It doesn’t matter what business you are in or where you are located, fundamentally there are just SEVEN ways to increase the profitability of your business.
That’s right – just seven.
Which is a relief, really, when you think about it.
If there’s only seven ways to grow your business, then there’s only really seven things that you need to focus on in your business to have it grow and put more cash into your back pocket. Not twenty, not two hundred... thankfully!
And if you focus on and improve each of the seven ways (even if it’s just a tiny improvement for each) then you’ll start to see DRAMATIC improvements in your business.
Let’s start by exploring the seven ways to grow your business ...
1. Attract new potential customers (lead generation)
2. Turn more of those potential customers into customers (sales conversion)
3. Keep more of those customers from defecting to your competition (retention rate)
4. Get those customers to do business with you more often (transaction frequency)
5. Encourage them to spend more money with you each time they buy (‘average sale’ or ‘transaction value’)
6. Reduce the Cost of Goods Sold (profit improvement)
7. Reduce the Expenses (profit improvement)
Which of these areas do you focus on the most in your business?
If you’re like most people, you spend most of your time focusing on Point 1: Attracting new potential customers or generating leads. While you focus all your attention on this area, you can end up neglecting other areas which are potentially even more profitable for their business.
Moreover, while you focus all your time on attracting new leads, you’re actually missing ‘big picture’ sales and profit opportunities that often take far less effort but can have a much bigger impact.
That’s because small, incremental increases across several of the seven ways listed above actually leads to a disproportionately large increase in total revenue and/or profit.
The business growth formula looks something like this:
Leads Generated x Conversion Rate x Retention Rate = Total Customers
Total Customers x Transaction Frequency x Transaction Value = Total Sales
Total Sales - Cost of Goods - Expenses = Profit
If you’d like to learn more about how small increases to each component of the above formula can lead to absolutely MASSIVE business growth, simply request our free report, ‘Growing Your Business and Increase Your Profitability... Dramatically’.
The report takes you through a simple exercise that demonstrates the power of small increases to each of the seven ways to grow your business, as well providing specific strategies that you can implement straight away in your business.
Don’t forget to give us a call on 03 479 3890 if you’d like a sounding board or someone to help you map out exactly how you can take action across these seven key areas and make next year the year that supercharges your business success!