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```									Exponential Business Growth
How to recognize what activities to increase to realize your expected
When you are running an online business or even a traditional brick-and-
mortar business, a complete understanding of which activities will have
the most impact on business growth is critical.
The concept of exponential business growth is simply to understand each
activity and its resultant impact on your bottom line profits.
Here are two definitions supplied by Wikipedia:
A linear equation is an algebraic equation in which each term is either a
constant or the product of a constant and (the first power of) a single
variable. Linear equations can have one, two, three or more variables.
Exponential growth occurs when the growth rate of a mathematical function
is proportional to the function's current value. In the case of a
discrete domain of definition with equal intervals it is also called
geometric growth.
For most of us these definitions are a little hard to swallow. Here are
two simplified versions:
Linear Impact: A linear impact simply stated means that for each given
effort you apply you get one given result.
Exponential Impact: An exponential impact implies that for each and every
effort applied, you get many more results.
For the sake of simplicity, I will use the simplified definitions for the
1. Number of leads per month = 200
2. Lead conversion ratio = 15%
3. Sales per month = 30
4. Average value per sale = \$50.00
5. Average number of sales per month = 2
6. Monthly sales = \$3,000.00
7. Annual Sales = \$36,000.00
Which of the above statics are variables and which are fixed? The answer
is all of the above. Items 1, 2, 4 & 5 are completely variable and items
3, 6 & 7 are calculations resulting from the values of the previous
items.
To apply a simple linear impact equation to these statistics we simply
need to select any one of the first five items and increase it to any
number.
So, if we increase the number of leads per month by 10% (item #1) the
bottom line results will be \$39,600.00 or an increase of 10% (\$3,600.00).
Conversely, if we apply the same 10% increase to the average number of
sales per month (item #5) the bottom line result will be the exact same
10%. This is a total linear equation effect and has a pre-defined impact
on total bottom line results.
What would happen if we increase two variables at the same time? Would
the results be linear or exponential? Let's see an example.
Let's increase the number of leads per month by 10% (item #1) and the
lead conversion ratio by 10% (item #2). The bottom line results will be
\$43,560.00 or an increase of 21%. This is the power of exponential growth
and has a substantially greater impact on bottom line results.
Now let's take a look at the results of an example that increases three
variables has.
Here we will increase the number of leads per month by 10% (item #1) and
the lead conversion ratio by 10% (item #2) and the average value per sale
by 10% (item #4). The bottom line results will be \$47,916.00 or an
increase of 33%. This is the true power of exponential growth and has the
greatest impact on bottom line results.
The best and quickest way to grow your business is by implementing these