Creating Synergy -
  Using the Four Ways to Grow Your Business
 

Many of you may be thinking to yourselves, "What is synergy?"

One common definition is several parts working together to produce results greater than their own independent efforts. That being said, you may still be wondering, "What does this mean and how does it apply to growing my business."

The whole concept of growing a business and while creating synergy simply means that nothing exists in a vacuum! It means that it is in fact possible to make the total equal more than the sum of its parts! A nice-sounding theory, but really, how does this work? 

Let's begin with a review of the four ways to grow a business, then test the validity of the theory using simple arithmetic:

1. Win more customers (of the type you want)
    
2. Get your customers to come back again and again
    
3. Get them to spend more each time they do
    
4. Improve the processes within your business

To exemplify how synergy comes into play in business, let's look at an example: Company X has a base of 1,000 customers, each of whom purchases once yearly and spends $100, totaling $100,000 in sales. 

So, if you successfully apply the four methods to grow your business and increase each of these factors (customer base, number of transactions, transaction value) by 10%, and assuming everything else is equal, it's logical to assume that the overall business will grow by 10% to $110,000. Right? 

Wrong! If you add 10% to each variable and recalculate the equation, you come up with:

1,100 x 1.1 x $110 = $133,110

That's a staggering 33.3% increase simply by improving EACH area simultaneously, and taking advantage of the multiplier effect created by the synergy of all three areas working together. 

Try this calculation with your own business. The potential for increase should surprise, impress and, most importantly, motivate you. Look at your business and discern which of the four ways to grow your business you are focused on right now. Is it just one, two, three or all four? Are you using synergy to achieve maximum results for your business? 

And remember, the purpose of CMC's monthly BGR meetings (the fourth Thursday of every month) is to allow business owners and managers to discuss issues as they relate to the four ways to grow a business. 
 

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