Formula 5 was an internet marketing / business growth information product released by Paul Lemberg in conjunction with the guys from StomperNet (this was before the controversy surrounding the organisation). It was released in late 2008 and early 2009 and retailed for US$1997. As I understand it, there were only 500 copies ever sold.
The core concept is that there are a number of areas that are very high leverage within most businesses and by working on improving and enhancing these areas, the profits generated by a business can be grown substantially and quickly. Needless to say, most small and medium sized business owners are not working on these areas.
Most IM launches focus on one area of a business and tend to offer some sort of a “silver bullet” to solve a firm’s revenue and marketing needs. This is fine, but many of these ideas are very difficult to integrate into an existing business, the business owner probably needs to start again with a new venture to use them. In contrast, Formula 5 was a complete system to growth. The ideas behind it had obviously been tested and tweaked over a very long period of time so that only universal ideas remained. Therefore, Formula 5 is probably applicable to the vast majority of businesses. As Lemberg said, “The system is great so that you don’t have to be”.
The idea is built around the “rule of 72″ which states that 72/N = % growth compounded. N represents the number of factors. Lemberg sold the concept as requiring 15% growth in each of 5 business areas. In some regards, this 15% growth can be ridiculously easy to attain – the business owner just has to follow a few steps. For this reason, Formula 5 is very action orientated. At many parts of the course, the instructions are simply, “Switch this off and go do whatever came to mind. Don’t come back until you have completed it”.
By shooting for only 15% growth, but then compounding it with other areas of similar sized growth, a business can rapidly improve profitability and potentially double in size in the space of a few months. For the right kinds of business, it is probably possible to grow 50% quarter over quarter by simply implementing the ideas suggested. And if you have the skill and courage to start your own business, you will have “what it takes” to be able to implement at least 75% of the ideas in the system – which means that you will be able to grow your own enterprise and it’s profits quickly.
Lemberg has worked with businesses of almost all sizes and found that his ideas work very well everywhere. This means that a Mom and Pop store can help themselves as can large companies. From his discussions of how he came to the idea, it seems as though part of the process came from working with some small firms that were planning an IPO and needed to grow and grow fast. As they grew it became possible for them to list on the stock market (http://www.thestuartlangridgeletter.com/what-is-a-stock-market.html) and have the “liquidity event” that they had been dreaming of and working towards.
For many, of course, the stock market is also a way of making money, though not typically within a business, but as a private investor. There is little doubt that many people are successful at this, but it is harder for a beginner (http://www.thestuartlangridgeletter.com/stock-market-for-beginners.html) than working on their own business.
A point Lemberg makes several times in the course content is that while growing profits can be wonderful and very rewarding, it much more financially rewarding if there is some plan or intent to sell the business. Then each new dollar is multiplied by two or three or four (depending upon the final sale price or stock exchange floatation value). As such, this system really is a gold mine for people that have plans to grow fast, sell and move on.
Having purchased and worked my way through a good number of marketing information products, I can say that this is very well thought through and put together. If this doesn’t work for you and your business, you should sell the business – there really is no hope for you.
How To Implement It