More Revenue Won’t Fix a Broken Cost Structure

I sat with a $2.5m flooring business owner recently.

Solid company.

Flat out busy.

Heaps of work on.

He told me he needed to get to $4m before the business “worked” for his family.

More revenue.

More management.

More scale.

But when we pulled apart his numbers, the issue wasn’t revenue.

He was running his delivery team entirely on contractors. Cos good floorers work for themselves.

High cost of sales.

Margin squeezed ie. stuff all gross profit.

Cash tight every January.

He didn’t need another $1.5m in revenue.

He needed to lift gross margin by 3 - 5%.

That alone changes everything.

On $2.5m, a 4% margin lift is $100k.

With everything else remaining the same… that all hits the bottom line.

Not hunting more leads.

No extra stress.

No extra admin.

Just better structure.

Revenue hides mistakes.

Gross profit exposes them.

If you’re a $1m - $3m NZ business and you’re busy but still feel stretched, don’t default to chasing more sales.

Fix the middle of the P&L first.

Business is lonely.

There’s no “How to run a small business in NZ” school.

If you’re open to being challenged on why your business isn’t dropping out more profit, flick me a message.

Just don’t come with the ‘Nah, it has to be this way’ cos that won’t fly with me.

I’ve seen and learnt too much to accept that.