The Almost “Secret Ingredient” to a Highly Profitable Business

Recently, I watched probably one of my favorite movies of all time:

Kung Fu Panda.

Now, before you write this off as a stupid animated movie, there’s a GREAT business lesson hidden inside if you’re an expert, consultant, or coach.

Here’s the TL;DR version of the movie:

1) A big fat panda, Po, is “accidentally” picked to become the chosen one

2) His master, Shifu, doesn’t want to train him because Shifu believes Po was chosen by accident

3) The great master Oogway, however, tells Shifu that “there are no accidents”

4) Shifu finally teaches Po the art of kung fu. Eventually, Po is entrusted with the legendary “Dragon Scroll” which holds the ancient secrets to save the kingdom

5) Po opens the Dragon Scroll only to find… nothing… and realizes: “There is no secret ingredient.”

The essence is simple:

Po always had everything he needed to become “the chosen one.”

He didn’t need anything fancy.

What he actually needed was the right mentor and the right training program.

Here’s my point:

Just like Po realized that there is no secret to becoming the “chosen one.”

No matter what the Fakebook guru’s preach, there is *NO* secret “hack,” “funnel,” or “tactic” that will turn your business into a profitable one.

Of course, you *can* find new tactics, hacks, and whatever. But, if your foundation isn’t solid (i.e., if your strategy is weak). It won’t matter which new hack you try to install into your business.

Whether that’s Facebook hacks… webinars… Instagram… or, insert whatever new tactic the latest Fakebook guru’s try to shove down your throat. Eventually, it’s only a matter of time before your business crumbles beneath its own weight.

The closest thing to a “hack” that can take you from frazzled entrepreneur to profitable business owner is learning how to write emails that sell.

The only difference is that email marketing isn’t a hack… it’s a powerful strategy.

In my opinion (which, of course, makes it a fact).

This was true when I worked my corporate job and sold for millions of dollars by email and online marketing.

And it’s been true in my own business.

To round this off.

Let me close with my favorite quote from the late, great, and esteemed, Mr. Eugene M. Schwartz.

This quote is as relevant today as it was when Eugene Schwartz unleashed these true words upon the world of advertising:

“The task of a copywriter is not to create this mass desire – but to channel and direct it.” – Gene Schwartz

Take that to heart the next time you sit down to write your latest email designed to sell.
If you want to discover how to 2x your sales and get more clients for your business, my free online training session is a great place to start.

You’ll learn how to use the old-school principle of “Infotainment” to write emails that people LOVE to read. Including: How to write stories so compelling they immediately draw customers in – even if you’re not a professional writer… and much more.

Finance Functions

The following explanation will help in understanding each finance function in detail

Investment Decision
One of the most important finance functions is to intelligently allocate capital to long term assets. This activity is also known as capital budgeting. It is important to allocate capital in those long term assets so as to get maximum yield in future. Following are the two aspects of investment decision

Evaluation of new investment in terms of profitability
Comparison of cut off rate against new investment and prevailing investment.
Since the future is uncertain therefore there are difficulties in calculation of expected return. Along with uncertainty comes the risk factor which has to be taken into consideration. This risk factor plays a very significant role in calculating the expected return of the prospective investment. Therefore while considering investment proposal it is important to take into consideration both expected return and the risk involved.

Investment decision not only involves allocating capital to long term assets but also involves decisions of using funds which are obtained by selling those assets which become less profitable and less productive. It wise decisions to decompose depreciated assets which are not adding value and utilize those funds in securing other beneficial assets. An opportunity cost of capital needs to be calculating while dissolving such assets. The correct cut off rate is calculated by using this opportunity cost of the required rate of return (RRR)

Financial Decision
Financial decision is yet another important function which a financial manger must perform. It is important to make wise decisions about when, where and how should a business acquire funds. Funds can be acquired through many ways and channels. Broadly speaking a correct ratio of an equity and debt has to be maintained. This mix of equity capital and debt is known as a firm’s capital structure.

A firm tends to benefit most when the market value of a company’s share maximizes this not only is a sign of growth for the firm but also maximizes shareholders wealth. On the other hand the use of debt affects the risk and return of a shareholder. It is more risky though it may increase the return on equity funds.

A sound financial structure is said to be one which aims at maximizing shareholders return with minimum risk. In such a scenario the market value of the firm will maximize and hence an optimum capital structure would be achieved. Other than equity and debt there are several other tools which are used in deciding a firm capital structure.

Dividend Decision
Earning profit or a positive return is a common aim of all the businesses. But the key function a financial manger performs in case of profitability is to decide whether to distribute all the profits to the shareholder or retain all the profits or distribute part of the profits to the shareholder and retain the other half in the business.

It’s the financial manager’s responsibility to decide a optimum dividend policy which maximizes the market value of the firm. Hence an optimum dividend payout ratio is calculated. It is a common practice to pay regular dividends in case of profitability Another way is to issue bonus shares to existing shareholders.

Liquidity Decision
It is very important to maintain a liquidity position of a firm to avoid insolvency. Firm’s profitability, liquidity and risk all are associated with the investment in current assets. In order to maintain a tradeoff between profitability and liquidity it is important to invest sufficient funds in current assets. But since current assets do not earn anything for business therefore a proper calculation must be done before investing in current assets.

Current assets should properly be valued and disposed of from time to time once they become non profitable. Currents assets must be used in times of liquidity problems and times of insolvency.

Trade, financial openness and dual banking economies: Evidence from GCC Region


This paper investigates the comparative impact of trade and financial openness on Islamic and conventional banks.

Trade and financial openness have a positive impact on Islamic bank profitability.

Simultaneous openness to both trade and capital markets reduces the profitability of Islamic banks.

Trade and financial openness increase the loan volume but reduce the stability of Islamic banks.

The recent wave of liberalization in Gulf Cooperation Council (GCC) countries has opened up a debate on the role of Islamic finance in the financial development of an economy. Using a comprehensive dataset of 43 Islamic and 49 conventional banks for the period 2007–2015, in this paper, we investigate the impact of trade and financial openness on financial development in the GCC region. We find that trade and financial openness have a positive effect on the profitability of both banking systems, while the interaction term of openness is negative for the profitability of Islamic banks. Moreover, trade and financial openness affect Islamic banks differently than conventional banks. Notably, we unveil that trade and financial openness decrease the loan volume of Islamic banks but reduce the stability of both Islamic and conventional banks.