27/09/2026
More revenue should mean more profit. Shouldn't it?
You'd certainly hope so.
But I've worked with plenty of businesses where revenue has grown year after year while the amount actually left for the owner hasn't moved nearly as impressively.
Sometimes it's gone backwards.
This can be difficult to spot in a growing service business because so many of the signals look positive.
More work. More clients. A bigger team. More invoices. More activity everywhere you look.
The business feels successful because it's busy.
But growth brings costs with it.
You add another employee because everyone is stretched. More clients create more admin. Senior people spend time fixing work that should have been done properly further down the line. Scope expands without pricing following it, and the owner keeps absorbing work nobody has quite worked out who else should do.
Individually, none of these things looks disastrous.
Collectively, they can swallow an enormous amount of profit.
That's why I don't get terribly excited about revenue growth on its own.
I want to know what it took to produce that revenue.
If turnover grew by 20%, what happened to gross profit? Wages as a percentage of revenue? Overheads? Productivity? Pricing?
And importantly, did the owner's financial return improve too?
Because there's a significant difference between growing a business and simply making it bigger.
Sometimes the opportunity isn't more sales.
It's getting more from what you're already doing.
Your revenue has grown. Has your profit grown with it?