"3 Ways to Grow a Business" sometimes called the "50-30-20 Rule" in business growth strategies.

Here's the breakdown:

1. 50% from existing customers (current products/services)
2. 30% from new customers (acquired through marketing. referrals and sales efforts)
3. 20% from new products or services (sold to existing customers)

This model suggests that:

1. Half of your growth should come from retaining and increasing business with your current customers.
2. About a third should come from acquiring new customers.
3. The remaining fifth should come from introducing new products or services to your existing customer base.

This framework is used as a guideline for business growth strategies and revenue projections. It emphasizes the importance of customer retention and upselling, while also highlighting the need for customer acquisition and innovation.

We prefer a business growth strategy focusing on forecasting cash first.

Metronomics forecast cash first! Do you know what your widgets are?

Here's what it means:

1. Forecasting Cash First: The idea is to start by predicting your cash flow rather than focusing solely on revenue or sales growth. Cash is the lifeblood of any business, and ensuring you have enough liquidity to cover operational expenses, investments, and growth initiatives is critical. The forecasting process typically involves:
2. Backing in Your Widgets: Once you have a clear understanding of your cash needs and projections, you then work backward to determine how many "widgets" (products or services) you need to produce and sell to meet those financial goals. "Widgets" here represent the core unit of what you sell or deliver.

This approach emphasizes cash-driven decision-making over pure sales growth. It ensures that as your business scales, you maintain positive cash flow and avoid overextending resources. By starting with the cash requirement and then aligning production, sales, and operations to meet that target.

By focusing on cash first, businesses can make more informed decisions about scaling operations, investing in new opportunities, and managing risk.

Curious: Has this quick post change your way of thinking on forecasting sales? Please post your comments.

Revenue is Vanity

Profit is Sanity

Cash is King/Queen