Stop Working Harder, Start Earning Smarter
When you think about “growing” your business, what’s the first thing that comes to mind? For most of us, it’s a ringing phone, a packed calendar, or a spike in total sales. But here’s the cold, hard truth: Revenue gets attention, but profit determines sustainability.
You can be the busiest person in town and still struggle to pay the bills if you aren’t guarding your gross profit margin. Being a profit builder isn’t about working more hours; it’s about making sure every hour and every dollar works harder for you.
Here are nine ways to stop the leaks and start seeing the rewards you deserve.
#1 | Champion Your High-Margin Stuff
Not all sales are created equal. If you sell a high-volume product with a razor-thin margin, you might actually be losing money once you factor in the overhead.
- The Fix: Apply the 80/20 Rule. Usually 20% of your services produce 80% of your profit. Find the 20% — the products or services that deliver the highest gross profit margin and point your marketing directly at them.
#2 | Tighten the Screws on Efficiency
In a service-based business, time is literally money. If your team is driving across town twice for one job, running to a supply house for materials that were forgotten, or searching for tools in a messy van, your profit is evaporating.
- The Fix: Use checklists, optimize your routing, and embrace automation. When you eliminate “empty time,” your margin naturally expands.
#3 | Kill the “Re-Work” Monster
Doing the job twice for the price of one is the fastest way to kill your bottom line. “Call-backs” don’t just cost you fuel, materials and labor; they cost you the opportunity to be at a new, paying job. They also burn out your best employees, who are often sent out to fix the issue.
- The Fix: Build a “Right the First Time” culture. Quality control isn’t a luxury; it’s a strategy for protecting your profit – and your team’s morale.
#4 | Price for Value, Not Just Cost
If you are pricing based solely on what your competitors do, you’re letting them run your business. Even worse, if the only reason a customer chooses you is price, you are nothing more than a commodity. Small businesses can’t win price battles.
- The Fix: Identify your “Purple Cow”. Price based on the unique value, convenience, and expertise you provide. A small increase in price often flows directly into your gross profit margin without significantly increasing your workload.
#5 | Audit Your Suppliers (The Missing Link!)
When was the last time you negotiated with your vendors? Small business owners often accept price hikes as “just the way it is,” but those increases eat your margins alive.
- The Fix: Review your COGS (Cost of Goods Sold) quarterly. Ask for volume discounts and look for alternative suppliers. For critical equipment, materials or inventory, a strong and diverse supplier network can help keep prices competitive.
#6 | Mind the Waste and Shrinkage
Whether it’s spoiled inventory, unused materials on a job site, or software subscriptions for online tools your team stopped using years ago – “waste” is a silent profit killer.
- The Fix: Track your materials closely. If you’re a contractor, are your crews using more material than quoted? If you’re in retail, is inventory disappearing? Track it and fix it with a good system for managing your inventory, materials and supplies.
#7 | Maximize Your Marketing ROI
Marketing shouldn’t be a black hole where you throw money and hope for the best. It’s an investment that should provide a measurable return.
- The Fix: Focus on retention and referrals. It is significantly cheaper (and more profitable) to sell to a happy existing customer than to hunt for a new one.
#8 | Master the Art of the “Add-On”
Efficiency isn’t just about cutting costs or getting more done; it’s about increasing the value of every single transaction.
- The Fix: Create a simple system for add-on sales opportunities. Whether it’s a maintenance plan for a service job or a complementary accessory in retail, add-ons usually have very low customer acquisition costs, meaning most of that revenue goes straight to your gross profit margin.
#9 | Know Your Numbers (Beyond the Bank Balance)
You cannot manage what you do not measure. Many owners focus on total revenue, but profit is the king!
- The Fix: Don’t just look at your bank account; look at your Profit and Loss Statement, including the cost of goods sold (COGS) and gross profit. It will tell you are operating with a profit. Identifying exactly where money is leaking—whether through supplier price hikes or wasted materials or excessive labor—allows you to make adjustments rather than guessing.
Related Article: Check out my article on Markup vs. Margin
Ready to Put Your Business on the Path to Real Profit?
As you can see, building a profitable business isn’t just about selling more—it’s about a “whole-business” approach to growth. By tweaking your systems, your pricing, and your focus, you can grow your bank account without doubling your stress.
Let’s find your hidden profit together.
Would working with a business coach help you take your operations to the next level? I’d love to explore the possibilities with you. Let’s hop on a complimentary 30-minute Discovery Session to discuss your goals, identify the obstacles in your way, and see if we’re a good fit to grow your business together.