The Power of 1%

“The journey of a thousand miles starts with a single step.” 

- Chinese proverb

“One small win each day, 365 small wins each year – that’s a big win!” 

- Arend Welmers – CEO, Ninety-Days


Most people set big, ambitious goals for success and then they often neglect to pay attention to the main difference between success and failure: consistent, meaningful action! When you set big goals they often appear intimidating and difficult to achieve, which significantly reduces the chances of them being delivered at all.

But what if, say, you could add a value equal to 1% improvement in a particular area of you business each day. By adding one percent each day (pure addition, no compound interest) your year-end result will equate to 365 percent, or an improvement of 3.5 times the result you’re currently producing in that area.

Now consider some of the key elements of your business: the revenues; the profit; and cash you generate. What would those numbers look like if they could be improved by 1% a day!

So how can the power of a one percent change make marked improvements in the vitality of a business? When it comes to your business’s bottom line, when you first look at it a one percent change may not seem initially to be capable of generate a significant or interesting result. But let’s break it down with some simple maths.

Let’s say you sell 1,000 units at £1,000 per unit and generate revenues of £1,000,000 per month. Factoring in the cost of those sales, let’s say £400 per unit - we’re left with a gross profit of £600,000. What if each of these variables improved one percent?

If sales volume (units sold per month) and the price per unit each was to be increased by one percent the total monthly revenue rises to £1,020,100. And if you were able to simultaneously decrease the unit cost of sales by one percent (just £4 per unit), this would result in a gross profit of £624,100 for the month. Calculate the impact of this over the course of a year, and those one percent improvements equate to a £289,200 (4%) boost in annual gross profits.

And what if the Power of 1% was applied to other variables in the profitability equation - overheads such as fixed labour, travel expenses or marketing? How much could you improve the net profitability of your business? In our example above, assuming the company normally produces an annual Net Profit of 10% (£1,200,000), if total overheads were also cut by just one percent the result would produce an increase of 29.1% in annual net profit – from £1,200,000 to £1,549,200 – a substantial increase!

As you begin to make plans for 2020/21, I’d like to challenge you to consider making as many of these changes as possible. Consider all, or a combination of:

·      Raising prices by 1%

·      Increasing volumes / units by 1%

·      Decreasing cost of sales/goods sold by 1%

·      Reducing overheads by 1%

Then calculate what would the cumulative effect be on your business?



As you already know from the example above, you have two ways to make improvements in revenue - either raising prices or increasing volume. The greatest impact to your net profit/cash flow comes from improvements in revenue and to a slight lesser degree cost of sales and operating expenses.

However, you can also impact the cash position of the business through the balance sheet by collecting your Accounts Receivables one day faster. In a similar way, you can impact cash by paying one day slower, and holding slightly lower levels of stock (if that’s applicable to your business). The cumulative difference can be significant! While I’m not recommending you pay outside of the terms to your vendors. There’s certainly no benefit to paying early unless your supplier offers a discount. Certainly if your business is experiencing cash flow problems it’s always worthwhile trying to negotiate more favourable payment terms where possible.

So also consider:

·      Collecting your receivables 1 days faster

·      Paying your accounts 1 days slower - where this can be negotiated with your suppliers

·      Reducing your stock days by 1 days – if applicable

From my experience, the difficult part in all of this isn’t likely to be the 1%. It is more likely to be the impatience and lack of immediate (big) results that make otherwise smart and capable businesspeople give up on their goals. If you’re looking for a quick fix, you might as well stop setting big goals. But if you want to achieve something great, add one penny a day, one tweet a day, one new call a day to your list of prospects – and see over time the extraordinary impact that will have on your business. Just imagine if everyone in your team was able to improve his or her contribution just by 1% per day, what a difference that would make!

Simply put: Consistently repeated small daily actions = incredible accumulated annual results! Get better (a lot better) one step at a time!

Would you like to learn more? Get in touch via the contact form on our website ( or by emailing to discuss what it is you feel you need and to see if our experience can help.