Margins
More revenue should not mean less reward.
The answer may sit in the work behind each sale: pricing, product mix, purchasing, rework or the cost of serving different customers.
Does this feel familiar?
Revenue is growing. Why isn’t profit?
- Busy teams but thin profit
- Frequent discounting
- Costs rise faster than revenue
Recognition is the beginning
Follow the work
Read the commercial decision alongside the work it creates. Revenue alone cannot explain the reward.
An illustrative starting point for investigation; the actual flow depends on your business.
- 01
Price
Start with what the order earns after discounts.
What might slow this down?
Discounts are approved without visibility of delivery cost.
Assess the impact using actual cases and evidence.
- 02
Mix
Compare the contribution of different orders and customers.
What might slow this down?
Revenue grows through work that earns less per unit of effort.
Assess the impact using actual cases and evidence.
- 03
Material
Compare material use with what the work required.
What might slow this down?
Waste, purchasing choices or variations erode contribution.
Assess the impact using actual cases and evidence.
- 04
Work
Identify the paid effort needed to fulfil the promise.
What might slow this down?
Resource allocation or delivery structure adds avoidable cost.
Assess the impact using actual cases and evidence.
- 05
Rework
Make the cost of doing work again visible.
What might slow this down?
Defects and corrections absorb capacity without adding revenue.
Assess the impact using actual cases and evidence.
- 06
Cost to serve
Include the exceptions and support each customer needs.
What might slow this down?
A standard price hides unusually expensive service requirements.
Assess the impact using actual cases and evidence.
What could be happening?
A different cause needs a different solution.
These are possible drivers to investigate, not a diagnosis of your business.
The visible symptom
Revenue is growing. Why isn’t profit?
Potential drivers to investigate
Price and mix
Which orders contribute more after discounts?
Material usage
How does actual usage compare with the plan?
Labour productivity
Where does paid time become avoidable effort?
Waste and service costs
Which exceptions make an order expensive to serve?
The economics of delivery
Better margins came from changing how the work was delivered.
10%improvement in gross margin
30%reduction in project costs
The pressure was financial, but the opportunity wasn’t sitting in one line of the budget.
I worked across how delivery was organised: how resources were deployed, how external vendors were used and where the delivery model added unnecessary cost. The changes improved the economics of delivery rather than relying on a simple cost-cutting exercise.
Selected experience from my career, before this independent practice.
What this reinforced for me
Margin appears on the P&L. What determines it can sit in resource utilisation, purchasing, productivity, capacity, rework or the way work is delivered. A financial outcome can begin somewhere completely different in the business.
How I may help
Fix the cause.
Improve the outcome.
Make the work behind each sale visible before choosing what to change.
The right change depends on where margin is actually being lost.
The answer might sit in pricing, purchasing, productivity, rework, capacity, process, ownership or technology. The evidence should tell us where to act.
Evidence before investment
Observe. Connect. Prove.
Quantify. Decide.
Follow actual work, test likely causes and assess the business impact before committing to a change.
- 01
Observe
Follow actual work.
- 02
Connect
Link symptoms to possible causes.
- 03
Prove
Test the explanation against evidence.
- 04
Quantify
Assess the business impact.
- 05
Decide
Choose what is worth changing.
What could improve?
Potential improvements depend on the diagnosis and your starting point.
- Clearer cost visibility
- Less margin leakage
- Better-informed commercial decisions
Connected outcomes
One change can reach further.
- Efficiency
Duplicate effort and rework add to the cost of delivery.
- Cash Flow
A profitable order can still tie up cash before collection.
- Growth
The mix of new demand affects the contribution it makes.
Let’s start a conversation
Where is margin being lost in your business?
A number that concerns you. A frustrating process. Something that should work better. You don’t need the root cause, a solution or a formal project brief.
In 30 minutes, we can explore what’s happening, what may be driving it and what deserves closer attention. A starting point, not a complete diagnosis or a commitment to a larger engagement.