Struggling to grow your business, With No Money? You don’t need to borrow money to make it big. Here are 4 Quick and Easy ways for growing your business, profits and income in Any Economy!
To grow your business with no money you need to “Maximizing what you Already Have” To create better results, achieving more with less in the most important areas of your business. You need to leverage your time, your efforts, your money, and your knowledge by implementing small improvements in the most important key areas of your business over a long period of time. Slow and steady, just like a sniper - taking out competitors without them ever sees you coming.... A deadly strategy
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The Best Way To Grow Your Business Without Money
“The best way to grow your business is to take a lesson from The Tortoise and the Hare. Slow and steady always wins the race. It’s a marathon, not a sprint! Grow your business slow. The first goal in business is to stay in business.
You don’t need to borrow money to make it big. In fact, my most successful businesses was the ones I started from scratch, with almost no money.
Instead, save, barter and create strategic alliances for what you need and then expand. From small steps to giant leaps. It lowers risk and minimizes mistakes. And that’s the truth! Debt might not be evil, but taking on too much debt will hold your business back and lead to a lot of stressful, sleepless nights. You can't borrow yourself out of debt, but you can certainly go broke trying to.
To Grow Your Business Without Money, You Need To Fix Profit First,
This will create positive cash flow from operations (not borrowed money) and create healthy sustainable growth and prosperity that you’ll eventually experience the freedom that comes with owning a business that isn’t controlled by creditors. Financial freedom means you control your finances instead of being controlled by them.
In order to succeed in growing any business, you must first understand what drives Growth, Profit, and Cash flow and how you can affect those drivers in order to achieve your goals. The first critical step to boosting growth, cash flow and profitability is to identify the key numbers of these drivers in your business is.
There are only 4 main drivers that have the potential to dramatically increase your growth, profit and income of your business… Now here is the existing part. You don’t have to make big improvements in each of these 4 areas to see massive results. (See images below) In your business right now there are overlooked opportunities, hidden assets, and areas screaming to perform better.
You may already know how to increase your sales, how to reduce cost and how to grow your business. The reality is that if you don't know and measure the numbers in these 4 main drivers you will not know how successful your strategies was or what you need to change to get the results you want. To put it simple, hoe are you ever going to make the right financial decisions in your business if you don't even know how profitable you really are, or how many sales you need to be profitable
"If you don't know your numbers you don't know your business."
- The Profit - Marcus Lemonis -
This is one of the things that makes the difference between Successful and Not so successful business owners. It is shocking to see how many small business owners don't know even the basic numbers in their businesses. "And it’s Not your fault"
The important point is that you have to measure, them to be able to improve them. You need to have a “scoreboard” You can’t play the game of business without keeping score, otherwise you’re not going to know if you are winning or losing the game.
The problem is, you’re not going to get the numbers you need from your year-end financial statements or your accounting system. And unfortunately, this is about all the numbers the average business owner has. You've got to add up some of your own numbers that is based on your current reality so that you can measure your progress from the point at which you are now. This will empower you to make the right daily decisions for the future. For more information on how to do this you can go to: How To Reduce Cost In Business Safely: Step By Step!
The 4 Main Factors Affecting Your Growth, Profits and Income
1.
Your Total sales every month.
2.
Your Variable costs you have in producing the products and services you sell. These are variable costs because they vary as sales increase or decrease.
3.
The Markup % or the price you charge.
4.
Your Fixed costs, for running the business. These are cost that do not change
I am going to share with you a simple way of looking at your numbers in terms of Profit, Revenue, Cash flow and Income, without hiring a financial expert or having outstanding finance skills and without being good at Math’s! Adding the ability of foresight so you can “see around corners” and prepare your business for what is coming. It will allow you to manage your business a 100 % better, Reduce risk, have confidence in your decisions and make you considerably more profitable and grow your business substantially
How To Grow Your Business, Profit and Income With No Money
Allow me to demonstrate - They say seeing is believing:
- Let's take this business for example that is doing 112 000 p/m in Sales.
- The Variable Cost or COGS for these sales was 89 700p/m, with a Markup % of 24.9% on products.
- The monthly Fixed Cost for running the business was 19 500 per month,
- Making a Net Profit of 2,800p/m (2.5% of Total Sales)
Look what happens if we only improve each of the 4 factors with 1%.
A large increase in profit and income of 80%. Small improvements in the most important key areas of your business can have a huge impact. Just think how this can positively influence your cash flow and having money to grow even more.
Can you see why it is important to focus on all 4 factors? Anybody can make a 1% improvement in a very short time without risk of losing sales. Remember to use the Free Tools that we made available to help you.
Focus On Profits And Cash Flow - Not Revenue
Millions of others, including me, have followed the wrong advice from so-called experts, and it has cost us dearly. Every time I hear things like “10 X your business or double your sales”, I get burning feeling in my stomach because I know for the majority of businesses it will mean sure death. Over the last 30 years in business I have lost a few of the 41 companies that I have owned due to this old traditional formula. I had to learn the hard way and that's how I know what works and what not. ‘If only someone had told me this before!’
We think that to make more money we have to increase sales, get more customers or build a bigger business. Sure it is good to grow and you have to, but make sure you have all the small but very important facts. If not, it may cost you everything you work so hard for.
"This age-old formula turns great businesses into cash-eating monsters, trapping you in a day-to-day, check-to-check struggle to survive".
- Mike Michalowicz -
Growing revenue for the sake of it rarely creates successes. The reality for businesses is if they increase sales and grow, their expenses will increase, profit margins will decrease even more and increase the pressure on already struggling cash flow that will lead to just one more of the millions of failed business statistics.
That's why you have to focus on profit to create positive cash flow from operations (not borrowed money) to create healthy sustainable growth and prosperity so that you can experience the freedom that comes with owning a business that isn’t controlled by creditors.
Let's look at the next scenarios. We will compare different actions to try to accomplish the same result as in the example above of 80% increase is profit.
First, let see what happens if we focus only on Increasing Sales.
We had to increase sales by 10% to realize the previous profit increase of 80% -
Next, let see what happens if we Reduce All Cost.
We only had to Reduce Cost with 2% to realize the same Profit increase of 80% -
Now let see what happens if we Increase Prices.
We only had to Increase Prices with 2,5% to realize the same Profit increase of 80% -
Let's see what happens if we make the same improvements as before.
To Grow Your Profit and Income You Need To Measure The Right Numbers
But these 4 indicators are "Lag Indicators" of the results you want. To increase your growth, profit and income you need to measure the Lead indicators, the day-to-day activities that lead to the result of these 4 vital indicators. Identify and Focus on the critical few day-to-day activities that you can improve (Lead indicators) within these 4 key business drivers to create the results you want.
For instance, the Leading indicators for Sales may include:
- Total leads or potential customers you meet every month
- How many of these leads you convert into customers
- How frequency customers buy from you every month
- The average amount of money a customer spend every time they buy from you
The Leading indicators for variable costs (COGS) Cost Of Goods Sold may include:
- The cost for each product
- Spillage, Waste
- Productivity
- Workflow
- Customer cost
Variable cost is normally your biggest expense. In general, if you are like the majority of businesses out there this cost will make up plus minus 75% of your total expenses. A small saving or improvement of only 1% in this area can have a huge increase of up to 70% in net profit
The Leading indicators for Markup % may include:
- The price you charge
- The markup percentage for your every product and service
- How much of your sales are coming from your highest and lowest margin products
If your business operates at a 25% markup, a 2% increase in price can have a 60% improvement to your profitability, assuming your sales volume and your fixed overheads costs remain constant.
The Leading indicators for Fixed Cost may include:
- Rent
- Utilities
- Insurance
- All your monthly fixed expenses.
Now that you understand the different Lead and Lagging indicators It is time to identify your own Lead indicators in the 4 main business drivers and focus on improving your day-to-day activities that will create the results you want.
Thanks for reading the post
Talk soon
Hans
Warning
Important: Now, I'm not recommending you simply dive in and start changing things. Action without a plan in business is never a good idea and you may end up taking some serious risks. Before you start selecting and implementing strategies to improve your profit, you need to determine what your current numbers and situation are.