Feb 25, 2009
The 90% Rule
It’s a philosophy for business development that relies on evolution, not revolution. It shuns disproportionate borrowing or investing for measured, manageable and sustainable growth.
Driving the 90% rule is the use of operating leverage as a marketing tool™.
Operating leverage is, essentially, the reliance on or commitment to fixed assets. Financial leverage is the reliance on borrowing, or debt, to increase production volume.
What differentiates pure operating leverage from the idea behind using operating leverage as a marketing tool? The latter focuses on how to get more out of what you already have (or almost have). It’s a five step approach that will change the way that you view your business … and help to identify, rank and map potential markets, services and products that you are already 90% capable of providing.
Think of the math. If the core 90% of your business grows at 5% a year, then that generates 4.5% annual growth. Now, add a new product, store, vertical or service that further expands your sales base by 10% and you achieve annual growth of 14.5%. At this rate, your business doubles in size in +/- five years and remains manageable in terms of financing, staffing and operating.
What business are you really in?
Re-think. Re-understand. Grow.
You are already 90% of the way there.
– Ken Tencer
Category: Innovation
