The Growth Equation -- see how you can improve your profitability and the value of your business
What would it take to significantly improve the profitability and value of your business? Not a lot if you make small improvements in most or all of the key drivers in your business. During the EDGE event in September when we launched 10X at the Gold Coast International Hotel, Dean Marinac demonstrated the power of the multiplier effect in increasing the performance of your business – using the Growth Equation. The multiplier effect describes the accumulative effect of relatively small changes to the overall result. In a typical business the key drivers are:
·retention rate of existing customers,
·number of new leads generated
·conversion rate of leads into customers
·the number of transactions per customer per year
·the average transaction vale
·the cost of goods sold as a percentage of the annual sales, and
·the business operating expenses
If you as the business owner can make small improvements in each (or most) of these key drivers, your profitability will take off … dramatically! It’s not unusual for a business to be able to double its profitability, and hence the value of the business (assuming value = 3 x annual profitability), by focusing on improving these key drivers in the business. And that’s what we help you do in 10XCoaching Club.
Whenever we have a Business Discovery Consultation with a business owner, we use the 10X Growth Equation calculator to uncover the profit improvement potential in the business. They’re usually astounded at how much they can improve their business’ profitability by simply “adjusting the levers” and “tweaking the dials”.
If you’d like to uncover the potential in your business and plug your current figures into the Growth Equation, Small Business Management Services is offering local business owners a complimentary Business Discovery Consultation. The 90 minute consultation is valued at $590.00, but is free of charge to you as a local business owner. To book your Discovery Consultation, call Sarah McCormick on (07) 5572 9217 or email us at 10xgoldcoastsouth@10x.com.au.
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