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CHAPTER 5 MULTIPLYING YOUR BUSINESS PROFITS

by ‘Average Dollar Purchase’ and ‘Number of Repeat
Purchases’, you will get ‘Total Sales Revenue.’

Number of CUSTOMERS
X AVERAGE DOLLAR PURCHASE
X NUMBER OF REPEAT PURCHASES

= Total SALES REVENUE

In others words, if you want to INCREASE your company’s
sales revenue, you have to focus on:
1) Increasing Leads
2) Increasing Conversion Rate
3) Increasing Average Dollar Purchase
4) Increasing Number of Repeat Purchases or increasing all

four factors at the same time.

5) Net Profit Margins
If you own a clothes retail store and sell 6,000 garments for
$80 each, you don’t actually get to keep that all of that
$480,000 (i.e. Sales Revenue = $80 x 6,000) as a business
owner. You have to deduct the cost of making the product/
delivering the service.

For example, if it costs you $30 to produce a garment, your
gross profits per sale will be $80- $30 = $50. If you sell a
total of 6,000 garments a year, your total gross profits would
be $6,000 x 50 = $300,000.

The next cost you must deduct are your total overheads.
Overheads are the cost of running the business, such as rentals
and salaries. For example, if your annual overheads are
$180,000, then your Net Profit would be $300,000 -
$180,000 = $120,000.

SECRETS OF BUILDING MULTI-MILLION DOLLAR BUSINESSES 133