7 Levers

THE TRUTH NOBODY IS TALKING ABOUT
It’s been said – quite correctly I believe – that the nature of any business is to ‘go out of business.’ Left to its own devices against all the forces that aect it, any business will eventually end up with a stake through its heart.
Think about it:
1 You have prospects who price-shop (trying to commoditize your products and
services) in an eort to ‘pay less for more’
2 You have employees who want to squeeze you for the maximum wages while putting in the minimum amount of work
3 You have suppliers and partners who are more interested in pumping up their bottom line at your expense
4 You have customers who drain valuable resources drowning you in a tidal wave of
complaints over every small detail of your product or service

Most business owners instinctively feel that there are only two ways of confronting this challenge:

1 They start doing MORE to solve the problem
Working longer hours
Investing in courses to get better ‘on the tools’
Iterating and improving their product or service
Chasing the latest marketing trend; or worse still…
Just sticking their head in the sand and pretending that if
they ignore the overwhelm it’ll just go away
But sometimes it just doesn’t work.

2 They approach the right things the wrong way

THE ETERNAL QUESTIONS EVERY BUSINESS OWNER ASKS
Confronting this dilemma on a daily basis leaves business owners with the same three worries:
1 “How do I make more sales?”
2 “How do I get paid better for all the hard work I put in?”
3 “How the hell am I going to do it all without burning out from the stress, pressure and demands on me?”

MISTAKE: APPROACHING THE RIGHT THINGS THE WRONG WAY

The most important part of this, though, is you’re not going to add more things to your plate, because you’re already doing too much.
Instead, you’re going to take things away; focusing on only what’s necessary.
The 7 Levers of Business framework will give you the strategy to identify the key areas in your business, and then leverage small gains you can easily make to compound your success and return multiples on your bottom line.

SAMURAI VS JIUJITSU
Ancient jiu jitsu masters knew there was no point using brute force, or focusing on things that didn’t matter (punching, kicking, weaponcraft, etc.) to defeat their enemies.
Instead, success came quickly and easily to the peasants who focused on simple yet eective points of leverage.

These leverage points exist in and apply to EVERY business. Because every business operates on the same premise…
YOU ATTRACT POTENTIAL CUSTOMERS, SELL THEM SOMETHING, MAKE A
PROFIT… THEN GET THAT CUSTOMER TO BUY SOMETHING FROM YOU AGAIN

7 LEVER STEPS
Getting people to notice your business.
Getting those people to interact with your business.
Getting those people to buy from your business.
Getting them to buy the most expensive items possible.
Getting them to buy as many items as possible.
Getting them to come back and buy from you again.
Keeping the most amount of money in your pocket after paying all your expenses.

EXAMPLE 1: INFO BUSINESS
This would be the number of people you get to walk in and visit the shop.
This could be considered the number of people who take the time try something on.
This is pretty straightforward. It’s the number of people who buy an item.
This is the price of the item of clothing that the customer purchased.
How many items did they buy? Did they take the scarf you oered with the sweater they bought?
Will they come back and buy some more when your new spring line is available?
Here you’re looking at things like operating expenses and inventory costs.

EXAMPLE 2: PAINTING BUSINESS
This might be the number of people who see your ad in the weekly neighborhood mailer and call you.
This might be the number of people who take the next step and ask you in to do an estimate or quote.
This would be the number of painting jobs you lock-in and sell.
(Based on the number of quotes you do).
This is the average price you’ll charge for each job you do.
What other services might a customer buy? Do you oer decorative painting techniques like glazing or sponging?
Can you get any repeat work from this customer?
This would include any costs for tools, supplies, helpers, etc

7 LEVERS OF BUSINESS
SUSPECTS Every person who visits your website or walks into your store adds to your overall suspect list.
Basically, we’re talking about first-time visitors or enquirers (think: trac).
PROSPECTS These are the people who take action with you beyond merely looking. This is generally before
the buying stage. On a website, they might be people who register their email address through a lead
capture form; in a shop, this could be someone who tries on an item of clothing in a changing room, etc.
CONVERSIONS This is the percentage of your ‘prospects’ who take out their credit card and commit to
spending money.
AVERAGE ITEM PRICE The average price of the items you sell.
ITEMS PER SALE This is simply the average number of items purchased in each transaction.
TRANSACTIONS PER CUSTOMER This is, on average, how often customers make repeat purchases (buy from you again and again).
PROFIT MARGIN After you’ve subtracted the cost of making sales, what’s the overall profit margin of all sales as a percentage?

EXAMPLE: CLOTHING STORE

SUSPECTS 100,000 first-time customers walked through the doors of your store
during the last year
PROSPECTS 20,000 of them tried on a garment. This means your starting Prospect
rate is 20%
CONVERSIONS 4,000 of those who tried something on, went on to make a purchase.
This means your starting Conversion rate is 20%
AVERAGE ITEM PRICE The average price across all the items you sell (shirts, jackets, sweaters, ties) is $100
ITEMS PER SALE Some clients only buy one item, whilst others buy multiple items
(shirts, jacket and matching tie), resulting in the average Items Per Sale value of 1.1
TRANSACTIONS PER CUSTOMER Since these are all new customers, you don’t
currently receive any repeat business. So the Transactions per Customer is 1.0
…. A quick calculation at this point tell us you have 4,000 customers buying 1.1 Items per Sale at $100 Average Item Price resulting in $440,000 in gross revenue.
PROFIT MARGIN After expenses, your net profit is $66,000, making your overall Profit Margin 15%

CAN 10% TIMES SEVEN DOUBLE MY BUSINESS IN 7 WEEKS?

TRIATHLON AND ENTRREPRENEUR´S DILEMMA
Triathlon is dicult to perform at an extremely high level in three very different – and physically conflicting – disciplines.
Same for entrepreneurs: “If you’re the CEO of a company, or an entrepreneur starting a company, you cannot optimize for any one attribute. The minute you do that, you compromise your ability to perform at a high level in another area…
The job of running a complex organization or starting a business is all about … dierent things that have nothing in common. So being a good manager, and optimizing the performance of any aspect of your company, is often at odds.
That’s the triathlon problem. At a certain point I have to say, ‘I can’t optimize for being an amazing runner because I have to worry about swimming or cycling.'”

Create a team to handle each challenge.

In our rush to implement the ‘next big thing’, we forget to grab the
low-hanging fruit in front of us.

www.7Levers.com/Math
It’s time to work smarter, not harder.