. Now, he'd been in real estate, he decided to put together a course. And this man cares, this man cares about the topic; he cares about the course; he cares about his students. And last year, he did a million dollars in revenue. That is dramatic. That is a massive change to his family, to his community, to his life. And that came from teaching, helping people who want to know what he knows to do what he can do. And so being a part of this group has really opened my eyes to how stuck we get in our ways of what we sell, how we sell, and what we do. And I just want you to consider if maybe there's a better way out there.