Some businesses look healthy from the outside – sales are up, the team is busy, the pipeline looks solid – but the profit just isn’t moving the way it should. If you’ve ever looked at your numbers and thought, “We’re growing, so why doesn’t it feel like it?”, you’re not alone. For many growing organisations, it’s not one big problem; it’s a handful of quiet leaks sitting in the background.
Below are some common places where I see profit slipping away, along with practical ways to tighten things up.
1. Get honest about your real costs
As businesses grow, costs get more complex. Different locations, teams, software, freight, rebates – it all adds up. If you’re pricing on “rough averages” or old assumptions, there’s a good chance some of your products or services are underpriced.
Things to look at:
Break down direct and indirect costs for key products or services (materials, labour, overheads, freight, software, storage, packaging).
Include the “quiet” costs: subscriptions, transaction fees, shrinkage, returns, and rework.
Separate fixed and variable costs in your reporting so you can see what moves with volume.
Review supplier pricing regularly so changes don’t creep through unnoticed.
Use job costing or project reports where you can, especially on larger pieces of work.
A simple start: pick one flagship product or service and calculate its full cost to deliver. Then compare that to your price and margin and see if it still stacks up.
2. Check how you use discounting and pricing
In growing businesses, discounting can become a habit: “just sharpen the price a little to win the deal”. Over time, that pattern can erode margins far more than you realise.
Things to look at:
How often are discounts given, and for what reasons?
Which products or services are discounted most frequently?
Does your team understand the margin impact of shaving even a few per cent off?
Do you have any approval limits or a simple discount guideline?
When did you last review whether your pricing still reflects your current costs and the value you provide?
Pull a recent period of invoices and highlight every discount. Add up the total margin you gave away, then ask: could we have handled some of those situations differently (bundles, value-adds, loyalty rewards) instead of cutting price?
3. Spot operational friction before it turns into cost
As you grow, small process issues can turn into big dollar leaks. Delays, rework, double handling, and unclear handovers – they all chew up time and salary.
Things to look at:
How long do key processes take now compared with a year or two ago (quoting, onboarding, fulfilment, service delivery, billing)?
Where do jobs regularly stall or take a step back?
Are there steps being repeated by different people or teams?
Do people know the “right” way to do things, or have everyone created their own version?
Are there simple tools or automations that would remove manual data entry or follow-up?
Choose one recurring task – for example, preparing proposals or processing orders. Time it from start to finish, then ask the people doing the work where they see delays or frustration. Often, they already know where the fixable friction sits.
4. Manage stock, capacity, and waste with more intention
For product-based businesses, inventory can quietly tie up a lot of cash and margin. For service-based and hybrid businesses, it’s often unbilled time and unused capacity.
Things to look at:
How often do you review slow-moving or obsolete stock?
What is your stock turn on key lines, and how much working capital is sitting on shelves?
Where are you writing off goods, discounts on aged stock, or paying for extra storage?
For services, how many hours are spent on “internal” work that never gets billed or doesn’t move a project forward?
Are teams over-resourced in some areas and stretched in others?
Run a quick report:
For products, identify anything that hasn’t moved in the last 90 days. Decide whether to discount, bundle, return to the supplier, or discontinue.
For services, review a sample of timesheets and identify hours that don’t clearly link to revenue. Ask what needs to change so that time is either reduced or better recovered.
5. Watch for scope creep and “extras” in services
In larger organisations and growing teams, it’s easy for people to say yes to “just a bit more” for the client. Over time, all those extras add up to serious margin erosion.
Things to look at:
Are scopes and deliverables clearly defined at the start of each project?
Is time actually tracked against those scopes?
Do your teams feel confident to say, “That’s outside the original agreement, here’s what it would look like to add that”?
Do you have a simple change request process when things shift?
When you review clients or projects, do you look at profitability, not just revenue?
Pick the last few completed projects and compare what was agreed at the start with what was delivered. Note where extra work slipped in without a fee adjustment, and use that insight to tighten your scopes, conversations, and approvals next time.
Bringing it together
Improving margins in a growing business isn’t about squeezing every last cent out of your people or your customers. It’s about making sure good behind-the-scenes settings support the effort, talent, and investment you’ve already put in.
If you suspect your profit isn’t where it should be for the level of work you’re doing, start by choosing one of these areas and shining a light on it. Small, thoughtful changes can make a big difference at scale.
And if you’d like a fresh set of eyes on your numbers, the team at The BookSitters can sit down with you, walk through what’s really going on behind your revenue line, and help you spot where the leaks are – and how to fix them. Book a call here.
