How To Grow Your Business By 33% This Year
Part I: Here’s Your GPS For Getting Results
Before I deliver this information, I am going to ask you for something at the end. I want you to be aware that I am going to ask you for something, but it’s not money.
Sitting in the frigid room at Business Mastery, I was shivering on the outside, but on the inside, I was on fire. My brain was ignited as I calculated and crunched my business’ numbers.
In our workbooks, Tony referenced the brilliant financial mind of Jay Abraham and how to grow your business exponentially. We had to decide and commit to a growth plan and what percentage of growth we planned to accomplish. Wait, I don’t even know how to read my P&L’s but you want me to come up with a growth plan? That was laughable.
Didn’t Matter… I Dove In Anyway!
Alright, I’m going to use smaller numbers because it helped me understand the math… your business might do more or less than this right now, and that’s cool! Let’s say your business has 200 customers paying you $100 each time they do business with you every month. At the end of the year, you have $240,000 in sales. Now, what are some of the ways you could think of to grow your business by 33% over the next year?
Sure, you could create more attractive offers, you could increase the size of your customer base, you might raise your prices, advertise in new areas, roll out new products or services, yes, the list can go on and on and yes, it can be done lots of ways. OR…
Raise your hand or nod your head (I can’t see what you’re doing so it’s up to you) if you think you could grow your existing customer base by 10%… going from 200 paying customers to 220 paying customers over the course of the year… not too difficult, right? 100% (there’s that easy math again).
Now, let’s say you were able to increase the value you deliver to each customer, allowing each customer transaction to go up by $10, a mere 10% increase, do you think you could do that? With your eyes closed, right? So now a customer that was paying you $100 each time is paying you $110 each time. Easy!
The last piece of this puzzle is about to fall into place, this is the number of times a customer does business with you, or, your recurrence of transactions with that single customer. Can you increase the frequency that customers purchases from you by 10%? Can you take them from one transaction to 1.1 transactions? If the answer is yes, let’s see how all of these incremental increases impact your sales.
You now have 200 customers x $110 each month. This increases your annual sales to $264,000.
But we didn’t stop there, we added 10% to our customer base so we now have 220 customers paying us $110 a month. This increases your annual sales to $290,400.
Finally, if each customer purchased from you just 1.1 times, a 10% increase, so your annual sales rise to $319,440.
TRANSLATION: YOU JUST GREW YOUR BUSINESS 33% IN ONE YEAR!
You see, small, incremental changes can increase your business dramatically. Anyone can do it, so why not you?
I know, this makes me smile too. 😁
Part II: My Confession
100% transparency (100% is easy math for me). As the owner of a business, I have a hard time talking about this. Since I was a little boy, I’ve sucked at math. Thankfully I was born with 10 fingers and 10 toes, without them I wouldn’t have gotten this far in life.
Now don’t get me wrong, I’m not stupid, but to say that I’m mathematically challenged would be the polite way to put it.
While my fingers worked well for addition and subtraction in school, it became more challenging when things had to be multiplied and divided. Thankfully calculators exist, they were soon replaced by smart phones, then smart phones you could talk to, ask the questions to and get the answer from in an almost sexy human voice. We can talk about my love affair with Siri and Alexa later. Technology makes my math challenges easier.
At this point it shouldn’t surprise you in the least when I tell you that I was less than excited to discover that I was about to sit through an entire day of business math and learning how to properly dissect P&L’s and understand the numbers behind my business. At the end of that day, we found out there was another day of this ahead. Yes, part of the price of admission to Tony Robbins Business Mastery is that you get a four-year degree in business accounting… within two days. Oh my God, what did I sign up for?
keith cunningham
Keith Cunningham took the stage and I immediately formulated an opinion of this man based on his stories, smooth southern drawl, and corny jokes. There was no way this man was going to help me learn to do math. What every teacher in my life failed to successfully accomplish, this man would suddenly fix? No way!
As I sat there with my workbook open, the picture of my business’ finances somehow became clearer. I started to understand balance sheets, I began to truly comprehend revenue, profit, and cash flow, and I started to fully understand the numbers. It wasn’t Chinese to me anymore, it was plain English. Keith Cunningham teaches the blind how to see. I was his Helen Keller and he was my Anne Sullivan.
Now, the headline of this article wasn’t about how a mathematically challenged person became numerically literate, it has to do with how to grow your business by 33%. In order for me to even write word one of this article, I needed to know and understand my numbers. If you don’t know the difference between sales, profit, margin, etc. you have no way of knowing if your numbers are healthy.
In the coming weeks, I plan to do an online mini-session on reading your financials. Who knows, maybe Keith himself will be a part of it. Stay tuned for updates on this soon.
VERY IMPORTANT: I said I was going to ask for something, so, here goes… If I brought you any value with this article, you can of course raise your hand or nod your head which no one will see online, OR, you can do one better, give it a like and share it on your favorite social media platform so that together, we can help other business owners figure this kinda stuff out.