Inzvestor Management Calculations

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Calculate your profit

Understanding the variables that affect your Turnover and Profit may be the most important aspect of your business.

The simple equation below charts the Customers/Turnover and Profit for your business.

Leads x Conversion Rate (%) = Customers
Customers x Average Sale x Number of Sales = Turnover
Turnover x Margin = Profit

Customers Leads:

How many referrals or site visitors do you have per month?
(Multiply x 12 for a yearly figure)

Conversion Rate: (as %)

What percentage of these will purchase a product? (eg 20%)

Customers: 0

note: This figure is derived from the figures entered above

Turnover Average Sale:

Enter the value (in £ or $) of your average sale? This figure can be obtained from your invoices/receipts

Number of Sales:

How frequently does your customer purchase from you? This figure can be obtained from your invoices/receipts

Turnover: £0

note: This figure is derived from the figures entered above

Profit Margin: (as %)

What percentage of the sale do you retain after your suppliers have been paid? (eg 20%)

Profit:£0

To reinvest or share as dividend!

Converting Leads

Nurturing a warm lead is a more cost-effective prospect than sourcing a new lead.

Take a moment to examine your costs of gaining a client. Costs include:

Advertising
Stationery/Postage
Utilities/Office Costs
Commissions/Staffing

Focussing on nurturing warm leads and existing clients improves repeat business (increasing number of sales per client), directly affecting your profit.

Try tweaking the number of sales per client in the Turnover box and see how this changes your turnover and margin figures.

Increasing Transaction Value

Higher Transaction Values (per average sale) can be achieved in various ways, from offering samples of complementary products with initial orders, to providing outrageously good customer service.

Improving Margin

Margin can be improved through savvy negotiation with suppliers. As your business grows, negotiation will become easier.

For more information on manipulating your bottom-line contact us for a free evaluation of your opportunities.