Ask any business owner what their business needs and you will get a host of different answers. Some will say "new equipment", others will say "better staff" while others will say "more time." Many will probably say they need all three! However, the most common responses will invariably be related to the following three areas:
1. More Customers,
2. More Revenue, and
3. More Profit.
Ask those same business owners how they plan to go about improving the above and their responses will likely be something related to marketing. They will want things such as better salespeople, improved marketing strategies (and then they will say that half of marketing doesn't work anyway). Many will just have a collection of ideas without a specific action plan for growing these areas, and even less will have considered how they will be able to test the impact of their ideas.
What many business owners don't realise is that every business ever conceived operates on exactly the same 'business chassis'. This is a very powerful, yet simple concept, that few are aware of. Understanding this principle can play a major role in determining the success of your business. We call this 'business chassis' concept the 5 Ways Principle.
The 5 Ways Principle:
The 5 Ways principle is a very powerful business tool that will enable you to have:
1. Total control of your business growth
2. Predictable marketing functions within your business
3. Maximised profits in your business
The principle can be demonstrated with a simple formula:
As you can see, customers, revenue and profit are the "outputs" or results in this formula. Leads, Conversion Rate, Average Sale, Number of Transactions and Profit Margin are the "inputs" that drive the "outputs". So if you want to change the outputs in the formula, you must first change the inputs. For example, if you increase the number of leads or the conversion rate then the number of customers will increase.
So what happens if we increase both the number of leads AND the conversion rate? Well, the two do not simply add together, but rather one multiplies the other. It has a compounding effect - this is the great strength of the 5 Ways Principle.
With a compounding formula, small improvements to each part of the formula can quickly improve your results in a dramatic fashion. There are five variables in this formula and each can be affected by a whole range of activities or strategies. There are dozens of strategies any business owner can implement that will improve each area to maximise profits.
Focus on the Five Ways:
Number of Leads:
Number of Transactions:
Test and Measure Your Results:
There are many different strategies to improve each area, although some that might work for one business may not work for another. That is why it is so important to measure the impact of every implemented strategy. If it works increase your activity, if it doesn't then adapt and adapt again until you find a winning formula or it is obvious it will never work. Testing and measuring is vital to maximising your profits.
Opportunities for Profit Growth:
So, the powerful part of this principle is the power of compounding. A minimal increase in each of the five areas can quickly lead to double or triple digit increases in your bottom line profit. This approach is simple, but it takes discipline, focus and time - yet it can make all the difference between a great business and a business that just gets by.
So are you up for the challenge?
Find out how to maximise your profit building chassis at The Somerset Business Show.
- Seminar: "5 Ways to Maximise Your Profits"
If you would like to explore how the 5 Ways Chassis can be used to maximise profits in your business why not book onto my Free 5 Ways seminar
This seminar will cover the five main areas that drive your business and deliver massive increases in your profits.
1. The '5 Ways to Maximise Profits'
2. How to grow profits by 61%
3. Profit building strategies
You'll also receive Complimentary Business Building Gifts:
1. 1:1 Profit building session
2. Sales and profit building book
3. 66% discount on 90 Day Business Planning event
To book your ticket:
If you are interested in sponsorship please contact us.
Not only will it give you free entry, you'll be eligible to win the SHOW PRIZE!
Brad Burton, 4Networking Founder, UK’s #1 Motivational Business Speaker, Author
Sir Richard Branson, Founder, Virgin Group
Florence Nightingale Graham, Founder, Elizabeth Arden
Bill Gates, Founder, Microsoft
Charles Darwin, Naturalist
Aristotle Onassis, Shipping Magnate
Daniel Ek, Founder, Spotify
David Ogilvy, Founder, Ogilvy & Mather
Jack Dorsey, Co-founder, Twitter