Marginal Gains, Profit, Business

Marginal gains theory describes the idea that by making a number of small changes to the way you run your business or organisation, you can have a large impact on its overall efficiency which in time will result in a big boost to the bottom line.

The philosophy is that by making incremental improvements to a handful of key areas in your business – for example, sales & marketing, human resources or client retention, that when realised will have the same level of impact than if you’d spent the same amount of time just focusing on one area.

On the face of it, this does sound distinctly underwhelming, until you realise that it is a lot easier to improve many areas of your business by a small amount than it to improve one area by leaps and bounds.

Marginal gains theory was pioneered by Sir David Brailsford, the former British Olympic Cycling coach and performance director of Team Sky, who led his teams on to an unpreceded run of success – including eight gold medals at the previous three Olympic Games and three Tour de France wins – by making a number of small adjustments to the way the organisations were run.


What are marginal gains?

Brailsford’s idea of marginal gains comes from the notion that if you break down the various factors that go into riding a bicycle, and improve each part by 1%, the rider and their team will benefit significantly when all these parts are put together.

In addition to the physical components of riding a bike such as the mechanics and physical fitness of the athlete riding it, the marginal gains theory also looks at elements such as the implementation of modern technology and the automation of key processes.


How do marginal gains work for business?

In a wider sense, the philosophy of marginal gains effectively states that improving 25 factors by 1% offers the same result as improving just one factor by 25%. For this reason, the principle of marginal gains can be applied in many situations, including the running of a business.

Making incremental improvements to your business processes should be the aim of any marginal gains strategy. Using strategic thinking married to achievable goals and the embrace of modern technology – including productivity software, CRM systems, and automated apps – companies can realistically increase their operational efficiency while simultaneously cutting costs.

Cutting the time taken up by inefficient tasks allows companies to spend their time and resources more effectively. The time saved by making marginal gains can be used to nurture new leads and drive more orders to your business, as well as allowing you to review your operational practices and identifying further areas for growth or improvement.


Make marginal gains by using modern technology

Using technology, marginal gains can also be made by automating areas of your business that don’t require the human touch. You could consider setting up automatic invoicing, enabling you to create and send invoices to your clients without having to manually type each one, and without you having to pick up the phone to chase late payments.

If your client or employee information is stored in an out of date or even paper-based system, you could also help make your business more streamlined by creating a single, centralised database enabling you to easily input and search for information at a touch of a button, and help eliminate potential human error associated with manual data processing.

By mapping your employees’ tasks and monitoring their workload via a virtual planning tool such as HubSpot or Wunderlist, you can also make efficiency gains by making sure that the correct amount of time is allotted to a certain task, prioritizing jobs, and helping ensure deadlines are met.


How do I achieve marginal gains?

Time is money and it can be difficult – and sometimes even overwhelming – to find enough of it to plan efficiency improvements, let alone implement them effectively. However, taking a few moments to think about your business goals has the potential to reap big rewards.

Take a step back and consider where you want your company to be, both now and in the future. Set a number of small achievable goals based upon measurable criteria such as sales figures or the number of clients you have.

Next, analyse the gap between your current performance levels and your goals, and create a way of measuring the improvements you’re about to make using a handful of KPIs. Remember, this is all about achieving marginal gains so aim for a number of small improvements, such as a 1% increase in turnover, or a 1% increase in the number of clicks your email newsletters receive.

If you require inspiration or unsure of how you can achieve these improvement levels, take a look at your successful competitors and find out if they’re doing anything well that you’re not.

So that you can effectively measure your improvement levels on an ongoing basis, compile regular reports and continually refine your work until you move closer to hitting your targets.

Although it may not feel you’re making a lot of gains initially, if you improve each of your KPIs by just 1%, over time you will start seeing tangible results.


Are marginal gains worth it?

The benefit of marginal gains can’t be ignored – as we’ve demonstrated, they have the power to make your business more streamlined and efficient, whilst boosting your bottom line. So, what are you waiting for? Get working on your plan for making marginal gains today!


Can we help?

An Accounting Gem has a wide array of clients all of whom have at some stage aimed at improving their internal processes to maximise efficiency – which essentially is what the principle of marginal gains is all about. We are all about sharing best practice so, if you are thinking about putting the principles into action and not sure where to start, then why not get in touch to see if we can help point you in the right direction.

Of course, if you have any accountancy or bookkeeping requirements then we would also like to hear from you. Please call An Accounting Gem Limited on 01473 744 700 or email us at to find out more.