You may not realize it, but there’s only five ways to truly multiply profits … and if you can bump up each way or factor just 10%, you’ll get a massive 61% improvement on your bottom-line.

For most of us who are familiar with a conventional “Revenue – Expenses = Profits” model, this may seem puzzling, or even paradoxical.

After all, it seems you can only increase revenues, or decrease expenses (or a combination of both) to mathematically boost your profits … right?

Actually, there are a few other factors involved in a unique formula called the “5 Ways” of maxing profits.

So what are these “5 Ways”?

To multiply profits, you simply need to increase your leads, increase the conversion rate of your leads into buying customers, increase the average dollar amount of what they buy, increase the number of times (transactions) they buy and increase your profit margins.

Note the key word is “simple” … and sometimes simple isn’t easy.

But it can become “easier” when you realize there are literally HUNDREDS of strategies to boost these factors individually or collectively, and if you can just increase each factor a measly 10% (while keeping your costs in check – and you can – if you are smart about it), you’ll see a 61% increase on the bottom line.

Don’t believe it?

Take a look:

First, multiply your Leads by your Conversion Rate for your total number of Customers
Then, multiply your Customers by your Avg. Value/Dollar Sale AND multiply again by your Number of Transactions to get your Revenue
Finally, multiply your Revenue by your Profit Margins for your Profit

In your company, let’s say you have either estimated or fully determined the following numbers:

4,000 leads X 25% conversion rate = 1000 Customers
1000 customers X $100 average sale X 2 sales per customer = $200,000 Revenue
$200,000 revenue X 25% profit margin = $50,000 Profit

What does all of this mean?

Simply put, it means you are running a business that converts 1 in 4 prospects into paying customers, and those customers average two purchases at $100 per purchase each year – and your company enjoys a 25% profit margin on revenues of $200,000.

It also means your total profit for the year is $50,000.

So what would happen if, over the course of the next year, you could increase results by just 10% in each of the 5 areas?

Let’s do it, and then let’s take a look at what happens to your bottom line:

4,400 X 27.5% = 1210 Customers
1210 X $110 X 2.2 = $292,820 Revenue
$292,820 X 27.5% = $80,525.50 Profit

Examine the numbers closely and you’ll see the 10% increase is incremental (for example a 10% increase of 25% means a 2.2% increase to 27.5%, not 35%) – which means you could easily nudge numbers up by that amount over a period of months – or even weeks.

The bottom-line … is that the new bottom-line looks very interesting, doesn’t it?

Even though we’ve increased each factor by just 10% (including top line revenue), we were able to boost bottom-line profit by 61% – or a total of $30,525.50.

What could you do with an extra $30,000 in your business this year?

Think 10% is impressive?

Do some math on your own and see what the numbers look like if you increase 30%, 50% or even 100% down the line.

And what’s an easy way to do the math?

Just follow this link to our simple “5 Ways” calculator …

http://www.actioncoach.com/free-business-calculator-profit.php

… or you can download a complimentary “5 Ways” iPhone app, which also allows you to do calculations and gives you some specific strategies on how to boost each factor.

Hope you got some new insight on an old and seemingly paradoxical question … and hopefully the “5 Ways” will help you get your most profitable year in business ever!

P.S.
One other note … you may be tempted to start working all the factors at once, but the two “lowest hanging fruits” are your price points and profit margins.

It’s VERY easy to raise your prices 10%. Most of your customers won’t even know the difference, and (to borrow a phrase from that “dead science” called economics) all other things being equal, any increase will go straight to your bottom-line.

Biography
Brad is the World’s #1 Business Coach. As Founder and Chairman of ActionCOACH, he leads the world’s largest and best business coaching Team. Entrepreneur magazine has for 6 years running voted ActionCOACH #1 and with more than 1,000 offices in 47 countries, helping business people and business owners create more success every day, you can understand why.

“Life is about experiences … usually with family and friends … I try to squeeze the most out of life I can … I love great times, great food, great wines, great shows and movies, great travel, great rums, great cigars, and great sporting events … Most of all I love my kids, my work and my friends …”

Brad Sugars is an entrepreneur, business coach, educator, seminar presenter and business advice expert. Brad Sugars is author of the Instant Success series and CEO of ActionCOACH Business Coaching.