A few months ago, a client came to us thrilled that his business had doubled in size. Revenue was up, the phone was ringing, and he’d hired more staff to keep up with demand. On paper, it looked like success. But when we sat down to review the numbers, his profit had barely moved. Despite the growth, his business bank account was under more pressure than ever.
It’s a common pattern. Growth feels exciting, but it often hides inefficiency. As sales increase, so do costs, and without constant recalibration, margins quietly shrink. You end up running faster on the same treadmill, working harder for the same money. The truth is, growing revenue without growing profit can leave a business owner worse off than before.
Growth should create freedom, not fatigue. But to do that, the business model must evolve as the business scales.
The biggest culprits we see are:
Hiring ahead of efficiency, rather than building systems first
Failing to review pricing in line with costs and market positioning
Taking on work that adds revenue but not real margin
Neglecting to measure profitability by product, service, or client type
Here’s how we helped that client turn it around
We broke down his services into clear categories and calculated the margin on each one. The results were eye-opening. Some jobs were profitable, but others were losing money once wages and overheads were factored in. By increasing prices for low-margin work, standardising a few processes, and dropping one unprofitable service line, he lifted his gross profit by over 12 percent in six months without adding a single new client.
Recommendation
If your revenue has grown but your profit hasn’t, here are a few steps to fix it:
Review your pricing every 6–12 months. If costs or wages have risen, prices should too.
Know your numbers. Track your gross profit and overhead ratio each month.
Focus on profitable work. If a service or client isn’t paying its way, adjust or let it go.
Create capacity before hiring. Efficiency beats headcount when margins are thin.
Some owners fear losing clients if they lift prices or streamline services. In practice, good clients respect businesses that know their worth and deliver value. It’s better to lose a few low-margin customers and free up time for the right ones than to keep everyone and stay stuck.
Summary
The goal of growth isn’t just more turnover. It’s more freedom, more profit, and less stress. When your margins improve, you have cash available for tax, investment, and opportunities. You can pay less tax through smarter structuring, reinvest profits strategically, and get ahead faster with less risk.
Contact Us
If you’ve grown but your profit hasn’t followed, it’s time for a financial health check. We help business owners identify where profit is leaking and how to fix it quickly. Book a business review with our team and find out how to make your next stage of growth pay you back.
Contact us today to discuss on 07 827 9130 or email us. Our office is in Cambridge, NZ, but distance is no problem. We have many international and national clients.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
