The Power of the Profit Multiplier
Most business owners talk about improving their Revenues and Profits, but they don’t have a clear picture of what drives those numbers and without understanding that formula, they struggle to grow. Once I discovered the Profit Multiplier formula, I knew that it was possible to better understand my client’s numbers and map out strategies that could exponentially grow their business.
Here’s an example of the formula in action:
You can see through this example that even small improvements in five areas can bring significant growth to revenues and profits. However, the key to success is knowing your own numbers, executing strategies to improve them, and consistently measuring the results.
We have included a Profit Multiplier worksheet that you can download and use to determine your own numbers. To get the worksheet, click below.
To use this very powerful formula, follow these four steps:
Step 1: Determine your current numbers for each category. If you have to make a “best guess” to start that’s fine. Just know that to truly make the formula work you should be tracking each of these categories.
Step Two: Decide the categories you’d like to improve and the strategies you believe could work the best.
Step Three: Enter the percentage growth you expect to achieve by implementing the strategies in step two.
Step Four: Calculate the math from left to right in each category (current number plus the percentage growth.) Then, calculate the formula starting at the top and working your way down.
This should show the growth opportunity, both in revenue and profit.
If you have any questions on this formula or would like help putting it into action for your business, just give us a call for a FREE Profit Multiplier coaching session