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Just the other day, I was watching a Tony Robbins’ video where he was sharing about one of his experiences with his golf coach.
His coach explained that the difference between an excellent swing and a horrible swing is simply a matter of a few millimetres. Just by making tiny adjustments of a few millimetres, he could make drastic improvements to his game.
Similar, you don’t have to do pull one of those company-wide overhauls just to obtain big improvements in your bottom line.
For start-ups, it is all about understanding and then fine-tuning a few elements that can directly impact your bottom line.
For every business, there are 5 general factors that lead to your bottom line.
2. Conversion Rate
3. Number of Transaction
4. Average Dollar Sale
Every little bit of improvement to any of these factor can add up to make a substantial difference on your final figure.
If you are able improve each factor by a mere 5% (e.g. instead of 100 leads, you gather 105 leads), you would then collectively be able to achieve a 25% growth on your bottom line!
1) Tweak Your Processes
Isolate and study each of your process carefully to find if there is another way of doing things.
Could you remove the name field on your squeeze page to garner more leads? Or could you create a guarantee for your products to encourage easier conversions?
Perhaps it could be as simple as sourcing for a cheaper supplier or purchasing your best selling product in bulk so that you can lower costs and improve your margins by 5%.
When you are at this stage, let yourself go and allow yourself to think out of the box to collect as many options as possible.
No idea is too far-fetched and no suggestion too outrageous. Some options may not be applicable at this current stage of your business, but you never know if you might find it helpful a few months down the road.
2) Track your statistics
Simply measuring the performance of your bottom line is not good enough. You need to invest in good analytics to track your sales process.
This enables you to find out exactly which part of the 5 factors is your most profitable section. Perhaps your conversions are excellent but your lead gathering process is a tad wasteful.
Or you actually have a great sales team but the margins are too low. Having a good system of analytics allows you to pinpoint your weaknesses and improve on it.
3) Repeat & Adjust
It is recommended that you make each of these minor tweaks individually so that you can accurately track the response.
If you were to make 4 changes simultaneously and yield a 20% growth, you might erroneously attribute it as a 5% improvement across all 4 factors when it could have been just due to one.
Once you have optimized one factor, repeat the process and adjust the other factors accordingly. It is important to understand that business optimization is not a static formula.
Instead, it is a dynamic process that has to be constantly tweaked to yield the intended results.
Actually, multiplying your profits need not be as difficult as it sounds. You need not invent a ground-breaking product nor invest heavily into research and development.
All it takes is a keen eye for details and a few tweaks to your business process.
Don’t forget, you are just a few millimetres away from drastically multiplying your profits!
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