Sept. 29, 2025
7 X 7 X 7 Profit Formula
Use this formula to increase profitability. I will show you how to use it and what areas of your business it effects.
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Hi, you have done to the censure wow for you
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your yo.
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It's pipe Man here on the Positively pipe Man segment
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of the Adventures of Pipe Man here in W four
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c Y Radio. It is Motivational Monday, and we're going
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to motivate your business with our resident expert on business
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who has some oh powerful business strategies. And you know,
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I'm looking at today's title and I'm thinking myself, should
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I do this interview or should I go to the
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or should I go to the crap table? Because both
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ways could be winners with the number seven. So let's
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welcome to his show. Michael Barbarita, thank you.
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Thank you.
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Dean.
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Yeah, the seventh, seventh and seven formula is you know,
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if a business owner just worked on this and nothing else,
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could be a tremendous impact. But there's some you know,
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procedural things that you have steps that you have to
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take in order to properly implement this. And by the way,
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it works excellent too in terms of bonusing managers. I've
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seen it work really well there. But let me explain
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the formula first of all. So the seven seven seven
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formula is simply this, you work towards increasing sales seven percent.
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You work on decreasing your cost of goods by seven percent,
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and you work on decreasing your overhead by seven percent.
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When a company does that, I'll give you a quick example.
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If a company does on billion dollars in business and
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they increase their revenue seven percent and they have a
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forty percent margin, they increase their revenue seven percent, they
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decrease their cost of goods seven percent, and increase their
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overhead seven percent, the impact on profit will be a
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sixty three percent profit increase. That's the that's the power
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of the seven seven seven formula. And you gotta say, well,
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one of the procedural things well, of course, the way
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they increase sales and say, increase prices. You could sell
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more units per customer, packaging and bundaning that we've talked about,
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adding more value that we've talked about, I'll sell down
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cell cross selling we talked about UH and then for
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ways to reduce it. And this is the this is
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the one that everybody says that you can't do. By
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the way, this is reducing your variable costs or your
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cost and good soul. You know there's ways to do that.
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For asking asking for improving your process internally. That's one second.
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Negotiate vendor terms with free freight, also better payment terms advertising.
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You know, Dean, I used to get one hundred thousand
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dollars of advertising money from my vendors. And it's not
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because and I wasn't the biggest And and here's the
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thing with a lot of the vendors out there in
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the various industries, they always have a little extra advertising
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money in addition to their standard co op, which some
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have and some don't. But whatever whether they have a
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standard co op or not, they have average they usually
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have a budget for helping some customer in some way.
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So I used to do a dog and pony show
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every year at the National trade Show to my critical
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vendors of how this advertising program that I did was
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was going to help improve says and increase our order.
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And when you know it, I got ten grand from
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ten vendors. Wow. And some of that money came in
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the form of free product, which by the way, is
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more than ten grand, because I got the free product
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that wholesale ten thousand dollars worth of product that I
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can sell retail. And some of it came in just
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in the form of a deduction off of an invoice,
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but or it came in cash. But one way or
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another it came in and it was able to absolutely
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help my business tremendously, all for a dog and pony shop,
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and to make vendors realize that some of the advertising
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things that you can do and how if you follow
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the convergent formula which we've talked about the past, captivate, fascinate, educate,
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and close, it works famously to get this advertising money
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and to show the vendors using the convert how you
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use the conversion formula to get business. So asking for
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point of purchase displays, better pricing, better quicker turnaround, minimum quantities.
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These are all things you can ask your vendors for.
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Can order to be canceled without penalty, because that's no nonsense.
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If you if you're if you're penalized for canceling and order,
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that's real bad. Maybe you need the product to be
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more efficiently handled or packaged in a certain way, or
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are you need better I think I've already said better,
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better pricing as part of it as well, So the
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negotiation of vendors and improving the process. People are afraid
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to negotiate with vendors. I don't know why.
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I don't get it.
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It makes sense. Also in terms of reducing overhead, UH,
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you can you can relocate. I know that that can
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be a pain in the neck, but you can. UH.
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You can negotiate with your existing landlord. I'll tell you
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talk about dog and pony shows. If you invest. If
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you negotiate with your current landlord, and you show the
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financial statements, and you show all of the uh, all
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the dirty laundry, if you want to call it, all
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the financial information, you come up right up front with
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the landlord. You could get discounts with landloads.
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UH.
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Your insurance policy should be audited and you should obtain
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new quotes every year. You should always be You should
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always ask your current suppliers for discounts always. You should
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audit your internet and phone services.
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UH.
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And you should always mention a competitor when you do
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uh talk to them.
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I do that all the time.
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There's plenty of write offs and tax savings that especially
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through a sub chapters corporation, which you should look into.
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You should negotiate blanket purchase order discounts so it allows
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an organization to bump together purchases that would otherwise happen
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you can look for reductions and waste, and you cancel
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subscriptions that you forgot about.
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I mean I think also, like you know, not just
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accepting things. And I'll give you an example of that.
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I have a storage facility where when we do events,
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that's where we put our equipment for the events instead
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of storing in the studio. And basically every four months,
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the storage company I'm with, they will up your price
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like and a lot of times it's dramatic, okay, And
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so what people tend to do is either forget about
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it and even either just pay it, or then they
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go to another storage facility so that they can get
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another free month and special deal. But what they don't
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realize they're going to be right back up again in
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four months, and they just spent money moving all their
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stuff and time and effort every time for years. Now
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that I've gotten that increase, I call up the facility,
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now even the corporation, but the facility, and somebody in
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that facility actually negotiates for me. But I basically do
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exactly what you're saying. Number one, I get a little,
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you know, perturbed that they keep raising me. I've been
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with you for a while and somebody can come in
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and they could get a free month and they can
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pay what I was paying in the beginning, and that
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now I pay more, And a lot of companies do that,
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you know, but people just accept it. And then I
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do bring up the competition. I'm like, listen, I could
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go to right down the street and I could get
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it for what I was paying before, and they'll give
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me a free couple months. I don't want to move,
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so tell me what you can do for me because
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I can't pay this amount. And every single time I
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do that, they lower it back to almost what I
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was paying when I first started with them. So, yeah,
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they're getting a little bit more. But you know, right
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now I can tell you that I'm paying a quarter
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of what I would be paying had I agreed to
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the increase.
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Interesting and then lots of times we'll review credit card
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statements and they'll have subscriptions that you're not using anymore. Yeah,
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that's another area to cut overhead, soliciting employee input for
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efficiency improvements. It's another area that business owners have a
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tendency to overl book. They overtime h I have. I
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have many clients who didn't realize that they were spending
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so much for overtime, where especially when sales are down right,
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business is off and the overtime numbers are the same. Yeah,
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that's it. That's a compute. The other area Dean is
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transportation and vehicle costs. That's an area that that's abused
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by employees. So that's another area that you can look
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to see how to make that more efficient. Also, utilities,
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lots of times lights are left on. Uh, you know,
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it's it's there's so many different procedural things that you
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can improve process on. And by the way, your employees
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are a great resource for that. And then you have
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to analyze your marketing to see if if from you know,
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making sure that every dollar is working. So there's a yeah.
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And so if you if you just focus on the
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seven seven seven seven percent increase in sales, seven percent
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decrease in cost of goods, seven percent decrease in overhead,
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you'll see an amazing difference. And what many businesses have
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done is they bonus their managers on for example, decreasing
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cost of goods by seven percent and decreasing overhead by
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seven percent, And at every level, if they decrease one percent,
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they get a certain bonus if they increase in two percent,
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they get another bonus if they increase in three percent.
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And I can show the business owner of the mathematics
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as I gave you that quick example. You're doing a
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million dollars worth a business. You got forty percent gross profit.
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You do a seven percent increase in sales, seven percent
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reduction and cost a good seven percent reduction and overhead
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you have a sixty three percent increase of profit, which
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you can certainly share some of that. If you're with
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a manager who drove that performance.
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You'll also increase sales by decreasing overhead and costs because
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you'll have a more productive environment to be a little
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bit to sell more.
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Right, there's a lot of things that can be done
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in house, you know, to improve efficiency and cut costs.
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Absolutely lots of things.
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It's amazing. Uh and so buth so once again, Dean. Uh,
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you know, we we went over a lot of stuff today,
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but there's a lot more stuff to to glean from
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from this. But this this formula, if a business owner
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just focused on this one formula seven seven seven, very
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easy and very easy to uh to focus on and
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very productive. Uh, they would see it annoyed to increase.
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In profit, no doubt. All they have to do is
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think about what happens if they get seven seven seven
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on a slot machine. And you can do that for
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business too, So yes, they do have to reach out
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to you. There's so much more to discuss in this area,
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So reach out to Michael and also there and find
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out about all the other services. He's a wealth of
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information and a wealth of expertise. And there's even a
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chance at a book interview.
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That's right, okay, So go to NEXTSTEPCFO dot net, forward
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slash contact, fill out the contact form, put in the
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message box, book interview, and the book you do goes
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just like this. It's sixty minutes on zoom. I present
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strategies whom my book and I ask you, as the
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business owner, what the impact would have to a business
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in your industry if they were to implement that strategy.
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I document it for the book and that's it. And
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I promise you that you'll learn business and financial strategies
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through that interview that your competition isn't doing. And so
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we do both CFO services and strategic implementation. So we
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cover both the financial and the strategic uh and that
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differentiates us from a lot of other fractional CFOs who
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really just focus on the.
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Financial I think you need both.
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You definitely need both. You definitely need both, because what
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ends up happening is you can only talk about the
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numbers so much. Yeah, and then you know, now it's okay,
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Now what do I do? Well, here's some here's twenty
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two strategies that we offer that you can that you
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can implement. And we talk about implementation, we don't talk
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about learning. You can go to Google to learn, so
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next step CFO dot net. You could also download a
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free copy of our book called Powerful Business Strategies. So
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that's how you reach us. And by the way, you
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can also go to that contact page and ask for
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a consultation. We could, and we can tell you exactly
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how we go about doing what we do.
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I think they definitely should and yes, you definitely do
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have some powerful business strategies. So thanks once again for
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bringing them to our our audience here on the Adventures
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of pipe Man positively Pipeman segment, and thanks for being
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here and getting and just helping businesses across the world.
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Thank you, thank you for having me, thank you for
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listening to the Adventures of Pipemin i'm w for c
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u I Radio
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