“I Just Need More Sales” — Why That’s Usually the Wrong Answer
- 6 days ago
- 5 min read
I have had this conversation more times than I can count. A business owner sits down across from me — tired, stretched thin, working more hours than they ever planned to work — and tells me some version of the same thing: “If I could just get my sales up, everything would be fine.”
I understand why it feels that way. Sales are the part of the business you can see. You can feel a busy week. You can hear the phone ring. Nobody walks out of a good Saturday thinking about overhead.
A dollar of sales is not a dollar in your pocket
This is the part that quietly slips past most people. Every sale carries obligations long before the money reaches your account. Materials, labor, processing fees, fuel, freight, equipment payments, software, insurance — the list is longer than it seems in the moment.
So when a business is already operating at a loss, adding more sales does not automatically add more profit. In fact, if the underlying structure is upside down, additional sales can deepen the deficit. When you lose money on every job, more jobs simply accelerate the loss.
Expenses behave differently. A dollar you don’t spend is a dollar that drops straight to your bottom line. No deductions, no cost of goods, no erosion. It is whole.
Consider a simple example: you identify $500 a month in unused or forgotten expenses — a subscription, an idle piece of equipment, a service you no longer need. That is $6,000 a year you save, means every bit of it is profit.
To generate that same $6,000 through sales at a 30% margin, you would need roughly $20,000 in additional revenue. Twenty thousand dollars of new work, new scheduling, new collections — all to match what one careful afternoon reviewing expenses can accomplish.
Growth matters. But growth built on a broken cost structure is not growth. It is simply more volume of the same problem.
Running a business without your numbers is like driving at night with no headlights
The best description I know is this: imagine driving down a dark road with your headlights off and your dashboard blacked out. You may stay on the road for a while — you know the route, you’ve driven it before — but you have no sense of speed, fuel, temperature, or what turns lie ahead. You are relying entirely on luck.
And luck always runs out. A slow quarter. A major customer who quietly moves on. A payroll tax deposit due on a Friday when the account is thin. These moments feel sudden only because the warning signs were never visible.
Doubling your cost is not a 100% margin
This misunderstanding is very common, and so costly that it deserves careful attention.
An owner buys something for $50 and sells it for $100, believing they’ve made a 100% margin. What they’ve actually made is a 100% markup and a 50% margin. The difference between those two terms has quietly drained profit from small businesses for decades.
Markup measures profit against cost.
Margin measures profit against price.
Same transaction, same $50 of profit — two very different numbers. Build your pricing around the wrong one, and you will come up short every month without knowing why.
The solution is to work backward from the margin you want, not forward from the cost you hope will land somewhere reasonable. The formula is simple: Cost ÷ (1 − Target Margin)
But this only works if the cost you enter is your true cost — not just the invoice price. Freight, waste, spoilage, labor, processing fees, warranty work, returns — every cost you leave out of your pricing does not disappear. It simply comes out of your profit.
Understand what a discount actually costs you. At a 40% margin, a 10% discount does not reduce your profit by 10%. It reduces it by 25%. A 20% discount cuts it in half. Discounts are powerful tools when used intentionally. They are expensive when used blindly.
Your time is a cost. Charge for it.
This is where strong businesses quietly lose money year after year.
Owners often price materials, include a helper’s wages, and then assign their own labor a value of zero — because it feels free. The job “makes money” on paper, yet the account never reflects it, and the reason remains a mystery.
Here is the test: if you did not show up on Monday, would you need to hire someone to do your work? If the answer is yes, then your labor has a real cost, whether or not you write it down. Leaving it off the quote does not make it vanish. It simply shifts the burden from the customer to your household.
What to do:
Decide what an hour of your time is worth.
Include your hours in every quote before you look at the total.
Track actual time against estimated time — the gap is often where the profit went.
Price the unbilled work too: driving, estimating, purchasing, callbacks, phone calls.
Pay yourself regularly, like an employee, instead of taking whatever is left.
You did not go into business to work for free. If your pricing does not include your time, that is exactly what is happening.
What changes when you truly know your numbers
Inside the business, clarity replaces guesswork. You know which customers, jobs, and products create profit — and which only create activity. You can decline the wrong work without guilt because you can prove it is the wrong work. You price with confidence. You catch problems early, when they are still small enough to fix.
In your life, the change is even more profound. You can take a Saturday without the low hum of worry. You make decisions based on real financial data instead of instinct. Your choices feel better because they point toward planned profit. It is a different way to run a business — and a different way to live.
What it takes to begin
This is not a full rebuild. It is usually a short list of essentials put in order:
Clean, current books — categorized correctly and closed monthly.
A profit and loss statement you read and understand.
A real cost per job, product, or service — including every cost that belongs there.
Your own labor priced intentionally.
A target margin set on purpose.
Someone to walk through it with you until it feels familiar instead of foreign.
Most owners are only a few conversations away from seeing their business clearly for the first time.
Who we are
Business Advisory Services, LLC has been working with small businesses for more than twenty years, from our offices in Middleton and Eau Claire, Wisconsin, we travel the State of Wisconsin assisting small business is solutions that work. We handle bookkeeping, payroll, tax preparation, tax resolution, and business advisory work. The part we care about most is this: helping owners understand what their numbers are actually saying.
We are not here to hand you reports you never read. We are here to help you turn the headlights on and see the path ahead. One that is profitable.
If any of this sounded familiar
If reading about margin made you realize you don't know yours, you're in good company. Profitable, well-run businesses land here all the time. Margin just isn't something anyone teaches you — it's a conversation you've never had with the right person.
We are glad to have that conversation. Call us at 608‑831‑4900 ext. 801 and we will take a clear look at where your business stands. One conversation is often enough to show you how to read your gauges.
Give us a call.
Comments