The Business Success Formula…

We can measure plenty of numbers in Business…

 

From Sales, Gross Profit and Contribution, to Net Profit, Break Even and Cash Flow; but which one is the most important…?

Cash is arguably King – no business ever went under due to a lack of Sales or Profit, it is the ability to continue to service debt that essentially defines the longevity of a business. Provided that there is enough cash the business can keep going...

But what about some meaningful Operational Numbers…?

The hourly rates of our employees, productivity, efficiency and added value achieved per hour are all critical, but there is one that tends to be missing that is perhaps the most important of all.

What’s your Hourly Rate…?

Not the money you earn or charge to clients – but what is the Hourly Rate of added value that your Clients experience as a direct result of them working with you or buying from your company…?

For example…

We looked at the numbers of just one of our Kick Start Clients. In the first 6 months of 2013, the have generated £82,000 more income than they did in the same period of 2012.

During that time I have spent 1 hour a week with them on average – so that is around 25 Hours. So every Hour they invest with me this Client makes £3280.00 more money…

Another Client has improved Net Profits by €420,000 in the last 12 months, so that is around 50 Hours working with me; this client has made around €8000 more money for every Hour he invested with me…

If this is the case, how many hours do my clients want to invest with me..?

Lots – every time they invest an hour they benefit by 000’s…

How simple is it to sell a benefit of £3280 or €8000 per hour to someone rather than the “cost” of a Program..?

Very - if you were to make 000's every hour you invested with me, all the potential objections and excuses evaporate...

So I have two hourly rates – one is the rate that my Clients experience as a result of working with me, and the other is the effective cost per hour for my services.

My Business Success Formula looks like this – providing my Clients, for example, make at least £1000  every hour they work with me then they experience great Value – plus providing I charge less than the £1000 every hour - or whatever their individual results calculate, they are always ahead of the game and better of as a result.

My Business Success Formula looks like this;

Client Benefit / Hours Invested > £1000/hr.

or

Cb / Hi > £1000/hr.

Providing the Business Success Formula is achieved on a consistent basis, you will have happy and successful clients, you will have to start to Ration your services rather than Sell them, and your charges will be defined simply by how much value you deliver to your Clients – as it should be…

The Business Success Formula can be used in a variety for Business Sectors from Manufacturing to Recruitment, Consulting to Accounting and Legal Services - and the same benefits can be derived...

So the number one Operational Number, assuming Cash Flow is taken care of, may just be the Added Value per Hour achieved by your clients according to the Business Success Formula – but how many of us actually measure this, or have it as an operational objective for our teams..? 

The answer is; too few, and yet this one simple Operational Number could transform your business, sales, profits and ultimately your No 1 priority; Cash Flow.

How many have an agreement or objective with their Clients regarding what the Business Success Formula results will be, and then monitor them on a monthly or quarterly basis..?

How many of you are still competing on Price because you don't know the actual value you bring to your clients and get push back because the risk of working with you is perceived as too high...?

How many of you are thought of as a "cost" by your Clients, when you should be defined as an investment with a tangible return calculated accordingly...?

The answer here is; too many. 

The Business Success Formula is the simplest way to define your value proposition, differentiate you from your competition, and focus you and your team on continually improving the results your clients experience when they work with you.

Perhaps the Business Success Formula is King after all…

Have a great week... 

Our Next Live Events - come along and meet the Gang;

EU - Luxembourg - 21st June 2013 Click HERE to find out more...

UK - Birmingham - 12th July 2013 Click HERE to find out more...

You can always Email me at davidholland@resultsrulesok.com