Think Your Business is Different? Here’s Why It’s Costing You Money
Kelli Hoskins, Master Business Coach
Apr 1, 2013
If I received a dollar every time I heard that statement well, I’d have a lot of dollars. There is a simple formula that determines where your current profits come from and how to systematically increase your profits. And this formula applies to every business, everywhere, every time. If this is the case, why do so many business owners think their business is different? Because it’s easier to keep doing what you’ve always done rather than to try something new and convincing yourself that our simple profit building formula does not apply to you because your business is different, let’s you off the hook. Or does it?
You see, I have not come across one business that is not in business to Make Money. Not one. Yes, there may be additional dreams, goals or results a business owner might like to achieve, however making money is a big part of why they are in business. So, if you are a business owner, let me ask you a few questions:
- Are you in business to make money?
- Do you need to consistently bring in new customers?
- Do you need your existing customers to come back and buy from you again?
- Do you need to charge more for your products or services than it costs you to deliver them?
If you answered YES to all of these questions:
*** THEN YOUR BUSINESS IS LIKE EVERY OTHER BUSINESS ***
Excellent! That means our simple Profit Building formula will work for you too. It goes like this:
Conversion Rate (%)
Average Dollar Sale
Profit Margin (%)
You can’t improve what you don’t measure, so to systematically increase your profits, you must begin by measuring each of the five variables in our formula. You should track these numbers at least monthly. Once you have a system for measuring these numbers, it’s time to forecast increases in each of these areas. Not huge increases just small sustainable increases say between 5% and 10%. And finally, identifying the strategies that are going to make a difference for your business. Did you know that no matter what your starting numbers, if you can achieve a 10% increase in each of these variables over a twelve month period – leads, conversion rate, number of transactions, average $ sale and profit margins, you are guaranteed a 61% increase in bottom line profits. Every business, everywhere, every time.
Yet, there is one thing that makes every business different. YOU the owner and the way you think. So, you can’t make money because your business is different. The one thing that makes your business different is YOU. So, you can’t make money in business because of YOU!