My Mistake: Accepting Razor-Thin Margins
Dan Kahn says he spent years chasing top-line revenue but somehow the bottom line never scaled the same way.
Good Morning!
Here are today’s highlights:
Alan Pentz says he initially dismissed the AI hype. Now he thinks it’s changing everything.
Actually, says Josh Patrick, accepting an earnout when you sell a business is even worse than you think.
The owner of a roofing business says his clients have shifted from growth mode to no-spending mode.
Having trouble finding skilled workers? Stop waiting for someone else to solve your problem, says a former CEO.
MANAGEMENT
The Problem With Chasing Revenue: “I started Kahn Media nearly 17 years ago with a journalism degree, a background in PR, and zero formal training in business or finance. I bootstrapped this thing from a laptop in a spare bedroom to one of the top agencies in the industry. But I made a critical error along the way: I assumed that running an agency meant razor-thin margins were just the cost of doing business. Growth meant chasing top-line revenue. And yes, our revenue grew year over year. So did our team, our influence, and our client roster. But the bottom line never quite scaled the same way. I figured that was just how it worked. Until recently.”
“I joined a mastermind group for agency owners. On our first call, I listened to five or six agency founders talk about real profitability. Margins I used to think were fantasy. I was floored. Honestly? I was embarrassed. And more than a little nauseous. That’s when someone recommended the book Profit First by Mike Michalowicz.”
“The book is a game-changer. It flips traditional accounting on its head. Instead of ‘Revenue - Expenses = Profit,’ it reframes the formula as ‘Revenue - Profit = Expenses.’”
“Michalowicz applies a concept similar to the envelope budgeting system Dave Ramsey made famous, but tailored to how a business manages cash flow. You allocate profit first, then pay everything else with what remains. It’s simple in theory, hard in practice, but powerful.”
“We’re now implementing the system at Kahn Media. It’s a heavy lift, but it’s already making a measurable difference.” READ MORE
