At the end of our Business Improvement Summit in Liverpool last week, we asked people for their biggest takeaway from the day.
Now, I was hoping most people would focus on all the wise words and lessons we’d given, but one attendee said his single biggest takeaway was an equation on the screen.
To be fair, it was a cracking equation. And I have a maths degree, so that’s high praise indeed.
It was this:
(1.00)^365 = 1
(1.01)^365 = 37.78
In other words:
- if nothing changes, nothing changes
- if you improve by 1% every day for a year, the result is nearly 38 times better
Before any of my university lecturers hit “reply”, I know that nobody literally improves by exactly 1% every single day.
But that is not really the point.
The point is the power of small improvements, repeated consistently.
And I think that’s a really useful lesson for business owners, because many people think progress has to come from one big dramatic breakthrough.
Something like:
- a huge new contract
- a major price rise
- a shiny new system
- a game-changing hire
- a complete reinvention of the business
Sometimes those things help.
But, more often, real progress comes from smaller tweaks in the right places.
Things like:
- improving your conversion rate a little
- nudging your prices up slightly
- tightening your gross profit margin
- collecting cash a bit quicker
- improving one team process
- following up more consistently
- cutting one or two costs that add no value
And yes, subscriptions are often a good place to start. We’re all guilty of signing up for something with great intentions and then quietly paying for it forever. It is a bit like a gym membership, except at least with the gym there’s a vague chance you’ll suddenly get inspired in January.
Each one of those tweaks on its own might not feel life-changing.
But together, and repeated, they can make a massive difference.
Why this is such an encouraging idea
That’s one of the reasons I liked this idea so much.
It’s encouraging.
Because it means you don’t need to fix everything by next Tuesday.
You don’t need to become a completely different business overnight.
You just need to start improving the right things, steadily and consistently.
That is a much more manageable thought for most business owners.
Because if you run an owner-managed business, chances are your to-do list is already too long, your inbox is already too full, and you’ve probably already got three things on your mind while reading this.
The last thing you need is another person telling you to completely reinvent the business by the end of the month.
What you can do, though, is identify the next worthwhile improvement.
Then the next one.
Then the next one after that.
That is how momentum builds.
And momentum matters.
Because once you start seeing progress, however small, it changes the way you think. It gives you a bit more control, a bit more confidence, and usually a bit more energy too.
Most businesses improve through small gains, not giant leaps
I think one of the reasons business owners get stuck is that they overestimate the importance of the big move and underestimate the power of the small one.
They assume the answer is always something dramatic.
But in practice, the businesses that improve most are often doing things like:
- getting slightly better at winning enquiries
- getting slightly better at pricing
- getting slightly better at turning sales into profit
- getting slightly better at collecting cash
- getting slightly better at using the team’s time
- getting slightly better at focusing on the things that actually move the needle
None of that sounds glamorous.
But that is exactly the point.
Better businesses are not usually built by accident or by dramatic heroics.
They are built by lots of sensible improvements, made on purpose, over time.
This is exactly what we do in our Business Diagnostic Reviews
And that’s exactly what we see when we work with clients in our Business Diagnostic Reviews.
A big part of that process is looking at the seven key numbers in the business and understanding how small improvements in each one can add up to a much bigger overall result.
Usually, the answer is not some piece of magic.
It’s things like:
- a small improvement in pricing
- a small improvement in margins
- a small improvement in cash collection
- a small improvement in efficiency
- a small improvement in focus
Each one on its own might look modest.
But when you can see the numbers clearly, and model the effect of improving them, you realise just how powerful those small gains can be.
And when they stack up, the results can be huge.
That is what I liked about the equation on the screen.
It was simple, but it explained something very real.
Not just in theory, but in practice too.
Because most business improvement does not come from one giant miracle.
It comes from small gains in the right areas, repeated consistently.
So, what is your next meaningful 1%?
So here is my question for you this week:
What is the 1% improvement your business needs right now?
Not the giant fantasy plan.
Not the thing you might do one day.
Just the next meaningful 1%.
Maybe that is:
- reviewing your pricing
- tightening up your follow-up
- chasing cash a bit faster
- improving a process in the team
- cutting a subscription or cost that adds very little
- tracking one key number more consistently
It doesn’t have to be dramatic.
It just has to matter.
Because if you keep doing exactly what you’ve always done, you’ll tend to get what you’ve always got.
But small gains do not stay small for long.
Cheers
Jon
PS I did get my daughters excited with the title “The 1% Club” – one of those rare TV programmes in that magic Venn Diagram of Davies family likes!