When 1 + 1 +1 = 19…

As I’m writing this, I’m on a plane returning from the 2010 Fortune Growth Summit, where I was exposed to some amazing speakers and content on growing and making your business better.

Some of the speakers included David Sokol (who Warren Buffet calls his Mr. Fix it, more to come on him soon), Chip Heath with his bestselling book Switch, Liz Wiseman with her new leadership book Multipliers (very impressive!), Robert Bloom who is a marketing legend and David Meerman Scott who shared his new book Real Time Marketing & PR. The conference ended with Tom Adams, CEO of Rosetta Stone. 

Even with all this Star power, the person that I want to tell you about, the person that gave me the biggest takeaway from this event, is Rich Russakoff and his talk on getting more cash to flow to the bottom line. Rich is an international expert on cash flow management and bank financing. 
What I learned is that 1+1+1, can in fact equal 19. How’s that? This was the magic that we entrepreneurs need to see in a spreadsheet to show us the power. What Rich showed us was how you can make small 1% changes to your income statement, and how those small changes result in a 19% increase in profit. 
A 1% increase in price, a 1% decrease in cost of goods sold and a 1% decrease in your administrative expenses, you can INCREASE Net Profits by a whopping 19%! Check out this power point to see an example.
The increase in revenue comes from a small price increase not going out and making new sales. This is in your control. The other 2 areas are also in your control by looking deeply at your cost structure, and processes to determine where the 1 percent can come from. 
This differs depending on how your margins are structured, but none the less this shows the power of how small changes have a big impact on increasing your NET PROFITS!!
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