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4 Ways to Grow Your Business >
The Power of Synergy - Combining the Four Ways to Grow Your Business
We’ve now looked separately at the 4 Ways to Grow Your Business. Now we’ll now demonstrate the full power of the different Ways working together.
Let’s say you have a customer base of 1,000, that each of them buys from you once a year and that the average value of each sale is £100. This would give you annual sales of £100,000.
Let’s now say that you have been able to increase the number of customers of the type you want by 10% to 1,100. With no other changes, this would increase your annual sales to £110,000 – a 10% increase.
Using some of the strategies we have discussed, let’s now say that you have also been able to increase the number of times they buy from you by 10% to 1.1 times a year. With 1,100 customers and an average sale price of £100, your annual sales would now be £121,000 – a 21% increase.
Finally, you are also able to increase the average value of each sale by 10% to £110. Your annual sales would now be £133,100 – an increase of 33.1%.
So, a 10% increase in each area gives a combined increase of 33.1% overall. That is the Power of Synergy!
Hopefully, the increase will surprise, impress and excite you.
Why not use the table in the next section to crunch the numbers for yourself and see what it could mean for your business!
The Power of Synergy in Your Business
No. of Customers |
x |
No. of Dealings |
x |
Average £ Sale |
= |
Turnover |
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Start with the current situation: |
1,000 |
x |
1 |
x |
£100 |
= |
£100,000 |
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Complete your own business figures below: |
|
x |
|
x |
£ |
= |
£ |
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|
|
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|
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Look at what happens to turnover when just one area, winning more customers, is increased by 10%. |
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1,100 |
x |
1 |
x |
£100 |
= |
£110,000 |
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Repeat the exercise for your business: |
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x |
|
x |
£ |
= |
£ |
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Now let's increase the number of dealings by 10% as well. |
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1,100 |
x |
1.1 |
x |
£100 |
= |
£121,000 |
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And your business? |
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x |
|
x |
£ |
= |
£ |
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And if we now also increase the average sale value by 10%… |
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|
|
|
|
|
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1,100 |
x |
1.1 |
x |
£110 |
= |
£133,100 |
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Now calculate the impact on your business: |
|
x |
|
x |
£ |
= |
£ |
Having completed the figures for your own business you can now see the potential that exists. Increasing each area at the same time has a multiplier effect of increasing turnover, not by 10% as might be expected, but by 33.1%.
If you were to concentrate on only one area, say winning more customers, you’d have to achieve a massive increase of nearly one third to achieve a similar improvement in turnover.
Finally, review which of the 4 Ways to Grow Your Business you are focussed on right now. Is it just one, two, three or is it all four?
How Jamesons Can Help You.
Over the years, not only have we assisted our clients in implementing strategies to grow their businesses, we have successfully applied the 4 Ways to help grow our own business.
Growing and developing your business is an ongoing process to which you must constantly pay attention if you are to be successful. The mantra of working ON you business rather than IN it has never been more important than it is in today’s difficult climate.
We offer a broad range of services to support the owner managed business so, if your goal is to grow your business, then we would be delighted to offer you our expertise to make sure that your valuable time is spent working ON and not IN your business.
4 Ways to Grow Your Business
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