Here is a Mathematical Formula For Making Money online from Internet, i.e. a formula thru internet marketing to earn money online:
1. Leads Per Annum x Conversion Rate = Customers
2. Customers x Average Dollar Sale x Sales Per Customer = Gross Profits
3. Gross Profits x Profit Margin = Net Profits
The real power of this formula is stored within the five variables (a.k.a. levers): 1. Leads Per Annum, 2. Conversion Rate, 3. Average Dollar Sale, 4. Sales Per Customer, and 5. Profit Margin. Quite literally, when you apply these levers to your online money make business your profits will increase exponentially.
Here is an example, assume for the moment that your business currently operates under these circumstances:
Leads Per Annum = 10,000
Conversion Rate = 0.1 (10%)
Av. Dollar Sale = $50
Sales / Customer = 2 per annum
Profit Margin = 0.2 (20%)
Plugging these into the formula gives you a net profit of $20,000 per annum.
Let's now demonstrate the impact of improving progressively more levers without increasing your overall effort:
Case #1: Improve leads by 100%
Net profit = $40,000
Profit to Effort ratio = 1:1
I.e. for every % increase in effort you get the same % increase in profit.
Case #2: Improve leads and conversion rate by 50% each.
Net profit = $45,000
Profit to Effort ratio = 1.25:1
I.e. for every % increase in effort you get a 1.25% increase in profit.
Observation: By simply increasing the number of levers you improve you magnify your leverage. In other words, for the same amount of effort, the more levers you improve the more your profits improve.
In this example we see that by spreading your effort over all five levers you increased your net profits by $29,766. Compared to the $20,000 increase gained from improving only one variable we see that your profit growth is almost 50% greater for doing nothing more than spreading your resources over all five levers. Imagine all the extra money you could be generating right now without any extra effort. All it takes is a simple change in focus.
Conclusion: To leverage your efforts for maximum returns you must focus on improving all five levers in your online money make business. This has to be one of the most magnificent realizations and secret you could ever make in online money make business. Furthermore, to be more effective and efficient to earn money online, never stop improving all five levers of your online money make business.
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