Boost Your Business's Bottom Line with the 6-1-5 Rule

The 6-1-5 Rule: A Recipe for Profitability

In the world of business, profitability is the ultimate goal. Every decision made, every strategy implemented, is aimed at increasing the bottom line. But did you know that small changes in key areas can lead to substantial increases in profit? Enter the 6-1-5 rule.

What is the 6-1-5 Rule?

The 6-1-5 rule is a simple concept with profound implications. It states that:

• A 6% increase in turnover
• Combined with a 1% decrease in the cost of goods
• And a 5% decrease in expenses

Will result in an astonishing 24% increase in profit.

6% Increase in Turnover: Increasing your sales turnover by just 6% can have a significant impact on your bottom line. This can be achieved through various means such as expanding your customer base, increasing sales to existing customers, or introducing new products or services.

1% Decrease in Cost of Goods: Lowering the cost of goods sold by a mere 1% can lead to substantial savings. This can be accomplished through negotiation with suppliers, optimizing production processes, or finding more cost-effective sourcing alternatives.

5% Decrease in Expenses: Trimming expenses by 5% may require some careful scrutiny of your business operations. Look for areas where you can reduce waste, improve efficiency, or renegotiate contracts with vendors.

When you implement the 6-1-5 rule, the cumulative effect on your business's profitability is remarkable. By simultaneously increasing turnover and decreasing costs and expenses, you create a powerful multiplier effect that boosts your bottom line by 24%.