Business ideas

When you Google anything to do with increasing sales you will have thirty-one million six-hundred thousand websites to choose from! Talk about information overload!

When it comes to ideas for increasing your business revenues, it is a daunting task just to know where to start. The one place you should NOT start is by cutting your prices.

After you consider all of the available advice, the guerilla marketing strategies, the myriad of how to articles and books, there are really only THREE ways to increase your business:

1. Increase your number of customers or clients.
2. Increase the average size of each sale per
customer.
3. Increase the number of times a customer
returns and buys again (annually).

That is it: number, order size and frequency. Set about learning these three numbers as regards whatever business you are in and you will be able to develop a workable plan that can result in additional business.

Is calculating your number of customers, figuring the average amount they spend per transaction and determining how often they purchase worth your time and effort?

Let us set up an imaginary example. Say that you have 2,000 clients that average $20 per transaction and that they typically make three purchases in a 12 month period.

2,000 x $20 x 3 amounts to $120,000 total revenue in one year.

You can actually start with your total annual revenue and work this formula backwards the first time you do it, adjusting and tweaking the numbers to fit the total.

Here is the magic of using this formula: if you can increase each of these 3 factors by 10%, you will achieve a 33.1% increase in revenue!

A 10% increase for each number looks like this:

2,000 customers x 110% is 2,200, an increase of 200
$20 per sale x 110% is $22, an increase of $2
3 visits per year x 110% amounts to 3.3

2,200 x $22 x 3.3 is $159,720, an increase of 33.1%

A 25% increase for each number will DOUBLE your sales:

2,000 customers x 125% is 2,500, an increase of 500
$20 x 125% equals $25, an increase of $5
3 visits per year x 125% is 3.75

2,500 x $25 x 3.75 is $234,375. You DOUBLE sales!

These examples are over-simplified but they clearly show the sheer power of how to grow your business via this powerful formula. These examples also show how vital it is to KNOW these three numbers as regards your own business.

Creative thinking is the answer to increasing any one or all three of the above factors.

Maximize what you already have. Search out new business using NEW methods, not just continually doing what everyone else does.

Pay a higher commission on the FIRST sale to any NEW client. Your salespeople will be motivated to find new business and your revenues will increase by leaps and bounds.

Initiate a program to gain back old clients that have wandered to the competition. Do this on the basis that it way more expensive to get a brand new customer than to gain back an old one. 80% of lost clients did not abandon you for a reason or reasons that cannot be overcome. Work it!

You need to constantly search out ways you can out-think, out-perform and out-earn your competition. Test rather than plunge. Bob and weave. Turn your customers into your best sales force. It CAN be done and it IS being done by lots of small fish in big tanks everywhere.

Bob Schumacher gives entrepreneurs a clear coffee-shop English perspective on how to steer their business or profession into the top 20% who achieve 80% of the business and profits. Visit http://www.20do80.com for a complete directory of his articles and books that are both free and nearly free.

Article Source: ArticlesBase.com - The Three Things You Must Know In Order To Increase Your Sales Without Cutting Prices