Making Money in the Middle: Mastering Margins in Your Business

Revenue gets all the attention. Profit gets the headlines. But the real money—the part that determines whether your business grows or grinds—is in the margin. Your margin is the space between what it costs you to deliver and what you keep. It’s the financial oxygen of your business. And if you’re not managing it intentionally, you’re probably leaving money on the table—or bleeding cash without realizing it.

Margins are where smart businesses win. And weak ones slowly die.

What Exactly Is a Margin?

Gross Margin

Gross Margin = (Revenue – Cost of Goods Sold) ÷ Revenue

This tells you how much of every dollar you earn is left after covering direct costs (like materials, production, or delivery).

Net Margin

Net Margin = Net Profit ÷ Revenue

This is what’s left after all expenses—salaries, rent, taxes, admin—have been paid.

Margins measure efficiency. They answer one key question: How much are you really making from the work you’re doing?

Why Margins Matter More Than Revenue

You can be doing $2M a year in sales and still not have enough to pay yourself. Meanwhile, a smaller $400K business with healthy margins could be generating more take-home income and less stress.

High revenue with low margins = impressive, but dangerous

Modest revenue with high margins = stable, scalable, and bankable

The Warning Signs of Margin Trouble

• You’re busy but constantly cash-strapped

• Costs creep up but prices stay the same

• You win a lot of deals but lose money fulfilling them

• You have no idea which products or services are truly profitable

• You’re growing—but so is your stress

If you’re not checking your margins regularly, your growth might be unsustainable.

Where Businesses Lose Margin

1. Underpricing

Most small businesses start by pricing emotionally—not strategically. You price based on what you think people will pay or what competitors charge. But if you haven’t calculated your true cost, you might be setting yourself up to lose from day one.

2. Scope Creep

You agree to one thing, then the client asks for “just a little more.” One small favor turns into hours of unbilled work. Margins vanish.

3. Inefficiency in Delivery

You’re spending too much time, labor, or materials to fulfill what you sell. That bloated fulfillment cost kills your margin silently.

4. Discounting to Close

You lower prices to win business, thinking it’s temporary—but then you build a client base that expects lower rates. You’re working harder for less.

5. Vendor and Cost Increases

Your costs go up but you haven’t adjusted pricing in over a year. Inflation eats your margins while your invoices stay the same.

How to Improve Your Margins

1. Know Your Numbers—Down to the Line

Break down your services or products by:

• Direct costs

• Labor or time required

• Profit per unit or project

Stop guessing. Start measuring.

2. Raise Prices (The Right Way)

Most businesses are undercharging. If your work is valuable and in demand, raise your rates. Explain the value, not just the price. Offer package tiers or value-adds instead of discounts.

3. Streamline Your Delivery

Cut waste. Automate where possible. Standardize processes. Every hour saved is margin gained.

4. Create Premium Offers

Add a higher-tier package with more value and higher profitability. People will often buy the middle—but offering a premium sets a new benchmark and boosts margins across the board.

5. Track Your Most (and Least) Profitable Work

Focus your energy on the services, products, or clients that give you the best ROI. Cut or phase out low-margin offers unless they’re loss-leaders with strategic value.

Real Example: Margin Makeover

A service-based business I worked with was generating $750K/year—but only netting 8% profit. We dug in and found:

• Low hourly pricing on their most labor-intensive offer

• No boundaries on client requests (scope creep was killing them)

• Vendor software eating up over $2K/month unnecessarily

We restructured their offers, raised rates by 20%, created clearer client scopes, and swapped two bloated tools for leaner systems.

Within four months:

• Gross margins jumped from 40% to 58%

• Net profit doubled

• The founder got a real paycheck—for the first time in 18 months

Final Thoughts: Protect the Middle

You don’t build wealth by selling more. You build it by keeping more of what you earn. That happens in the middle. That’s where the margin lives. Tighten it, guard it, and grow it on purpose.

👉 Book a margin strategy session if you’re ready to stop losing money in the middle and start building a business that actually pays you back.

Revenue is loud.

Profit is quiet.

Margin is where you find both.