The Revenue Obsession That’s Killing Your Business...
People act like it’s the be-all and end-all of business success. But for service-based companies, this focus is not only misleading but dangerous. Let me tell you why.
When I started my businesses, I was all about those big revenue numbers. I thought that the higher the revenue, the more successful I was. But after some tough lessons and partnering with Greg Forzani, I realized that focusing on margins was the key to real success.
The Real Metrics That Matter
Gross Margins: Understanding your gross margins helps you see the real profitability of each service you offer. It’s essential to know which services are worth your time and which aren’t. For example, you might have a high-revenue service that’s actually eating away at your profits due to high costs. Recognizing this allows you to pivot to more profitable services.
Net Margins: Net margins give you the complete picture of your business health. High revenue with low net margins means you’re working hard but not smart. It’s like running on a treadmill—lots of effort, but you’re not getting anywhere. By focusing on net margins, you ensure that your hard work translates into real financial health for your business.
Blended Margins: By analyzing blended margins, you can optimize your service mix and focus on the most profitable areas of your business. This means combining various services in a way that maximizes overall profitability. It’s about strategic balance—understanding how different services contribute to the bottom line and adjusting your focus accordingly.
For service-based businesses, the path to success isn’t paved with high revenue figures. It’s built on solid margins. By focusing on margins, you ensure your business is profitable, sustainable, and less stressful to manage. This isn’t just a theory—it’s a proven strategy that I’ve seen work time and time again.
Why This Matters to You
Imagine waking up every day knowing your business is running smoothly, your profits are stable, and you have the freedom to spend quality time with your family. That’s the power of focusing on margins. It transforms your business from a constant struggle to a well-oiled machine that supports the life you want to live.
I’ve helped hundreds of businesses shift their focus from revenue to margins and see remarkable improvements. These businesses not only increased their profitability but also achieved a better work-life balance. They went from feeling overwhelmed and stressed to confident and in control.
Focus on What Matters.
If you’re tired of the revenue rat race and ready to focus on margins, let’s talk. I’m here to help service-based business owners like you increase their net profit and reclaim their time. DM me "Let's Talk" and let's look at what's going on for you and the margins we need to fix.
This isn’t about working harder—it’s about working smarter and making your business work for you.
Talk to you soon,
Dennis