How to Double Your Revenue in Three Years

Business is flat.  There are more competitors.  We are holding our own, but not moving forward.  The business doesn’t seem to be growing.  Sound familiar? Now What?

Many businesses try marketing promotions, new product lines, new store layouts, loyalty programs, new training programs etc etc.  The list quickly becomes overwhelming, and you never know which one will work. Sometimes you try them all.

So chunk it down.

Revenue is made up of only three key drivers: 1) Price, 2) the number of Customers, and 3) the number of transactions per Customer.  That’s it.

Revenue = Price X No. Customers X Transactions per Customer.

Here’s where the math gets interesting.  If you can increase each of these drivers by 8% each year, your revenue will double in three years.

Let’s look at an example:

Average Price = $40.00

Customers = 6,000 per year

Transactions per customer per year = 3

Multiplying out, the total revenue is $720,000 per year.

Now the magic.  If each of those three drivers is increased by 8% each year, then the total revenue in Year three is $1,439,286 – double Year 1.

Feel free to download a simple excel spreadsheet here, and input your own numbers.  The hardest part for many businesses is actually getting the numbers.  I am constantly shocked at how many businesses don’t know, and can’t find this key data.

The first step is find those critical three numbers, and determining a way to find them.  Unfortunately, this can be the most difficult step.

Now that you have chunked down the math, chunk down the management.

Give separate teams (or individuals) the responsibility for achieving 8% growth in each.  If you set someone the goal of doubling income every three years, it seems overwhelming and they (or the team) will probably fail.  Give someone (or a team) responsibility for increasing average spend 8% each year, and you have an achievable target.

In future posts, we will examine strategies for growing each driver, but awareness is the first and best tool to doubling your revenue.

See how Steven can help with a keynote speech on this topic for your next conference or staff meeting here.