There are FIVE measures that you need to know in your business, according to Brad Sugars’ Action Coach model:
- Conversion Rate
- Average Sale Value
- #Sales per Customer
- Profit Margin
Many people I consult with are not able to tell me most of these numbers. That’s scary. No matter what business you run, you need to know the numbers and understand their relationships and impact. Never rely on others to totally look after your finances and never relinquish responsibility for knowing what those numbers are and how they are arrived at. I’ve worked with one woman running $750million dollar business who had teams of people in Finance – the CEO ALWAYS knew her key numbers and if any were under-par she would be asking short and sharp questions!
To increase business – increase any one or more of the above numbers.
Increasing prices always makes people nervous. “I can’t put up my prices – I’ll lose customers”. My experience has been that if you have a good product and good service, people don’t baulk too much at modest price rises.
If you increase each of the above 5 measures even minimally, you get a compound effect on your bottom line. The trick is not to increase them all at once but progressively tweak each one.
So, where are you going to start?