“The only true measurement of business success is the trend of your company’s cash balance when properly measured.” – Steve Pohlit
So far, you should have a clearer understanding of the inner processes you must develop to lead a profitable business. You’ve also started to build a customized plan to carry your specific business to its goals. It’s imperative that you also have a system in place to track your progress, to constantly stay on-track and know when adjustments are needed to keep moving forward.
This is a solid part of the system I’ve named my “Gold Formula™” We’ll expand more on the meaning of this term in a later chapter.
For now, you need to know that the main thrust of my “Gold Formula™” is that the gold is in the variance!
Your success is measured by the variance from your plan. Understanding your variance brings everything into much better focus and provides you with full control of the rudder as you steer.
My trademarked Gold Formula™:
Plan minus Actual = Variance
Understanding this equation is the key to keeping your business on track for rapid growth of 30% or more in 90 days or less. It also guides you down the path of achieving prosperity in all three pillars of life: health, relationships and money.
These pillars hold the structure upon which you’re building your plan firmly and concretely. Without success in all three pillars, any good business plan is sure to fail at some point.
Here are a couple of easy-to-follow examples:
Example 1: In the area of health, many people today think about losing weight. Let’s use The Gold Formula™ System for doing that.
First: Define the goal in very positive terms. “I am now renewing my energy and overall health with a healthier lifestyle that results in my ideal weight that is (for example) 30 pounds lighter than I am now.”
Second: Design a plan to reduce caloric intake by 500 calories a day or a combination of 250 calories less in consumption and 250 calories burned by exercise. This plan is designed so that my weekly calorie reduction is 3,500, which is the approximate equivalent to one pound. I now see that, if I stick to this plan, I’ll be at my goal in 30 weeks – or a little more than half a year.
Can I do this? It’s now clear that I can. Is this important to me? Yes, it is. But, do I have a big enough “why” to take consistent action on the plan? This is essential to moving forward and staying with what is required to reach your goals.
Maybe your “why” is because you don’t want to risk having to see a doctor or – worse – to have to go to the hospital. Maybe your “why” is you’ve let yourself go a bit and you don’t feel you’re doing your part to be the best you can be for your spouse or children.
All of us have to look for that truly motivating “why” or we run the risk of not sticking to the plan.
This might seem too simple to work, but consider that one of the major reasons for failure of any plan is not sticking to it. Your motivating “why” is both a gyroscope and an engine keeping you moving down the surest path to success.
Part of the plan may include finding pictures of people who are in shape, to reinforce how we intend to look. Our plan will also involve telling a couple of close friends or loved ones what we’re doing, for emotional support and accountability along the way.
Our plan now becomes more specific as we build out the sub-steps within each step. What exactly are we going to do differently that will result in consuming around 250 less calories and burning 250 more calories each day? Our plan would need to include our adjustments to our diet for those days we’re not able to exercise and, likewise, for those when we exercise more.
Our plan won’t include a day off, because we’re adjusting our lifestyle, not “going on a diet.”
Third: Keep a special journal for this lifestyle improvement program. This is how we begin to measure the actual results in comparison to the plan. For example, we might plan to stop drinking sugary soft drinks or skipping ice cream or reducing some other food or drink that’s contributed more calories than fit into our plan.
Every day, we calculate how well we’re doing according to the plan. If we reduced our calorie intake by 300 calories and our plan was a 250 calorie reduction, then our variance was minus 50 (250 planned minus 300 actual = -50). A negative variance in this case is good because we ate and drank 50 less calories than called for in our plan. If we planned on burning 250 calories on the treadmill and we actually burned 150, then the variance is 100. A positive variance in this part of our plan is not good. We planned on burning 100 more calories than we actually did, calling for adjustments elsewhere.
At the start of each day, we can now look at how we’re doing and easily adjustment our food and drink consumption plus our exercise program, so we stay firmly on track.
It’s the variance that’s the Gold because the variance tells us what we have to do to correct our course and how much adjustment is needed. We can’t have a variance unless we have a plan and we can’t have variance unless we measure our actual results against that plan.
This is so simple yet powerful. It also requires discipline, which again is another reason to have a coach. Just having to present and track the actual results to a coach is often the main reason people accelerate their results so rapidly with the guidance and accountability a good coach brings to the game.
Example 2:
In this example, the company has a defined sales funnel primarily using Internet marketing tools to identify interested prospects. Their lead-in products include one of a number of free reports, a mini-course and e-books. All are an enticement to attract people into their list. Once on the list, they can use an auto-responder system to demonstrate the value of a product line they sell with price points ranging from $9.97 to more than $30,000.
This model deserves an entire book in the Building Business Profits Fast series. For the purposes of this book, the company illustrates the use of the Gold Formula throughout their business and it includes a weekly plan for new leads into their auto-responder system.
Their past statistics show precisely 1,000 leads entering the auto-responder system each week. They’re confident they can achieve their current annual revenue and profit goals for this year, which are 100% higher than last year, by driving 1,000 people into their sales funnel.
This business further breaks down the 1,000 leads by primary source, including:
- Facebook Pages
- Pay per Click
- YouTube
- More
Each of these traffic sources has its own plan actual variance tracking system. Beyond that, each activity has a plan actual variance tracking system.
For example, if the goal is to publish six tweets and 12 re-tweets daily, then the actual is compared to the plan and a variance is calculated. Included are calculations of the click-through rate to the site and the resulting conversions to leads from those clicks.
“You Get What You Inspect, Not What You Expect.”
That is not my quote. I’d love to give proper credit to the person who originated it, but I don’t know who that is. The point is, as soon as this business started clearly measuring activities and actions against the results, they were always able to see what was working and fuel it, and also to see what was not working and fix it.
The Gold Formula™ may be the single most powerful tool in the toolbox, for not only increasing your revenue and profits by 30% or more – but doubling it or even more, as you continue to follow the plan.
Back to the Mirror
When measuring your business profits and looking at where the variance lies, make sure you look in the mirror and understand how your strengths match your goals, internally and externally. Continue to develop these skills as you surge toward the prize – your financial independence.
Remind yourself the results – 30% higher profits in 90 days or less – are well worth the additional work consistently strengthening your efforts and measuring your progress constantly along the way. After a while, it becomes habit.
In an earlier chapter, I discussed the use of a personal journal in connection with the time you spend developing your self–confidence and your value system and deciding what areas of your life you’re going to strengthen. Those areas may include relationships with your family, your health and, on a personal level, strengthening what may be less-than-optimal characteristics of your own thinking and behavior.
As a professional success coach, I have a great responsibility to guide others toward their ultimate success. It’s paramount to my own character to do this in a responsible and honest way. The same principle applies to you. Keep your eye on the ball. Don’t let others make you slide off your foundation. Remember that what you put out to the world is what you will get in return. Make sure what you put out there is valuable.
Character and Confidence Go a Long Way
Confidence builds with experience, but you can have confidence even without any experience at all. How you present yourself and who you surround yourself with builds your self-confidence, which will also make you appear more confident, creating the best climate for success.
Don’t forget the fundamentals of your own character. Who you say you are should be who you really are. Stay focused on what you’re trying to achieve and remember the variances that you measure will move your business forward. Be sure that forward movement is in the area of revenue and profits, following your plan to generate an increase in profits of 30% or more in 90 days or less. This way, it’s truly possible to achieve your goal and then easily duplicate the process again and again for even better results.
Above all else, remember that only 20% of what you do creates 80% of your profit. Make sure what you do is packed with purpose and never bend from your core principles, focusing most of your attention on the 20%.
Always hold onto the image of success. Be bold and confident in your decisions and remember to be daring – even when the stakes are high, if it also makes sense to take a measured risk.
Above all else, avoid anything that doesn’t align with your goal. It’ll take you off-course faster than anything else.
Action Steps:
- Take an area of personal development that’s measurable and create your Gold Formula for that area. It could be a health goal, like weight or blood pressure. It could be a plan to spend 30 minutes each morning on personal mindset work.
- For the most important activity in your business, create a Gold Formula System for planning and measuring results. For example, I recently set a goal for my team to make 10 calls a day, “dialing for deals” – real estate deals. We’re tracking the results of that initiative on an excel spreadsheet. In the first week, we have five new offers on the market and one accepted. This is for the buy-fix-and-flip niche and I’m very happy with the results. (This will be explained in much greater detail in the upcoming book, Build Real Estate Business Profits Fast.)
The Gold Formula™ is very easy to understand. However, implementing and benefiting from this powerful tool is best achieved by working with Coach Steve. Drop me a note at stevepohlit@gmail.com or call me at 727-587-7871. I’d be happy to discuss helping you personally, too.
