The internet is full of articles making wild and wonderful claims about how to grow your profits. Most of them ask you to buy an expensive piece of technology or totally disrupt your business model.
This is not that article.
The 999 rule is a truly simple, smart strategy that any business owner can use to boost their bottom line. If your net margin (after paying yourself a market salary) is 16% or less, the 999 rule will most definitely double your profits. If your net margin is already greater than 16%, then the impact will still be very significant.
So how does it work?
If I challenged you to double your revenue or halve your costs, I suspect you would laugh in my face. However if I challenged you to make a 9% improvement, you may well consider that achievable.
The fact is that if you:
…then you will double your net margin. It really is as simple as that.
Sceptical? Good. Let me show you two scenarios. One firm is turning over £1m with a 10% net margin while a second is turning over £5m with a 16% net margin:
You will see that the first firm doesn’t even need to deliver a 9% improvement on each metric. In fact a 5% improvement against each criterion is sufficient to take its profits to £195k – almost double. The larger firm with the better net margin of 16% also sees profits more than double.
At this point, you probably fall into one of the following camps:
So – how can you implement the 999 rule?
Your ability to implement the 999 rule will be dependent on a number of things. Ask yourself:
Your answers should indicate areas in your business that might get in the way of the 999 rule. Once you’re aware of them, you can use a few top tips to help you on your journey:
Finally, here at the Nub we typically recommend that our clients launch the 999 rule in parallel with a sales initiative. The ensuing growth makes it easier to make the change.
So – are you ready to grow?
The Consultancy Growth Network is a peer community for founder-led consultancies turning over less than £/$10m seeking to build a profitable and sustainable consulting business.
Members get to benchmark their business, get client referrals, learn from experts and grow their firms with peer support.
Sample one of the Network’s events for free to find out more.