What is your ultimate business plan? Do you want to increase sales, improve profit, grow your business and create wealth? Let me outline my 5 step system to achieving massive growth in your business - no matter what business you are in.
Twenty five years as a business advisor across most industry groups has shown me that while most owners are fantastic at running their day to day business operations, they never spend enough time working on improving the performance of their business.
Sadly, most business owners I have worked with are just so busy working to keep the wheels turning that they never make the money they deserve. Many struggle to draw commercial wages for their efforts, many never reach their profit potential, and most never sell their business for what it could really be worth.
My question to you is - are you making enough money right now? Do you know how to increase sales? Do know how to improve profit? Do you even know how much profit your business is capable of making? Perhaps even more importantly, do you have a plan of how to grow your business profit and business value into the future?
I think you will be amazed at how easy it is to increase sales and improve profit if you simply focus on what is important. In fact, let me cut to the chase and show you how easy it can be - let me show you an example of a business I worked with that grew its profit by 75% after making an easy 5% improvement in each of its 5 key profit drivers.
When I began coaching this manufacturing business, their profit model could be summarized as follows:
* 800 customers purchased product on average 6 times a year and spent on average $500 each time. This gave an annual sales turnover figure of $2,400,000.
* Their gross margin was 50% giving a gross profit of $1,200,000
* After paying $800,000 in overheads, their net profit was $400,000
By understanding the 5 underlying profit drivers in this business, we introduced various strategies aimed at improving the results of each profit driver by at least 5%:
* We increased the number of customers buying from this business from 800 to 840 - a 5% increase;
* We increased the number of times the customers purchased goods from this business from 6 times a year to an average of 6.3 times a year - a 5% increase;
* We increased the average amount of money each customer spent during their sales visits from $500 to $525 - a 5% increase;
* We increased the average gross profit margin on each sale from 50% to 52.5% - an increase of 5%, and,
* We decreased overheads from $800,000 to $760,000 - a decrease of 5%.
As a result of these improvements turnover increased from $2.4M to $2.8M and the underlying business profit increased from $400,000 to nearly $700,000 - that is an increase of $300,000 or 75% !
Even more amazing was that the value of the business (based on a sale multiple of 3 times net profit) also increased by 75% - increasing from $1.2M to a massive $2.1M !
Can you imagine what your business would look like if you were able to improve profits by 75% year on year? Can you imagine how much better your family life would be with that result?
Now I know what you are probably saying to yourself just now - great story, but I could never achieve that result in my business. Well I am here to say that this 5 step growth strategy will definitely work in your business.
I know it will work for you because I have used this 5 step growth model on all sorts of businesses, in all kinds of industries and through all economic cycles over the past 25 years as a business advisor in Australia.
If you apply the 5 step system I guarantee that you will increase sales and improve profit in your business. Of course not everyone will achieve a 75% improvement in their profit result - some will achieve less, and some will achieve much, much more !
The results you can achieve in your business will depend on your particular profit drivers, the opportunities to improve these drivers, and most importantly, your ability and commitment to implement the 5 step system in your business.