Video: Courtesy of Panalitix Proprietory Ltd via the Taxman Ltd.
When I ask a business owner “what’s your plan for next year: how much do you think you can increase your sales?” typically the answer is a small number like “five percent to ten percent if we do really well that would be a great year.”
But what I find is when you really understand the numbers most businesses can achieve much more than they ever thought possible and to do that it’s really important that you understand the numbers for your business.
First of all think about how many customers you have in your business.
Secondly, think about how many times those customers buy from you.
Thirdly, think about the average spend when those customers
If you increase each of those numbers by just ten percent your sales would increase by over thirty three percent and that’s a quite a dramatic number.
And if you broke those down into those three areas, a ten percent increase is certainly doable in many businesses. So if you’re doing a million now you increase those three numbers -customers transaction, frequency transaction, value – by ten percent each you’ll go to 1,100,000 and in many businesses you know a lot of that would drop straight to the bottom line.
What I suggest you do is talk to your accountant to understand your numbers, what the dynamics are of your business in terms of those numbers and then plan together to increase each of those numbers by at least ten percent and then go and enjoy the rewards of that.
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