Episode Transcript
[00:00:00] Speaker A: Foreign.
[00:00:07] Speaker B: Hey. Hey. Welcome back to the Total Profit podcast. Your go to spot for running a leaner and smarter and more profitable business. I'm your host T2, and with me is the man who has helped scale more businesses that I have owned.
Coffee mugs.
[00:00:24] Speaker A: Tommy B.
Oh, that's quite a comparison. I thought you were going to accuse me of being a runner. We'd both know better than that.
[00:00:34] Speaker B: Well, today's episode is one that every growing business needs to hear because we are talking about how to scale your business without sacrificing profit. So growth is great, but not if your margins disappear in the process.
[00:00:50] Speaker A: Exactly, Scott. Scaling should increase profit, not kill it.
So today we're walking through strategies that let you grow smart.
Not just big and not necessarily big, maybe just smarter.
[00:01:05] Speaker B: That's a good point.
So let's start with the trap. Tommy, what's the most common mistake that you see when people start scaling?
[00:01:16] Speaker A: Yeah, it's chasing top line revenues. They hire more people, take on more jobs, expand fast, but they don't adjust their system or pricing expenses. Balloon margin, shrink. Before you know it, they're bigger and broker.
[00:01:35] Speaker B: So you've been there and you've seen that more isn't always better. More often just means more stress and less cash in your pocket.
[00:01:46] Speaker A: Yeah. So in this segment we're going to talk about the foundation for profitable growth.
So before you scale, you need a solid foundation. Here's what that looks like. Know your numbers, margins, cash flow, break even points.
Please refer to episode five of Total Profit podcast.
Lock in your pricing strategy, streamline operations. First, don't scale inefficiencies.
[00:02:15] Speaker B: Right. If your current systems are messy with five clients, they're going to be a disaster when you have 50. Right. So make sure you're only scaling what's working.
I think that's a great point, Tommy. So let's get into some of the strategies. How do you grow without losing profit?
[00:02:38] Speaker A: Here's what works. You know, we, we've got a lot of great influencers and people in our, in our world that, that give us these, this information. So let's, let's put it to work. Product size, your services, standard and price, basis on value.
Along with that, automate and delegate those low value tasks.
There's ways to do that now from, you know, buying, buying people to help you out with those tasks or AI agent.
It's really cool.
The things that we can do with this. Grow with intention.
Don't say yes to everything.
Remember, you can do anything, but you can't do everything.
Use Your data.
So track job level profitability with tools like we prefer performance margin. And it gets in there and it shows you what your breakeven points are and your. Your costs on your material and your equipment. And it helps you keep that engine going.
[00:03:49] Speaker B: Okay, so let me just recap really quick. Productize your services.
Automate and delegate low value tasks. Either hire, help, or develop an AI agent. Grow with intention.
Don't always say yes to everything. We actually have plans for an upcoming podcast about how no can be profitable. So number four, use your data. Track your job level profitability.
That's really important. I would add one. I would say number five.
Protect your margins. Protect your margins. We keep beating this drum. Protect your margins like they're your kids. If a job doesn't meet your margin threshold, then it's a no.
Again, just a little foreshadowing there. I've got an upcoming podcast episode about the word no. But guys, sometimes that takes courage, right? Sometimes doing the right thing often does take courage.
[00:04:43] Speaker A: Absolutely. And it's that cultural shift that, that we. We're not used to. So, you know, we had a client scaling fast. Revenue was up. They were. But they're bleeding money. We restructured their service tiers, trimmed underperforming offers, tracked margins by project value.
All this was captured when we onboarded them into performance margin software. And within 30 days, they were profitable again, even at a higher volume.
[00:05:12] Speaker B: Well, and that's the magic of clarity and constrained also. So scale what works and make sure you're cutting what doesn't.
All right. For your total profit challenge for the week, why don't you walk us through what we kind of put together, Tommy?
[00:05:32] Speaker A: Absolutely. And please remember, this is for your company, because what other people are doing in their company doesn't directly affect your results.
So audit your current offerings. What's profitable? What's draining you? How does your quote align with your execution? Remember that that's critical in this. Review your delivery systems.
What of. These are inefficient. Review those. Update them so it's repeatable. Set a margin. Acceptable.
Excuse me? Set a margin.
Minimum margin. That's acceptable.
Don't scale below it. Margin targets are critical. It gives you the goal and the achievement of that goal. Create or refine your pricing model for scale. Know what your true costs are. This is something that you will hear consistently on total profit podcasts. We just pound it like a drum. That's what we're. That's. We're trying to get you to just absorb. Is that.
[00:06:34] Speaker B: Totally agree growth of your business should feel exciting. It shouldn't be exhausting, right?
So do it the smart way.
And with that, a big thanks to our sponsor, Performance Margin. This is the software that helps you track that job level profitability in real time. If you want to grow without guessing, this is going to be your secret weapon.
[00:06:58] Speaker A: Yeah. Performance Margin is how we help clients scale with precision.
Not flying blind. Just clear, clean data that helps you grow profitability.
And again, it's made by the working people for the working people.
[00:07:14] Speaker B: If this helped you subscribe, share our podcast. We've got more strategies that are really smart coming your way every single week. And so, until next time, take her cool. Take her cool. Don't get too excited. It's all under control.
[00:07:31] Speaker A: It's gonna be fine.
