If I could show you—mathematically—the expected return of making many 1% improvements, what would you imagine the impact would be on your bottom line? Most founders guess “more marketing,” “hire faster,” or “launch the next product.” Sometimes that’s right. Often, it isn’t. The highest-leverage moves are usually non-obvious—and that’s why small, 1% improvements (à la Atomic Habits) can compound into outsized results and massive return on investment (ROI)  when you target the right levers. This post shows how to turn the 1% idea into a decision-making system using a bottom-up financial model and real data—so you can make confident, profitable choices. Why 1% Works in Business (Not Just Habits) Compounding: Tiny gains stack on each other—day after day, month after month. Over time these improvements build on themselves. You can see using a bottom-up financial model the full impact in your forecasts.  Risk-smart: Micro-experiments cost less, reveal more, and protect downside. Often making small improvements might have minimal costs, and taken all together can make a huge difference to your bottom line.  Focus: You can’t fix everything. Improving a few right variables beats chasing dozens of “nice to haves.” If you understand the most important variables to focus on, this process will yield the best results. The only way to truly know which variables have the greatest impact is with a bottom-up financial model.  Where 1% Moves the Needle Think in terms of drivers, not departments: Customer Acquisition: +1% to click-through rate or –1% to CPC lifts qualified traffic without raising spend.  Conversion (CRO): +0.2–0.5 points at checkout ripples through revenue and cash flow.  Retention / Churn: –0.5 points of monthly churn can boost LTV more than a big ad budget bump.  Pricing & Margin: +1–2% on price (with stable conversion) expands gross profit immediately.  Capacity & Utilization: Small workflow fixes increase output without new headcount.  Quick math example: If monthly churn falls from 5.0% to 4.5%, LTV rises by ~11% because LTV ≈ ARPU × gross margin ÷ churn. That single “1%-ish” change can make all marketing more efficient. Model It First (Bottom-Up Beats Gut Feel) A bottom-up financial model breaks your business into inputs you actually control: traffic → conversion → AOV → repeat rate → churn → unit costs → capacity. Then it lets you simulate scenarios before you spend a dollar. Ask the model: What if conversion +0.3 pts?  What if churn –0.2 pts?  What if AOV +$2?  What’s the payback on a small price test?  Should we hire now or in a quarter?  The outputs translate into cash flow, customer lifetime value/cost to acquire customer (LTV/CAC), margins, valuation, and founder dividends—so you prioritize by wealth impact, not loud opinions. Track Micro-Shifts with Data (So Compounding is Real) Break down your model into actionable variables in as much detail that you can track with data. For example, if you can break down your sales funnel into all it’s components and increase each by 1%, the results would be larger than simply increasing sales by 1% Define leading indicators for each 1% goal (e.g., add-to-cart rate, onboarding completion, renewal intent).  Build a lightweight weekly dashboard; compare to a clean baseline. If (and only if) your data is organized into a central location, AI software can do this analysis with ease.  Use A/B tests and cohort views so you attribute gains to actions—not luck.  Feed results back into the model to re-rank next priorities.  Example: Fix Churn Before You “Add Spend” Instinct says “buy more traffic.” The model often says “fix the leak first.” Lower churn raises LTV, which raises your allowable CAC, which makes every existing ad dollar more effective. Sequence wins: Retention → Pricing/CRO → Then scale acquisition. A 90-Day Plan for Compounding 1% Gains Pick 3 levers with the highest modeled ROI (e.g., churn, checkout friction, pricing test).  Set 1% targets and run one controlled experiment per lever each week.  Hold a standing metrics review; keep what works, kill what doesn’t.  Update the model monthly; re-prioritize the next 3 levers.  Pitfalls to Avoid Chasing vanity metrics instead of unit economics.  Testing too many things at once (muddy attribution).  Skipping baselines—no baseline = no proof of compounding.  Final Thought Small changes can yield massive return on investment when you choose the right levers. With a bottom-up model and disciplined tracking, 1% improvements turn into material gains in cash flow, valuation, and founder wealth. Want to see where 1% improvements will compound fastest in your business? I’ll build a bottom-up financial model on your real data and map the next 90 days of micro-wins. Book a free consultation today. a quick meeting could yield massive return on investment. Book meeting here.