A SYSTEMATIC APPROACH
TO GROWING A BUSINESS
Take a look at the business model below
A SYSTEMATIC APPROACH
Taking the model above and extrapolating to include existing clients and for our example business the results would look something like this:
| Key Performance Indictators (KPI's) | KPI | Result | Increase | KPI | Future | Increase | |
| Exisiting Client Base | 600 | 600 | |||||
| KPI 3 Average No. Transactions Per Annum | No. | 12 | 7,200 | 10% | 13.2 | 7,920 | 110% |
| KPI 4 Average Transaction Value | £ | £20 | £144,000 | 10% | £22 | 174,240 | 121% |
| KPI 5 Gross Profit Margin | % | 55% | £79,200 | 10% | 61% | 105,415 | 133% |
| KPI 6 Number of Referals per Client | No. | 1 | £158,400 | 10% | 1.1 | 221,372 | 140% |
| KPI 7 Average Buying Lifetime in Years | No. | 3 | £475,200 | 10% | 3.3 | 730,527 | 154% |
Sales to existing customers increase from £158,400 per annum to £221,372. Whether all of this is translated to profits depends on whether the business can accommodate the additional sales within the existing cost structure, personnel and / or facilities.
The model works just as well for a small company as for a large one. To summarise the full impact on our example business by taking into account the additional new business and impact on existing clients the picture looks like this: Total sales per annum are up from £166,320 to £234,765, an increase of £68,554 or 141%. A modest 10% increase in each of the main business drivers.
| Cumulative Impact on the Business | Today | Future | Increase | % |
| Total increase in annual sales | £166,320 | £234,765 | £68,445 | 141% |
| Total increase in lifetime customer value | £498,960 | £774,724 | £275, 764 | 155% |
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