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Home > Business > Special


How to multiply your profits

Shyamal Majumdar | October 21, 2005

Let's assume you are a small-business owner looking for that edge or the fine-tuning that can make the difference in your business, but don't have the financial muscle to hire big management consultants.

Help is at hand from Action International, the world's largest business coaching company with revenues of over $1 billion and operations in 17 countries. The company is all set to debut in India and is in the final stages of clinching an alliance with the Reliance-controlled NIS Sparta.

"Estimates show one in three new businesses fail in their first year of operation, two out of four by the end of the second year, and three out of four by the fifth. Action's business motto is providing advice to these businesses at a low cost. And small companies -- 4,100 of them across the globe -- have found our expertise immensely useful," says Rahul Kapuria, consultant for Action in India.

The company, which started in Australia in 1993, works in a franchisee model and has more than 550 franchisees in countries all over the world.

So what's the Action model for business success? The core issue, according to Kapuria, is to ensure that a business-owner builds a profitable commercial enterprise that works without them.

The company believes systems should run a business, not the owner, and there are truly only five ways to transform your business into a profit powerhouse. By simply breaking down your sales and marketing efforts into these five areas and understanding how each affects the other, you're halfway there and, most definitely, way ahead of 90 per cent of businesses out there.

Action Business Coaches have at least 344 different ways, (about 50 to 60 for each of the five areas) to help you multiply your profits. The first thing Action does is to access the business by working with the business owners to determine where they are, where they would like to be, and then helping them implement systems and strategies based on what they find that would be the most appropriate for that particular business's needs (increase profitability, systems, employee training, controls and so on).

Action will assess the business in the five key profit generating areas: lead generation, conversion rate, average dollar sale, average number of transactions, and profit margins. Those areas are highlighted in the following equations:

Lead Generation x Conversion Rate = # Customers

#Customers x Average Sale x Avg. # Transactions = Revenues

Revenues x Profit Margins = Profits

So basically, Action is looking at the equation for profitability for any business, in any market, in any industry sector. Throughout all of these sectors of business, the equation for profitability stays the same.

Once it is established where the business is, Action is able to go back and look through its systems and determine which of those would be the most appropriate to implement in increasing the profitability of that particular business type.

Action uses the information gathered on the business to put together a detailed alignment report that will serve as the roadmap to success for the next 12 months of Business Coaching. Once it is established that the business can be profitable, the company moves on to the secondary goal, which takes place during the Coaching process.

That goal is to teach the business owner the difference between working on their business and working in their business. Small business owners can spend 60 hours or more every week just trying to keep their business alive.

Most often, what Action finds, is that they are working on the wrong aspects and end up spinning in a relentless circle until the business finally folds in on top of them.

The company's goal is to help them in working on growing their business instead of concentrating on the technical issues, which are usually counterproductive to growth.

Throughout the process of coaching, Action will spend about an hour each week with the business owner (depending on their needs) helping them stay focused on their goals, testing and measuring results, assisting them with potential obstacles for growth, systems implementation and so on. The company holds its clients accountable for reaching the goals that is set together, and work diligently to help them achieve results.

Kapuria says owners of small- to medium-sized businesses find it hard enough keeping pace with all the changes and innovations going on in today's modern world to find the time to devote to sales, marketing, systems, planning and team management and then to run their business after that.

That is where the Business Coaching comes in. Unlike a lot of other franchisee training programmes, Action's initial 10-day training programme at Las Vegas for the business coaches is only the beginning of his journey into a continual learning curve.


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Number of User Comments: 1




Sub: How to multiply your profits.

Dear sir, The decision of Action to come to India is a welcome measure and will help several small and medium busineses in professionalising their ...


Posted by K.Desikan




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