As markets possibly tighten, it a good time to refocus on basics and what contributes to our bottom line. One of the first things we often do is cut costs, but once you weed out unnecessary expenses, there is a limit where you can't cut costs any further without impacting what you offer and what makes your business special. The next thing to look at is sales, and to keep in mind that the end goal is profit determine entirely by number of sales and margin on each sale.
No. Leads x % Conversion x % Profit = Financial Success
So ask yourself these questions
1. How can you generate more leads?
2. How can you improve the rate at which I convert these leads into sales?
3. How can you increase the margin on your products and services so you make more money for each sale?
Increasing any of these areas will add to your bottom line, but increase all three will have a cumulative effect.
Just say you have 100 leads per month and convert 20% of them and make on average $1,000 of profit on each sale. The profit for the month would be $20,000.
If you improve each area by 10% then you will have 110 leads per month and convert 22% of them and make on average $1,100 of profit on each sale. The profit for the month would be $26,620.
So a 10% improve in each of the 3 areas would give a 33% in profit.