HOW TO MULTIPLY YOUR FINANCIAL SUCCESS ONE STEP AT A TIME
When it comes to business and financial success - I don’t believe in magic. I believe business and financial success are the result of good old-fashioned hard graft combined with a dash of inspiration, a sprinkling of good fortune and consistent action.
Whilst I don’t believe there’s a magic pill, I do however have firm firth in the magic penny, a story I often tell when I’m teaching. Before you think I’ve started to go woo woo on you, let’s dig straight in to my story about the magic penny.
First I’ve got a question for you. If asked to choose between £3 million in cash right now, or a magic penny that doubles in value every day for 31 days, which would you choose?If you’ve heard this story before, you’ll know the magic penny is the choice you should make. In the long term choosing the magic penny leads to substantially greater wealth. But why is it so hard to believe that the magic penny will lead to more money in the end? Because it takes so much longer to see the results.
Imagine that you take the £3 million, whilst your best friend takes the magic penny. By Day 5 your friend has 16p. By Day 10, s/he has £5.12 while you have £3 million! By Day 20 and with just 11 days to go, the magic penny has multiplied to £5,243. Imagine how your friend is feeling at this point. Probably not great!
By Day 29 the invisible magic of the ‘compound effect’ kicks in to play. Your friend’s got £2.7 million. On Day 30, your friend finally pulls ahead, and the magic penny is worth £5.3 million and on Day 31, its value is £10,737,418.24. Phew!
Obviously none of us have a magic penny. But we can take the ‘compound effect’ and apply it to our business to achieve financial success.
In my previous article, I talked about the financial KPIs it’s essential to track. I bet that got you really excited?!
One of my financial KPIs was Revenue Growth Rate, a fancy way of talking about the role the ‘compound effect’ plays in hitting your financial targets. (Revenue growth refers to the rate at which your company’s income, or sales growth, is increasing. To calculate your revenue growth rate, start with your business’ total revenue for the current year. Then divide your current revenue by your total revenue from the previous year to find the rate of revenue growth).
Now before your eyes start to glaze over, let’s apply this to real life business results! In my article ‘Are You Ready To Get Off The Financial Roller Coaster?’ I shared the results of two of my clients, Isabel and Mike, both of whom doubled their turnover in their first 12 months of working with me.
We did this by setting a Revenue Growth Rate for each business that took account of:
- Their results in preceding years;
- The resources they had to invest in their business growth strategy, including their sales and marketing plans.
We looked at what would happen if they grew their business steadily and consistently every single month. By say 3%, 5% and 6%. And then we worked out which activities would deliver these results, taking into account any seasonal variations.
Let’s say your turnover is £10,000 per month right now. If you could increase your income by just 3% every single month, this would increase to £10,300 in the second month and £13,842 in the twelfth month. If however you could grow your business by 5% every single month, you’d turn over £10,500 in the second month. But here’s where it gets interesting. In the twelfth month, you’d earn £17,103. A big jump up from £13,842. Imagine the difference a 3% improvement in your financial results would make. And then imagine if that improvement were 5% per month…
It’s the ‘compound effect’ of the magic penny that brings the type of financial success Isabel and Mike have been achieving.
These results are achieved by linking your business growth plan, including your sales and marketing strategy, to your financial targets. It’s implementing a sound business growth plan, that’s right for you and your business, that will drive these kinds of financial results.
If you’d like to find out how I can help you to get similar results to Isabel and Mike, simply book a Skype coffee chat using this link. There’s no hard sell. Just solid advice and a straightforward, honest assessment of whether 1:1 business coaching (or business consultancy) would be a good fit for your business, the results you can expect and how to get started.
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Question: Have you applied the ‘compound effect’ to your business results? What was the impact on your business?
Explore These Additional Resources
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- Are You Ready To Get Off The Financial Roller Coaster?
- 6 Financial KPIs To Watch Like A Hawk
- Sky Rocket Your Business With The Marketing Rule Of 7
Work With Me
I’m Denyse Whillier, a London based business coach and consultant. I guide entrepreneurs from across the globe to achieve profitable, scaleable growth and create businesses that are Built To Succeed™. Built To Succeed™ is my proven success system, developed during my 8 years in the trenches as a CEO, 25 years’ experience at senior leadership and managerial level and training at Cranfield School of Management, the UK's leading business school. It's this background that sets me apart and helps my clients to get BIG results.
I’d love to start a conversation. Simply use this link to arrange an informal Skype coffee chat. There’s no hard sell. Just solid advice and a straightforward, honest assessment of whether 1:1 business coaching (or business consultancy) would be a good fit for your business, the results you can expect and how to get started.
To get a copy of my e-book, 'How To Take Control Of Your Business ... And Get Off The Financial Roller Coaster,' click HERE.