Where Does Your Business Really Make You Money?

Where Does Your Business Really Make You Money?

By Josh Tolley

 businesses,chests,gold,metaphors,riches,treasure chests,treasures,wealth


One of the factors between success & failure as a small-medium business is, understanding where you really make money. There are many instances where the largest source of revenue is not what the business’ main (or perceived as main) function is! Large companies have a handle on this, for example:


Main Business: Fast Food                             Main Source of Income: Real-estate and Franchise Fee’s

A Racing Team

Main Business: Winning races                    Main Source of Income: Sponsorships

Music (band)

Main Business: Albums, CDs, MP3            Main Source of Income: Concerts

Gas Stations

Main Business: Gas                                         Main Source of Income: Convenience Store Sales

The hurdles that many small-medium sized businesses have to face when developing their main source of income:

  1. Recognize what that other source of income is.
  2. Shift the focus of your operation to grow that newly discovered source.
  3. Shift your marketing efforts to facilitate #1 and #2

Let’s look as some small business examples:

Security Firm

Main Business: Security Services               New Income Stream: Teaching home/personal security Classes

Pest Control

Main Business: Pest Control                        New Income Stream: Products (Bed bug proof covers, fly traps)

Health Clubs

Main Business: Facility for Exercise          New Income Stream: Personal Training and Product Sales

IMPORTANT NOTE FOR FRANCHISE OWNERS: There are many instances where the parent company does not understand where their largest source of income can be, and many more instances where YOUR income and THEIR income actually come from two different sources, meaning they actually don’t make their money the same way you do!!

Let’s say you own a franchise where the parent company gets a flat monthly fee from you instead of a percentage of your success.  This, more often than not, leads to a discrepancy between what the parent company teaches for you to succeed and what really needs to be done in order for you to make money.

Example: A Fitness Franchise

Most of these gym companies are terrible at marketing in the first place (don’t get me started) and I have helped a number of gyms succeed despite their parent companies.

To the public It would seem that these gyms make their money from selling memberships. Sadly, most of these new franchise owners believe that too! Where ALL gyms make most of their money is in Personal Training and Product Sales. The large corporate guys (L.A. Fitness, Gold’s, and Bally’s) know this. That is why they offer $0 registrations and $19 membership fees. To them, the membership fee (if they even get any) is just frosting, while across the street the franchise prices their memberships to compete.  However, the little franchise is counting on its memberships to survive!

Red flag: You know your franchise is doing the wrong thing if they are measuring how many new members are being registered and telling “success” stories of other franchise owners “signing up 100 new members this weekend by running a $0 sale and putting out the flags on the main street.”

Let’s look at the numbers:

                10 new members @ 30/month = $300 per month in revenue.

                3 training clients 2x per week @50 = $1,200 per month in revenue!!

A gym with 100 total members can make the franchise owner wealthy if done correctly, while a gym with 750 members can go bankrupt in less than a year if they are trying to “increase memberships.”

There are other benefits to marketing training and products for the gym franchise but this is not an article on how to run a gym franchise, but rather how to recognize your real source of income!

It is my sincere desire that your business has a prosperous 2011 and that you realize where your real treasure in your business is hidden.

Josh Tolley is a business and behavioral strategist.  His latest book, “Quit Your Job or Die: Discover the Importance of Self-Employment” has been a top ten best seller for over 12 weeks.  His teachings have been implemented by hundreds of people and dozens of businesses around the globe. He is ranked as one of the top 100 business and personal growth trainers in the world and is the developer of many human interaction technologies. Josh does take on a VERY limited number of personal clients, to discuss this or to book Josh for a seminar in your area contact Mike with The Annex Group at 626-893-4917 or contact@joshtolley.net


2 thoughts on “Where Does Your Business Really Make You Money?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s