High Revenue Months Don’t Guarantee High Profits
When Your Business Outgrows Your Financial Systems
How does a business making $146K/month end up with just 2.8% profit? That’s what one of our clients was facing when they came to us.
From the outside?
They looked like they were thriving: a strong team, consistent sales, and services in high demand.
But on the inside?
→ No clarity on which services were actually profitable
→ Labor costs were buried in the numbers with no visibility
→ Operating expenses were bloated (with some personal charges mixed in)
→ Sales tax was showing up as income
→ No true cash flow system
They weren’t struggling because they weren’t working hard. They were struggling because their financial foundation hadn’t evolved with their growth.
Enter: Our Tiered Approach
At Profit Priority, we don’t just throw a spreadsheet at the problem. We walk our clients through what we call the Financial Ladder, a tiered approach that grows with your business:
1 | Financial Foundation (Bookkeeping)
We start by cleaning up and organizing the numbers — breaking out income streams, clarifying COGS vs. Opex, and making sure your reports are audit-ready and accurate.
2 | Strategic Clarity (CFO Services)
Once the books are clean, we start building tools — budgets, forecasts, and labor tracking systems that give you real insight into what’s working.
3 | Protection + Planning (Tax Strategy)
Then we partner with your tax preparer to discuss your compensation, structure, and spending with proactive tax planning — so you’re not just earning more, you’re keeping more.
Back to this client… here’s what happened next:
✅ We separated income streams (cut/color, tips, extensions, products)
✅ Broke out and reconciled all payroll + labor costs (wages, benefits, taxes, contractors)
✅ Set up a real cash flow system
✅ Cleaned up Opex (including personal expenses and duplicate charges)
✅ Moved sales tax to the balance sheet and set up COGS/inventory tracking
✅ Reworked owner salary for tax savings
In just 4 months:
Revenue rose to $164K/month
Monthly expenses dropped
Profit margin jumped from 2.8% → 14.14%
They didn’t need a miracle.
They needed structure, clarity, and someone to help them see what the numbers were really saying. Reach out to us if you need this too.
