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CHAPTER 5 MULTIPLYING YOUR BUSINESS PROFITS
The Impact of Increasing Your Profit Variables
by 20%
In the next part of this chapter, you are going to be given a
whole toolbox of marketing strategies that will allow you to
increase these profit variables by 20% and more. From the
table below, you can see that a 20% increase in the five
variables will result your net profit by more than double to
$328,458 (a 173% increase).
Increase by 20%
Leads 40,000 48,000
x Conversion Rate 15% 18%
= Number of Customers 6,000 8,640
x Average Dollar Purchase $80 $105.6
x No. of Repeat Purchases 1 x/yr 1.2 x/yr
= Sales Revenue $480,000 $1,094,860
x Net Profit Margin 25% 30%
= Net Profits $120,000 $328,458
Now that you have seen the power of how consistent and
small increments can lead to significant effects on your bottom
line, let’s now learn how we can increase each of the five
profit variables.
Profit Variable 1: Increase Leads
The first thing that any business should do to increase its sales
and profits is to generate more leads. The more potential
customers you have, the more likely you are to make a sale.
The fastest and most powerful way to generate leads is to
advertise. So what prevents most businesses from advertising?
Many small businesses feel that they cannot afford the
large expense.
138 SECRETS OF BUILDING MULTI-MILLION DOLLAR BUSINESSES
