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4 Ways to Wealth Formulas to Drive Your Revenue

 

There are formulas that you need to use in your business in order to improve and drive profitability for your company. These are called the Way to Wealth Formulas and they will help you to see more success and higher revenue when they are put into play.

1. Customer Formula

The first is the Customer Formula. It is important to understand that you cannot drive sales. Sales are an outcome of effort. What you can do is increase the number of quality leads which will then lead to an improved conversion rate. A better conversion rate and the number of leads mean more customers.

(Number of Marketing Leads) x (Effective Success Rate) = Your Customers 

2. Revenue Formula

The next formula that you need is the Revenue Formula. This formula helps you to increase your revenue once you start seeing an increase in the number of customers for your business. A higher average sale number can result from increased prices or a higher number of items sold in a single transaction. Combining that number with the number of times a customer makes a purchase leads to your revenue.

(Your Customers) x (Average Sales) x (Frequency of Sales) = Your Revenue 

3. Gross Profit Formula

When determining gross profit from sales, you will need this formula to know where you are currently so that you can make changes where needed. You deduct the total cost of the goods sold, or COGS. The COGS are all expenses that are necessary for the sale of an item: materials, labor, etc. By reducing the amount of COGS and increasing revenue, you see a higher gross profit.

(Your Revenue) – (Cost of Goods Sold) = Gross Profit 

4. Net Profit Formula

Your net profit is your actual profit once you have deducted all of the operational costs from your revenue. Knowing what your total operating costs are for creating and selling your products can show you where changes might be made in order to increase your net profit.

(Your Revenue) x (Fixed Operating Costs) = Net Profit

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