I’ve always hated learning math and thanks to the computer science part of my degree I am now able to solve an nth degree differential equation with constant coefficients. For someone whose greatest engineering ambitions are assembling a chair from Office Depot, this is not particularly useful. But while university level math isn’t required for most of us, grade 4 taught two of the most powerful business/life concepts you could ever apply:

Addition and Multiplication

I’ll spare everyone the grisly details of how these intensive computations are actually performed because most operating systems do come with a calculator. Instead I’ll throw out a few scenarios to mull over. All of these are almost insultingly simple concepts, yet most businesses aren’t applying them nearly enough (or at all) and I doubt there is any single person or company in the world that can’t apply them more.

Math Application #1: How to Get Just About Anything Done

Sometimes a project just isn’t a priority and it’s hard to devote time to it. This is especially true for tasks that aren’t much fun or which don’t matter immediately (and have no set deadline) but are important in the long term. Good examples are financial planning, submitting information about your new product to directories, or building your business in general. Doing even 1 small thing a day will add up even if it takes a year, where as if you do 0 things each day for a year you will be at the same place you were one year ago.

I’m applying this principle to this very blog, and through it I am slowly building a “proper blog” with all the bells and whistles. Traffic has also increased 3000% since my first visitor.

Stuck on doing something? Find just one thing each day to make it go forward.

Math Application #2: How to Become a Millionaire Saving Just $4000 a Year

I’ve mentioned this before and I will keep mentioning it until I’m blue in the face. Save 10% of your income even if you aren’t rich, pay yourself first, and you are on your way to virtually guaranteed wealth. The Wealthy Barber is an entire book whose heart lies in this simple rule. The power of multiplication is applied through compound interest at a modest 10% annual return to achieve at minimum a healthy even if your income is modest at best.

Math Application #3: How to Increase Your Sales Ten-Fold Beginning Today

Fractions and percentages are a strange creature and tend to not instinctively be considered in our thought process. They are however absolutely crucial to understanding how to get rewarded for your efforts - optimization! There are many ways to attract customers to your product, and at every step of the expensive sales cycle you should be trying to convert as many people as possible. A little number play can prove amazing here.

Let’s say that you are paying $500 a month to run a modest advertising campaign. At the moment your advertisement is converting 2% of the people that view it into visitors (and some into eventual buyers). What if an ad with improved wording can bring in 4%? That’s double the sales for your $500 investment, and all it takes is willingness to experiment and track results. Do this for your advertising, for your product information, for your ordering process, and everything else in the sales cycle. Small tweaks can bring big percentage increments and suddenly increasing your sales 10 times over is just a matter of process.

Math Application #4: Increase Your Profits Without Increasing Sales

Your profit on each sale is the selling price minus your costs. Any person running a business knows this, at least in the textbook way. Knowing and living are very different though. If this equation holds, then how much more profits will gain by increasing your revenue per sale? Are you selling at your optimal price? Are you doing all you can to upsell? Remember that all revenue increases on each item are mostly profit, and if you currently have a low margin they could literally change the health of your business. The same goes for your costs. Are your unit costs too high? How can you optimize your process to increase your margin by 10%? 50%?

Let’s say you are currently selling a widget for $50, of which $30 is your cost (including materials, assembly, marketing, delivery, etc). That’s a $20 profit per sale. Now what if through a simple optimization you decrease your costs by $5? That’s a 25% increase in profits!

Find the Math in Your World and Grow Exponentially

These are all powerful ways of getting ahead and accomplishing your goals through exponential increments. However as powerful as these (and many more) applications of grade 4 math are, when you apply them together the results are even more startling. Feel free to post comments on other hidden multiplication or ways simple math has changed your life.

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This entry was posted on Friday, April 14th, 2006 at 4:48 pm and is filed under Productivity, Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.