A simple formula for increasing your business revenue
Scroll down for the summary…
There’s a formula for increasing weight: eat more calories than you expend.
There’s also a formula for increasing revenue. It looks like this:
Clients X Transactions X Price = Revenue
Clients (or customers) are the people who buy from you!
- They give you money
- You provide products or services
Transactions are the number of purchases (on average) that each customer makes
- You might only make one sale per customer
- You could have a subscription where they buy every month
- You may sell different things to the same customer (each sale is a transaction)
Price is what you charge!
Revenue is the amount of money you bring in
- Gross revenue – before expenses (aka “top line” revenue)
Want to make more money? Increase one of those first 3 numbers.
You can increase your revenue in 3 ways:
1. Increase the number of clients you serve
- Get better at marketing (attracting the attention of strangers who need your services)
- Get better at sales (converting those strangers into clients)
2. Increase the average number of transactions each customer makes
- Offer additional services
- Keep in touch to remind them they can buy again
3. Increase your prices
- If you’re under-charging, may be as simple as raising your price
- Add value – create service packages – or describe your offers in a way that emphasizes the value they receive
- Target different clientele (can afford to pay more)
(Not sure what to charge? This might help: how much should I charge?)
You can increase more than one of those factors and get even better results!
Need some help with this? Check out these affordable courses: Plan for Success and Your Next Clients