If you do a Google search on the phrase ‘increase business profits’, it is not surprising to find a lot of results. Increasing profits is what every business wants and needs to do. A similar search on the phrase ‘multiply profits’, however, brings up very few results. No one appears to be looking to multiply their profits, even though there are many examples worldwide of businesses that have achieved such a multiplication in their results. Both Ikea and luxury goods maker Mulberry recently tripled their profits, Qatar Airways and BP New Zealand quadrupled theirs, and in 2015 the Chinese car manufacturer BYD quintupled theirs.
These companies are all large organizations and their profit increases were in part through taking advantage of outside circumstances, such as lower fuel prices in the case of Qatar Airways. Nonetheless the benefits that can come from a shift in focus from the concept of ‘increasing profits’ to the concept of ‘multiplying profits’ are available to the leaders of every business, however large or small.
The majority of businesses focus on generating incremental growth, adding a percentage on to their current revenues and profits each year. What if you, as a business owner, were suddenly asked to shift your focus away from incremental growth and on to multiplying the profits of your company by a factor of 2, 3, 5, 10 times? It’s an interesting exercise that can bring various benefits.
The first benefit is that the question asks you to examine the status quo in your business. It can be too easy to get bogged down in the day-to-day detail and not to take the opportunity to regularly re-examine your business model. It can be easy to accept that incremental growth is the ‘only game in town’ for you.
The second benefits it that the question will bring up your imagined limitations and allow you to confront those. It’ll unearth all of your unquestioned assumptions about a bigger business being too much difficult, hectic, impossible . . . whatever assumptions the thought of exponential growth brings up for you.
The third and the most important benefit is that switching from incremental growth to multiplied growth will need a completely different plan than the one you’ve currently got. The strategy to make a $50,000 profit will be totally different than the one that will make you a $500,000 profit. The strategy that will make you a $100,000 profit won’t make you a million dollars.
The exercise of focusing on what would your business model be like if it was generating ten times its current profits opens up your mind to explore new possibilities.
These new possibilities are exactly what can bring forth the actual transformation of your business into a much more profitable one, if that is what you desire.
Try the exercises and see what you come up with, you have nothing to lose . . . only zeroes to add to your bottom line.