The keyword here is LEVERAGE.
For every business to grow you need to leverage on others. You have only so much time to work in a day. On average most of you will work up to 8 hours right? What if you can leverage on other people’s time and energy to do the work for you.
Let’s take an example of a business.
A Boss spends 10 hours a week in for marketing. In 10 hours he can bring in 5 clients. Each client he can close up to $300 in sales.
So he hired 5 part time or freelance staff to do 2 hours each. Each of them are paid based on commission of 30% each.
Then he spend $300 dollars in advertisement which on average can bring in another 5 clients per week.
See the maths..
Boss - 10 hours – 5 clients – 5 x $300 = $1500
5 staff or Affiliate – 5 x 2 – 10 hours. – 5 clients – 5 x $300 = $1500
Advertisement – 5 clients – 5 x $300 = $1500
Commissions: 30% of $300 x 5 = $450
Total cost: $750
In total the whole business still makes – $4500 – $750 = $3750
The point here is not just about the profits. Well I know you want to see how the money is made but what’s important is the work done and time gain by the people who can help you and the tools that you can leverage on.
As you can see, instead of you working 30 hours for the 30 hour income, you only need to spend 10 hours. The other 20 hours is leveraged on the staff and advertisements. Don’t just expect people to do it free for you. Pay them good and they will do a good job for you. And that is how you can get quality results too.
Hence setting funds for marketing is an important part of running a business. So that you too can start paying for Leads like what I am doing now for this $1 Affiliate program.
How much to set aside?
Most experts and even our Mentor Sujimy Mohd says that we need to set aside at least 10% to 20% for marketing.
All the best! Don’t spend all the money you earn. Yah. Split it up into different portions for different purposes. To know better to manage it, please ask our Mentor Abang Abu how to manage your money.
Till next Time….