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15 June 2021

The Stop Light Exercise: The 15-Minute Crash Course That Has Added $60-$350k in NET PROFIT Back to Business Owners

Jairek Robbins

The purpose of this exercise is to see if you can pull at least $3,000 to even €300,000 as net profit into your business. We realize that a lot of people around the world have been going through some pretty crazy time in the last year or so, and we want to help you put your business in a position that’s really smart with regard to weathering the storm.

To begin, imagine the structure of traffic lights with red on top, yellow in the middle and green at the bottom. You can even draw the stop light and mark it accordingly.

Watch the VIDEO here.

The red circle (STOP)

For task number one, let us focus on the red circle inside the stop light. Write down 4-5 things which you are still paying for in your business yet you shouldn’t be doing so.

When I do this exercise with businesses around the world, I ask them to print out their credit card statement, P&L statement and all records capturing their financial transactions on a monthly basis.

We then go through those statements line by line with a highlighter identifying everything that is red (the things you shouldn’t still be paying for but are still making payments for those things). The most we have found in the red circle was in the personal P&L of a client in Europe who had €50,000. That adds up to a whopping €600,000 a year that was going to waste in the red circle!

For companies, we did this with several businesses in Europe and one was able to uncover €300,000 in excess expenditure in the red circle. Having saved this monthly expenditure, they were able to recoup all that money as net profit. 

And so I want you to write down the top 4-5 expenses which are in the red category that you could immediately eliminate. If you are watching a recording, pause for 15-20 minutes and scrutinize your P&L statement in order to identify those red category expenses. How much did you find?

Last year when we did this exercise, we found that on average, people would save about $3,000 a month. We had a lady who owns a gym in Texas save $5,400 a month. A favorite student of ours called Michelle saved $50,000 worth of expenses last year by identifying the red circle items and getting rid of them. 

The yellow circle (MAYBE)

This refers to expenses that fall in the middle. You could keep those expenses, or you could cut them. You aren’t sure which is which. 

I went online and asked some people to tell me the things that people may want to keep and yet they should get rid of. Some of the responses I got included the TV (for which one keeps subscribing and yet they never watch it), gym memberships that are paid for but never used, and so on. 

Pause for a bit and go back to your P&L statement. Using a yellow highlighter, identify all the expenses that you could live without, you don’t really need them. Hopefully, you found at least $1,000, $5,000, $10,000 or even more in the things you could do without but may not want to eliminate them just yet.

So, what do you do with the yellow items?

Well, set a goal that goes like “as long as you hit a certain number in sales, revenue, income, turnover or any such metric, you can keep all the things in the yellow circle.” But, if you don’t hit the sales, revenue, income or turnover target, you will immediately cut those items in yellow. This will keep you as profitable as possible if you are an organization or company; and for individuals, you will keep your finances in the best state possible.

RELATED: Going All In Business and How It Affects In Relationships

The green circle/section (things you can’t live without)

For this category, there is no option because you have to keep them. Once again, comb through your P&L statement and use a green highlighter to identify all the expenses that you can’t live without. These include your rent, food, transportation, and so on. The necessities of life. 

The other thing that you need to do is to add up and get the total for all the items in red, then add up and get the total for the yellow items, and then finally get the total for the green items.

Implement the decision to eliminate red or yellow expenses

Having identified the expenses you want to eliminate, go ahead and call to cancel those expenses or subscriptions. For some services, a simple phone call will do while others can be cancelled online.

I hope you have enjoyed this exercise, I hope you have saved a ton of money and I hope this was a worthwhile investment for you and you will enjoy the ROI of participating in this exercise.

If you want some help growing your business, go to jairekrobbins.com and look at the different programs we have. We have a business incubator for people who are making less than $20,000 a month of recurrent revenue and they want to hit that mark. We also have a business accelerator program for businesses that are making between $20,000 and $84,000 a month. That program is built to help accelerate your growth. Our highest program is the business director program for people making in excess of a million dollars a year and they want to get strategic advice on how to keep growing and optimizing their business.

If you would like help via one of those programs, just click the link which best suits your needs and fill out the application. Also, if you know someone who is being squeezed by a ton of expenses that are eating away their net profits and they can’t seem to see the growth they want, share this training with them so that they too can do this exercise which could potentially save them a sizeable amount of money.

Remember to share your results with us, and possibly join one of our business growth programs so you can see higher levels of growth in your business. I hope you live with passion in all that you do; see you soon in another training!

Watch the VIDEO here.

To Your Success,

Jairek Robbins



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