What do all businesses want?  More customers, more revenue, more profits and more cash!

These are all outcomes.  What are the drivers of these outcomes?   

By breaking down these outcomes into their lowest common denominator, we can then determine what strategies we can implement to improve these drives.  Let’s take a closer look…

The 2 basic drives for More Customers are # of Leads & your Conversion Rate.

We generate More Revenue by multiplying our customers by their Average # of Transactions and their Ave Dollar Sale.  Then multiply our revenue by our Profit Margin to get Profits.

Here’s the profit formula you should follow.

#Leads X Conversion Rate = Customers 
X
Average # of Transaction X Average $ Sale = Revenue
X
Profit Margin = Profits

Finally profits are great but are just theory if we can’t convert them into Cash.  You need to know that much of your profits are Held  Up in your Accounts Receivables and/or your Inventory.

Track these 5 Profit Drivers and 2 Cash Holders and then develop strategies to increase each of these drivers and reduce the 2 Cash Holders.  If you do this you will quickly see a significant increase in your bottom line profits and your cash flow.

For more information check out the homepage of my website www.JacksonvilleCOACH.com for free white papers, e-books, & business calculators.

Steve Goranson, MBA
Certified ActionCOACH Business Coach