As 2016 comes to an end, it is time to reflect on our new plans for the year ahead. A great new year’s resolution would be to significantly grow our business’, but we often associate growing a business as something extremely complex, involving the implementation of multiple new strategies or tactics.
I thought the same way until I discovered this simple formula by business expert Jay Abraham.
I’m about to share with you the simplest formula to bring your business to the next level in 2015.This formula applies to any business; whether you are an independent broker, boat dealer or one of the biggest shipyards worldwide.
The beauty of this formula is that it is extremely easy to understand and implement. Over and above that, it has a compounding effect, so you don’t need to double your efforts if you want to double your business. Let me explain.
There are only three ways you can grow your business, any business:
1) Increase the number of customers
2) Increase the average transaction value (price you sell your products or services)
3) Increase the frequency of your sales
So let’s imagine that you’re a charter broker. You have 50 customers per year, each charter is sold for $2000.00 and each client orders once a year.
- Customers: 50
- Average price: $2000.00
- Frequency: 1/year
Your business would be grossing $100.000 per year.
Let’s imagine improving each one of those areas by 10%, how much growth do you think your business would have?
The majority of people will respond 10% which makes sense, but they're wrong. Let’s review it below:
- Customers: 50 customers + 10% = 55
- Average Price: $2000.00 + 10% = $2200.00
- Frequency: 1/year + 10% = 1.1/year
Total= 55 x $2200x 1.1 = $133,100 or a growth of 33.1%.
So what would it really take to double your business?
You simply need to improve each one of those areas by 25% and you will double your business.
- 50 customers +
- Customers: 50 customers + 25% = 62.5
- Average Price: $2000.00 + 25% = $2500.00
Frequency: 1/year + 25% = 1.25/ year
Total = 75 customers x $2500.00 x 1.25 = 195,312 = DOUBLE YOUR BUSINESS.
So good luck for 2017 and make sure to remember this formula. It is simple to remember, easy to implement and is the easiest way to grow any business.
What are you excited about for 2017 and what are the biggest things holding you back from achieving your goals?
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