Is Your Business Funnel Making You Money?

Every business operates in a funnel system. The concept is very simple, on one end is front end sales and on the other end of the funnel is back end sales. In very simple terms, you spend effort, energy, business costs and attention in the front end to sell your products and regardless, you have some degree of back end sales from the other end which require no additional attention or effort.

For example, a grocery store. Grocery stores have been effectively using the funnel for decades. They run ads on milk or meat or something everyone wants at a very low price to get customers in the door. This is front end sales. However, how many customers leave with just the sale item? The back end sales, the additional $50 in products took no additional effort for the store to sell to you. This is highly effective.

Unfortunately, few small business owners really grasp the power of the funnel. They work hard generating the cash on the front end with no attention given to building the back end sales.

Why is this important? Very simple, a well designed sales program can generate a "large" majority of the sales on the back end. Meaning, the effort spent on front end is minute compared to the results reaped on the back end.

Look at this funnel and imagine the front end being the top. The wide end requires more effort, more focus, more money in business costs just to produce the small results at the bottom.But reverse the funnel! Now, the efforts at the front end are must less. The cost for customers, the amount of advertising, and generally the amount of effort is much smaller but the results at the back end are enormous.

Think about this. Have you ever been to a free conference or signed up for a free online seminar? What happens? Before you know it, you are leaving the conference with hundreds or thousands of dollars in product, just to attend the free seminar or conference. This is pure genius. The effort on the front end product, the free conference is very small, but the back end results, the tapes, videos, books and more is where the money is made and usually in huge quantities.

When people ask me how I work so little and live the lifestyle I do, I simply tell them that 90% of my income in on the back end. Some get it and others don't. But I spend my time, energy, focus, attention and advertising dollars on the front end for my product offering a $1000 commission. In the meantime, my other two products with a commission of $5000 and $8000 require NONE of my time, energy or focus. But, those two products represent 90% of my income.

In a recent podcast on Business Week Online, the author spoke of the reverse funnel as the "new trend" in sales to allow sales reps more time to spend on other activities. Of course those other activities are more work, but the concept is to free up their time and make tons more money for the company.

As a small business owner, once you grasp this, you free up time for yourself and your family, as well as greatly increase your income from your business.

So give your business some thought. What end of the funnel are you feeding? And, what end is your cash coming from?

PS For a business model with a huge back end sale potential, check this site out: http://www.abundantlifestylenow.com