You already know success requires hard work. In fact, it is hard work on the right things. Based on what successful businesses have done, let me explain what these right things are.

In Part 1 I started with CASH.

In Part 2 I talked about KNOWING YOUR GOOD COSTS FROM YOUR BAD COSTS.

In Part 3 I discussed the power of pricing: STOP UNDER-PRICING!

Now I exhort you to STOP SMALL AMBITIONS!

For what must seem like an age you have struggled – and succeeded – valiantly to keep your business going during the downturn. T o get through the month, the week, just the day has seemed like a fantastic achievement. And indeed it has been – many businesses did not achieve as much.

If it feels like trading conditions are a bit easier, it would be the most natural reaction in the world to feel pleased that an edge has gone off your worries, that you can have a decent night’s sleep.

Then you wake up with the ambition to get through the day, the week, the month relatively anxiety-free. Sure there are always pressures and demanding schedules, but the ambition to avoid that gnawing, dark fear that worries about an impending End, seems to be ambition enough.

In fact, at this time of turnaround in the economy (for that is what we are told), our ambitions MUST BE HIGHER!

This is the very time to summon every joule of personal energy, every sparkle of positive thinking and STOP SMALL AMBITIONS!

How so?

Let me explain.

In Part 3 of this series of articles, we saw how raising prices to boost the top line can significantly raise your business’ bottom line. Let’s now spend a bit more time on the top line.

In good times, let alone tough times, if we were to propose increasing top line revenues by 17%, you could be forgiven for coughing in disbelief.

Actually, it is not so outlandish a goal – once it is broken down into bite-size pieces.

Where does top line revenue come from? It is a function of the number of customers you have, the number of times they buy from you, and the price they pay when they do:

So consider a business with the following figures: This business has 100 customers who buy twice a year and spend £1,800 each time they do:

 

This means that the business’ gross income is:

100 x £1,800 x 2 = £360,000 pa

Now suppose this business could brainstorm some ideas that, upon implementation, were able to increase the number of its customers by 3%, the average value by just, say, 3%, and the frequency of buying by 10%:

*What this signifies is not so much that each customer is now buying 2.2 times a year but, rather, that 1 in 10 customers are buying one more time each year (ie 3 times). 2.2 is the simple average figure.

So what is the gross income now after these seemingly modest improvements in the components of revenue?

103 x £1,854 x 2.2 = £420,116

This is an increase of £60,116 or no less than 16.7%!

Your ambitions need to include tackling what you can do to acquire 3% more customers, raise revenue by 3%, and increase the frequency of buying by 10%. The arithmetic – as it is for all businesses – is that the combined effect is to increase gross revenue by 16.7%!

Just as you need first to understand, and then actively to manage, the cost levers of your business, so too you must be very active in managing the income levers of your business.

STOP SMALL AMBITIONS!

If you would like an AugMentor Partner to work with you to help you develop an action plan to grow the top line income of your business, then please contact us