I have just come from another fantastic networking lunch and wanted to share some of the learning that we had from Christina Jackson of Action Coach. We had some business training from external business people or from existing members, which often gives us some great insight.
Anyway, this month we Christina Jackson who runs seminars and offers business coaching to small and medium sized businesses and in 10 minutes she managed to show us all how we can potentially increase our profits by making some small changes to our business. Something all business owners I know would like to do. One of the interesting things for me during her presentation was how few people in the room were calculating their leads and conversions in a structured way and it served as a great reminder about how important it is to stay on top of this valuable information in our own businesses if we want to stay ahead of the game, particularly at the moment.
She began by explaining how important it is that we measure our leads and conversions in our business. It is only by measuring these numbers in our own businesses that we can figure out what we need to change if we want to create more revenue and more profit.
She then showed us a simple diagram outlining the 5 areas where we can improve our business development activity… Starting out by improving leads, conversions, average spend, repeat purchases and business margin. She then showed us a formula for measuring profit which equals calculating the number of leads and multiplying that by the number of conversions which equals the number of customers. Multiplying that by the average customer spend per transaction x the number of purchases annually which equals our turnover. Multiplying our turnover by our business margins equals our profit.
You can see how by making a 10% improvement across the 5 key areas of your business can make a substantial difference to your bottom-line. So why not do a little number crunching in your own business and see what kind of a difference it can make.
Christina runs seminars and offers business coaching to small and medium sized businesses in the Kingston upon Thames and Richmond areas.