Profit Improvement Advisor — Find the Levers That Move Profit

Profit = Revenue − Variable costs − Fixed costs. Every profit improvement project moves one of those three numbers. Most founders default to 'grow revenue', but a 1% price increase often delivers 3–4x the profit impact of a 1% volume increase, with zero new acquisition cost.

The order of operations matters: first stop the bleeding (cut unprofitable customers, fix obvious leaks), then optimize margin (raise prices, reduce COGS, switch to higher-margin offers), and only then chase volume. Founders who skip the first two steps end up scaling losses.

In rough order of effort-to-impact: (1) raise prices on new customers by 10% — usually no churn impact and pure margin. (2) Fire the bottom 5–10% of customers by profitability — they consume most of the support load and complain the most. (3) Renegotiate your top 3 vendor contracts annually — many will give you 5–15% to keep the business. (4) Eliminate any recurring expense not used in the last 90 days — software stacks bloat fast. (5) Move payment terms from net-60 to net-15 with a 2% early-pay discount — improves cash flow more than it costs.

None of these require new product, new customers, or new hires. They're available to you this week.

If you're selling subscriptions or recurring services, churn is the most expensive line item you don't see on your P&L. A SaaS at 8% monthly churn loses its entire customer base every 12 months and has to refill it just to stand still — that's a hidden CAC tax of 8%/month on revenue.

Cutting churn from 8% to 4% effectively doubles your LTV, which doubles how much you can profitably spend on acquisition. The fastest churn fix is rarely product features — it's onboarding (do customers reach value in week 1?), packaging (are they on the right plan?), and proactive customer success (a 15-minute call at day 30 prevents 30% of cancellations). Fix churn before fixing the funnel.

Cost cuts can backfire if they hit growth-critical functions. The safe cuts are infrastructure overhead: software you don't use, office space you've outgrown the need for, agencies on retainer with unclear deliverables. The dangerous cuts are: customer success (kills retention), engineering (kills product velocity), or salespeople hitting quota (kills revenue).

Use the rule of three before cutting: (1) Does this expense produce measurable revenue or retention? (2) Would removing it save more than 5% of monthly burn? (3) Can we replace it with something cheaper without losing 80% of the value? If the answer to all three is yes, cut. Otherwise, leave it and find profit elsewhere.