When you’re busy fighting the good fight of small business survival, it’s incredibly easy to lose perspective. Faced with a terrifying daily list of minor yet urgent tasks to complete, it’s far from simple to carve out the time to analyze your growth strategy.

There comes a time in every small business owner’s life when they suddenly realize they’re working many different jobs to keep their ship afloat. It’s an uncomfortable realization when faced with the reality of a self-created system that has no chance of scaling upward.

MBA’s and Business “Gurus” around the world are struggling to stay relevant in the information age. How do they stay in business…by spreading propaganda and making business growth extra-terrestrial and much harder than it seems to be. Business growth is not complex when you can step back and break it down. Learn just how simple it is to create business growth and give those pesky Harvard MBA’s a run for their money.

 “ Everything should be made as simple as possible,  but no simpler.” – Albert Einstein

zlouisdharma.com

By next month there will be a dozen more viable methods your company can choose from. Maybe a new social media rises that you can take advantage of, or maybe a new technology surfaces that makes it 27% more efficient to fulfill your orders.

There are a million and one methods and tactics you can use and guess what; using all of them will bankrupt your company. Most methods actually work but it has to be in the right scenario; what works for a competitor may not work for you. Every method is an opportunity cost so you must choose wisely.

Instead I am going to give you tangible frameworks that you can use to pick the most optimal methods for your company.

It starts by understanding that there are only two ways to grow your business.

Yes, only two ways; I told you I would keep it simple.

Growth Strategy starts with ONLY two methods!

1.    Increase the number of clients

2.    Increase the value of each client 

Let’s look at some examples.

Let’s say you have a hundred clients.

Now imagine if you double that to two hundred; you have essentially doubled your growth.

Ok now let’s say you sell a $100 product and that each client is worth $100 to you.

Imagine if you doubled that to $200; then you essentially doubled your growth.

Once again you may look at this and question the simplicity of it. The devil is in the details and in the “Business Growth Manifesto” it will go far deeper into this. What usually happens is that companies and entrepreneurs get caught up in the details and focus on the wrong areas because they haven’t been able to separate the trees from the woods.

This is why you must take a step back and look at the simplicity of true business growth.

Let me repeat it again.

The two ways to grow your business are:

1.    Increase the number of clients

2.    Increase the value of each client 

When you continually focus on these two categories you will be surprised just how irrelevant a lot of most business activities are. Every action should clearly fall into one of these categories otherwise it is an opportunity cost that you may want to reconsider.

I am staggered when I go into companies and find out no one really knows how many active clients the company has at present. I am shocked to find out that no one knows how much an average client is worth to them. Just knowing that number alone gives you so much clarity on many executive decisions in your company.

louisdharma.com

 

The one ratio you must understand

THE MAGIC RATIO:     CLV:CA

There are no ifs or buts; you must know this ratio period.

So what does this ratio stand for, lets dig into it.

The two major numbers are:

Client Lifetime Value (CLV); how much is a client worth to you over a period of time.

Client acquisition (CA); how much is incurred in acquiring a new client.

If your client lifetime value is higher than the costs incurred to attain that client, then your company is on the right track.

Let’s look at client lifetime value

·      Let’s say a new client generates $200 per year for your company.

·      You know on average a client stays for one year.

·      You have a gross margin of 50%.

Thus your Client lifetime value is $100. (100 x 2 x 0.5)

Now let’s look at client acquisition.

·      Let’s say your current lead generation methods convert at 10% through your advertising. (Which means every 100 people you advertise to; 10 people will buy)

·      For every 100 people that come to the store it costs you $500 in advertising.

·      Ten people buy out of the 100.

That means you spent $500 on advertising and ten people bought from you.

Thus your client acquisition is $50. (500) divided by (0.1 x 100) = (50)

So we have a CLV of $100 and our CA is $50. So for every $1 you put into lead generation you are getting $2 back after one year.

Conclusion

There are so many moving parts to business and I am not here to say it is easy, HOWEVER whenever we have the opportunity we MUST distill it into its simplest forms.

(NOTE: Uncover how the leading small businesses in the world Double Revenue & 10X Profit in six steps WITHOUT spending another dollar on advertising. There IS a Formula for Business growth that no one talks about and you’re about to discover it…for free! Access This FREE limited time training before it is taken down)

 

__________________________________________________________

Who is Louis Dharma?

Advisor, Investor and Best Selling Author. Louis Dharma has been the secret weapon working behind the scenes engineering business growth to Fortune 500 companies like Berkshire Hathaway and GE to start-ups and hundreds of small businesses around the world.

Today Louis uses his time to focus on his private investments as well as helping a select number of business owners expand and scale their business from 7 to 8 & 9 figures while being able to work less than they are now. His mission is to create $1-Billion worth of Business Growth by 2021.

To help as many businesses grow Louis has created a FREE limited time training called “How the leading small businesses in the world Double Revenue & 10X Profit in six steps WITHOUT spending another dollar on advertising”. Take your business to the next level by clicking on this link.