We Made More Revenue, But Less Cash.

A couple of years ago, we reached a point in our business where we were growing rapidly.

More revenue than we’d ever seen, a team of 145, and national distribution.

People were congratulating us…

Internally though?

We were drowning.

Even though we looked successful from the outside.

More revenue than we’d ever seen, our ship had many holes.

We couldn’t seem to hold onto cash.

The bank account wasn’t growing.

But the pressure was. Wages up. Cost of goods up. Logistics and partners taking more margin.

Customers loved us, but we were sweating bullets trying to fund the next week.

And I just kept thinking we could grow our way through it.

That it was just an ‘inefficient phase’ that would be solved by moving more volume.

The reality was, scaling inefficient processes or bad margins doesn't make it better.

It makes the problem bigger.

The solution was to fix what we had, rather than adding more.

But it’s something I see over and over again:

Founders chasing topline, bleeding from the bottom.

So I thought we should dive into it today.

In fact, if you’re not intentional, it often means less profit.

The reasons are simple but brutal:

Fixed cost creep: You hire ahead of when you need. Upgrade software in advance. Take on office/equipment leases too early. All while hoping revenue will catch up.

Margins shrink quietly: Discounts sneak in. Packaging and service improve at a cost. Delivery and Ops get more expensive.

Operational bloat: You lose the “scrappy” edge as you polish. Things take longer. There’s more complexity in management structures.

Revenue masks mistakes: You stop tracking COGS properly because revenue grows. Your roles get murky. You grow through inefficiency instead of fixing it.

Even public companies get caught.

Uber didn’t make a profit until 2023, despite billions in revenue.

Blue Apron scaled fast, hit $880M in sales… and still lost money.

Many of the companies we admire are often on the brink of running out of money… while everyone thinks they were winning.

What You Can Do About It

Here’s what I wish I did earlier, and what I’d tell other founders today:

1. Track your ACTUAL cash

When you stare at your P&L, it hopefully shows a positive number (even if it’s small).

But as you know, it doesn’t mean you have all that cash sitting around.

Often things like old debts, equipment repayments and leases, directors’ fees, even some taxes are taken after that first “net profit” number.

Some of those costs also sit on your balance sheet. A completely different piece of paper that most people don’t read…Quietly sucking the life out of your business.

(That’s where I discovered our greatest problem)

The key is to get an understanding of every single piece of cash that leaves your business account using an Actual Cashflow Analysis. This will help you understand where all your money is going.

2. Forecast Cash Weekly — Not Monthly

When you’re in a cash crisis, it forces you to assess things weekly.

Coming out of it, I’ll never go back to monthly accounts

Every Monday, start to ask: Do we have enough cash to fund this version of the business for the next 12 weeks?

If the answer’s no, pause on growth until you fix margins.

There’s often greater upside in reducing costs than adding more revenue to cover your costs.

3. Test New Products in Small Volumes First

Never build a new revenue line unless you’ve tested it.

I was terrible at this.

So self-assured that my ideas would work. Until they didn’t.

Someone wise taught me to Test Test Test. Every new change can and should be tested with minimal cash or risk, so when you turn it on, it actually improves margin.

In our case, we learned that we were investing in equipment, leases and hiring people at the wrong times. That the new thing added operational drag. And that our pricing had to be increased or decreased.

If you have multiple customers or multiple locations, don’t be afraid to test new things or changes on a segment of your customer base first before going live across your whole business.

4. Build the “Profitable by Default” Rule

So many founders think scale solves profit.

(I was one of them)

Unless you’re chasing big scale to exit like a hero, chasing top-line growth thinking it solves your cash/inefficiency problems is just plain stupidity.

Only look at adding more revenue if:

Gross margin holds

You don’t need extra labour

Production/delivery is streamlined

You can scale without adding cost in 3 other places

Real Talk

These are the kind of topics that don’t make the LinkedIn highlight reel.

But it’s what separates operators from optimists.

If you're reading this, you’re probably operating a business that’s past startup mode, or you’re in a position where you don’t want to make mistakes as you grow.

Having learned the hard way that fixing is better than avoiding, I've started talking about it more in my emails.

Also why I'm thinking of changing the name of my weekly email to something like: Fix Before You Scale.

Every week: brutal truths, frameworks that work, and a kick in the arse when you need it.

Love to know your thoughts or opinions on it?!

On that note...

This Week’s Fix: Know Your True Margins

Pull your last 3 months of revenue and calculate the true margin per channel.

See what’s actually funding your business — and what’s draining it.