3 THINGS YOU MUST DO BEFORE APPLYING FOR BUSINESS FINANCE Funding and Business Growth Playbook T: 0330 350 3356 @: hello@GrowingYourNumbers.com www: growingyournumbers.com
New Customer Acquisition This Year vs Last Year
Remember, Alex ’s Software Company sold just over £1 .0m in each of the last 2 years. If the business had acquired the same number of customers, this year as they did last year total sales could have been £1.1m. At a 35% Gross Margin, Alex could have enjoyed an additional £37.8K of profit.
Depending on the EBITDA multiplier applied for Alex’s business , an additional £37.8K of profit would have also added approximately £130,000 to the value of the business (using a 3.5 EBITDA multiplier).
How did your business do, did you increase New Customer Acquisition year on year and what was the impact on your company’s profitability? What impact did any movement have on the value of your business?
Don’t forget, New Customer Acquisition is only one part of the picture . To fully understand net customer growth (or contraction), we also need to understand how many customers we are retaining, (or losing). Shall we have a look at how Alex ’s Software Company is doing with Retention.
Customer Retention
Alex knows how many customers they have retained, (and how many have been lost), because this is also part of the Management Information they review each month? Do you know how many customers your business retained last year? How does this compare with the year before?
Let’s have a look at the Management Report for Alex ’s Software Company and see how they are doing. Remember, the business acquired 79 New Customers last year. Was that enough to replace the customers lost?
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