5 ways to grow your business….
Author: Russell SmithMay 2, 2012
There are lots of business models out there on how to grow your business. One of my favourites is the 5 ways model by Brad Sugars of actioncoach. This is a simple way of looking at your business and highlighting the 5 levers you can pull to increase your profit. The assertion of the model is that you can’t increase turnover and you can’t increase profit, you can only increase the 5 numbers that rest behind turnover and profit. These are:
1. Number of leads
Out of the levers this is potentially the most expensive since increasing your leads will either cost you money or time (which is money). Of course, there are simple things you can do to increase your leads with little effort such as asking your current customers to refer you.
2. Conversion rate
This is my favourite and one of the easiest to see an immediate impact. Increasing the number of leads that convert into customers can be done at a higher rate simply by following up with your leads, making sure the initial enquiry is responded to quickly and showing a prospect client testimonials.
3. Average number of transactions per customers
It’s 7 times easier to sell to your existing customers, so increasing the number of times a customer buys from you is often much easier than increasing your leads
4. Average sale per transaction
Your price says a great deal about your business. Pricing is an art and a science and above all pricing should be a marketing strategy in itself. Increasing the sale per transaction will give you automatically higher profits although as Ben and Jerry know, increasing your profits has to be sustained by a product or service that the customer values.
5. Profit margin
Cost control, efficiency, suppliers, margins. All these things can be increased to maximise your bottom line.
I could go on about this, but I’ve just come back from the cinema after watching ‘The Cabin in the Woods’ for the second time and am going to bed!
11 4 3/4 10 12