What is your ultimate business plan? Do you want to increase sales, improve profit, grow your business and create wealth? Let me outline how you might go about 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 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 achieve massive business growth 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 that grew its profit by 75% after making 5% improvements in each of its 5 key profit drivers.
Before implementing a business improvement plan, this manufacturing business had 800 customers purchasing from them 6 times a year and spending on average $500 each time. This gave the business a sales turnover of $2,400,000. With a gross margin of 50%, their gross profit was $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, this business introduced various strategies aimed at improving the results of each profit driver by at least 5%:
They increased the number of customers buying from them from 800 to 840 - a 5% increase;
They increased the number of times the customers purchased goods from them from 6 times a year to an average of 6.3 times a year - a 5% increase;
They increased the average amount of money each customer spent during their sales visits from $500 to $525 - a 5% increase;
They increased the average gross profit margin on each sale from 50% to 52.5% - an increase of 5%, and,
They 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 increase your 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 the above 5 step growth strategy will definitely work in your business.
I know it will work for you because I have seen this 5 step growth model used successfully 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 achieve massive growth 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.
Craig Ridley is the Head Coach at [http://www.youronlinebusinesscoach.com] - a web site targeted to business owners who are interested in increasing sales, improving profit, growing their business, taking their business online and creating personal wealth.
Membership of our successful Online Business Coaching Club provides access to more than 5 years of business improvement ideas, eBooks, videos and workshops. Our coaching program is delivered online and designed to give you time to properly learn, plan and implement the business improvement strategies which will allow you to build a High Performance Business that delivers increasing profits, consistent growth and a better personal lifestyle.