Scaling Up Business with Bill Gallagher 006: Jeff Redmon - Increase Net Profit by Over 19% With This Simple Strategy
Jeff Redmon is a senior Gazelle coach and the founder of Redmon Law Chartered. He has over 25 years of experience and has served as a trusted advisor to fellow business owners. Jeff also runs the Inner Circle of the St. Croix Valley in the Twin Cities of Minneapolis and St. Paul. In today's show, Jeff and I discuss the power of Jeff's 1+1+1=19 formula and what a difference it can make in a company.
Jeff has created what he calls the 1+1+1=19 workshop. Obviously, Jeff's workshop does not follow the traditional math rules we've all learned in school, so how does the 1+1+1=19 formula work?
To break it down simply when you're looking at a straightforward profit/loss statement, you're often looking at four lines – sales, cost of the goods sold, overhead, and then the bottom line.
Based on the concept Jeff is using in his workshop, if you increase your top line by 1%, then you cut your cost of goods/services by 1% and cut your overhead by 1%; you can then increase your net income by 19%. That's how the 1+1+1=19 formula works.
What many people can see is that pursuing 1% changes in the company are actually worthwhile and can lead to huge profit gains. Jeff has taught this formula to over 100 business owners and they have all seen great benefits when they make just 1% adjustments to their company. He has seen between 7% to 80% improvement just by business owners working on his formula, so it's not always a flat 19%.
Keep in mind that by increasing the net income by 19%, you also increase the value of your company long-term. So the 1+1+1=19 formula is not just for short-term cash, but it can also be applied to a long-term company selling strategy.
In Jeff's workshop, he and other business owner attendees brain storm on how they can increase the top line revenue by 1%. Once they've finished the exercise, they then think for various solutions on how they can save money for their company. Jeff had one client who brought in 10 million dollars in annual revenue and through this exercise was able to save $400,000 from their bottom line.
Although these strategies may sound simple, they can often be overlooked as we plan big marketing and growth initiative strategies to increase business sales. We often forget to apply these simple methods like looking within the company to save money when we're constantly trying to think big and grow bigger.
Jeff believes that working on this formula with your leadership team is important, if not crucial. You will see better results in a group setting than if you were to sit down and try to find creative solutions by yourself.
Once you've completed these exercises and notice where you can make additional changes to save money, increase the top line and cut costs, do not suffer from analysis paralysis. Just pick 1-3 things that will make an impact and take action.
Interview Links:
More Resources: ScalingUpBusiness.com: Learn about how growth coaching can help you and and your business see big results. Scaling Up Business Growth Workshops: Take the first step to mastering the Rockefeller Habits by attending one of our workshops. Bill on YouTube: Short videos to keep you Scaling Up.
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Scaling Up is the best-selling book, by Verne Harnish and the team at Gazelles, on how the fastest growing companies succeed where so many others fail. My name is Bill Gallagher and I'm a certified Gazelles business coach.
We help leadership teams to get the 4 Decisions around People, Strategy, Execution, and Cash right so that they can Scale Up successfully and beat the odds of business growth success. Our 4 Decisions are all part of the Rockefeller Habits 2.0 (from the original best-selling business book, Mastering the Rockefeller Habits).