What If You Improved Your Business By 10%

In this article we look at how making improvements as part of the business development process can significantly improve the profitability of a business.

The starting point to business growth is the number of “quality / relevant sales leads ” that you can obtain. The next stage is how good you are at converting leads into paying customers. Now for some trans actional businesses this may occur within minutes of contact, for other more consultative sales a lead may take years to convert.

Number of leads x Conversion Rate % = Number of Customers

So What If You Improved Your Business By 10%

Number of leads x Conversion Rate % = Number of Customers

Number of Customers x Number of Transactions = Total Sales

Total Sales x Average Sales Value = Revenue

Revenue x Margin = Profits

So lets look at an example company with the pre-improvement numbers

• Number of leads ( 100) x Conversion Rate (25%) = Number of Customers (25)
• Number of Customers (25) x Number of Transactions (2) = Total Sales (50)
• Total Sales (50) x Average Sales Value (2,000) = Revenue (100,000)
• Revenue (100,000) x Margin (25%) = Profits £25,000

What if we can make 10% improvements throughout the process

• Number of leads ( 100 becomes 110) x Conversion Rate (25% becomes 27.5%) = Number of Customers (25 becomes 30)
• Number of Customers (25 becomes 30) x Number of Transactions (2 becomes 2.2) = Total Sales (50 becomes 66)
• Total Sales (50 becomes 66) x Average Sales Value (2,000 becomes 2,200) = Revenue (100,000 becomes 145,200)
• Revenue (145,200) x Margin (25 becomes 27.5%) = Profits £39,930

Improving Your Business By 10%

• What can you do to increase the number of quality leads. Could it be that you simply need to be more proactive or do you need to try something new like adwords
• How can you you improve your conversion rate. Improved proposals, proactive follow up, incentive to encourage purchase
• What would facilitate additional sales to a customer, can you offer service, maintenance upgrades etc
• Would it be possible to increase the average sales value by adding high value low cost extras
• Can you decrease operational costs to allow for a margin improvement

Want To Improve Your Business By 10%

For more information on business development improvements click here. To contact Andrew Goode and experienced and professional business development click here