You made $720,000 last year. You worked 70-hour weeks. You spent $54,000 on marketing. Your revenue grew 15%. So why do you still have low profit margins? Why can’t you take a paycheck without feeling guilty?

Every business owner I talk to tells the same story. Revenue looks good on paper. The business is busy. Leads are coming in. But when they look at their actual profit margin, it’s stuck at 8% to 12% when it should be 20% to 30%. The money comes in and leaks right back out before it ever hits their account.

So what does every business owner do? They chase more leads. They spend more on marketing. They try to grow their way out of the problem. If I just get 20% more customers, they think, the profit will follow. But it doesn’t. Revenue grows, hours worked increase, stress gets worse, and profit margins stay exactly where they were.

Here’s the truth nobody wants to hear. Low profit margins aren’t a marketing problem. They’re not a lead generation problem. They’re not solved by working harder or hustling more. You don’t need more leads. You need to stop the bleeding in the seven places your business is already losing money.

You’re about to plan 2026. If you build your growth plan on “get more leads” while ignoring low profit margins, you’ll work harder next year to make the same profit you made this year. Maybe less.

The Anti-Marketing Profit Advisor

I’m Ryan Herrst with Media Ace Advisors. I’m a Certified Profit Advisor and author of “Profit Foundation.” I help service business owners earning $250,000 to $5 million annually solve low profit margins without spending another dollar on marketing.

I’m the anti-marketing profit advisor. I used to run a marketing agency. I helped businesses generate leads. But I kept seeing the same pattern. Clients would get more leads, close more sales, grow revenue, and still struggle with low profit margins. The problem wasn’t at the top of the funnel. It was everywhere else.

My father taught me “All because you can, doesn’t mean you should.” That applies perfectly here. Just because you CAN chase more leads doesn’t mean you SHOULD, especially when you have seven other profit levers you’re completely ignoring.

Every business has seven profit levers. Leads, conversion, how much customers spend, how often they buy, your margins, keeping customers, and getting referrals. Most businesses obsess over ONE lever (leads) and ignore the other six. But here’s the math that changes everything. A 10% improvement across all seven levers creates 94% revenue growth and 156% profit growth. A 10% increase in leads alone? Just 10% revenue growth.

When you have low profit margins, more leads actually make the problem worse. You’re spreading your already-thin margins across more sales. You’re working harder to serve more customers while making less per customer. It’s a treadmill. You run faster, sweat more, but never actually go anywhere.

Over the past 18 months, I’ve helped dozens of service businesses fix low profit margins and add $50,000 to $150,000 in annual profit without increasing their marketing budget by a single dollar. The money is already in your business. We just need to stop it from leaking out.

Why More Leads Won’t Fix Low Profit Margins (The Math)

Let me show you why chasing leads with low profit margins is like running on that treadmill. You work harder, but never actually get anywhere.

Here’s a real example from a business owner I spoke with recently. I’ll call him David. David owns an HVAC company. $850,000 in annual revenue. Low profit margins at 9%. He was spending $4,200 monthly on marketing to generate leads. Getting about 25 leads per month, closing 8 new customers. Solid marketing funnel.

David’s problem wasn’t leads. His problem was that every new customer he got at $850 average sale cost him $525 to serve. His profit per customer was only $325. After overhead, his actual profit per customer was around $76. He was making 9% on every sale.

So what did David do? He hired a marketing agency (not me, this was before we met) to get more leads. The agency delivered. Leads went from 25 to 40 per month. New customers went from 8 to 13. Revenue grew 24% year over year. David was thrilled. Until he looked at his profit margin. Still 9%. He made $91,000 in profit instead of $76,500. A $14,500 increase. Not bad, except he worked 15 more hours per week and added $22,000 in annual marketing costs.

David grew revenue by 24% and increased his hours worked by 30% to gain $14,500 in profit. That’s $9.66 per hour for the extra work. He would have made more money working at Home Depot.

This is what happens when you chase leads with low profit margins. The math doesn’t work. You can’t grow your way out of a profit problem. You have to FIX the profit problem first, THEN grow.

Here’s what we did instead. We ignored lead generation entirely. We focused on the other six levers. Cut $18,000 in annual overhead costs. Raised prices 12%. Bundled services to increase average sale from $850 to $1,150. Improved customer retention from 73% to 89%. The result? Profit margin jumped from 9% to 19% in 90 days. Same number of leads. Same marketing budget. Double the profit.

The 7 Profit Levers (And Why You’re Only Using One)

Here are the seven profit levers in every business. As I explain each one, ask yourself: am I actively working on this lever, or am I ignoring it?

Lever 1: Leads. This is the number of potential customers entering your funnel. More leads means more opportunities. This is the ONLY lever most businesses focus on. You’re probably good at this one already.

Lever 2: Conversion. This is the percentage of leads that become customers. If you’re converting 20% of leads, improving to 30% gives you 50% more customers from the same marketing spend. Most businesses have no idea what their conversion rate actually is.

Lever 3: How Much Customers Spend. This is your average sale amount. Raising your average sale from $1,000 to $1,200 is a 20% revenue increase without a single additional customer. But most businesses charge the same prices they did three years ago.

Lever 4: How Often Customers Buy. This is purchase frequency. Getting customers to buy 4 times per year instead of 3 is a 33% revenue increase from your existing customer base. But most businesses never encourage repeat purchases in any organized way.

Lever 5: Margins. This is the percentage of revenue you keep after costs. Cutting expenses by 10% or raising prices by 10% can double your profit without touching your top-line revenue. But most businesses accept their current margins as unchangeable.

Lever 6: Keeping Customers. This is your retention rate. Going from 70% retention to 85% retention means you stop replacing 15% of your customer base every year. That’s pure profit growth. But most businesses don’t even calculate their retention rate.

Lever 7: Referrals. This is how many new customers come from existing customer recommendations. Referrals cost nothing to get and close at higher rates. But most businesses hope for referrals instead of asking for them in a structured way.

Now here’s the critical insight. When you improve ALL seven levers by just 10%, the multiplying effect creates 94% revenue growth and 156% profit growth. Not 70% growth (7 levers times 10%). It’s 94% revenue and 156% profit because the levers multiply each other.

But when you only focus on Lever 1 (leads), you get basic growth. 10% more leads equals 10% more revenue. And if you have low profit margins, 10% more revenue might only be 5% more profit after you account for the cost of serving those additional customers.

How to Actually Fix Low Profit Margins

You don’t fix low profit margins by guessing. You fix them by figuring out which of the seven levers has the biggest opportunity, then working on that lever first.

Start with a checkup. Calculate your current numbers on all seven levers. How many leads did you get last month? What’s your conversion rate? What’s your average sale? How often do customers buy? What’s your profit margin? What’s your retention rate? How many referrals did you generate?

Most business owners can answer the first question (leads) and maybe the third (average sale). They have no idea about the other five. You can’t improve what you don’t measure.

Next, compare to industry standards. An HVAC company should have 20% to 30% profit margins. A law firm should be at 40% to 50%. A restaurant should be at 10% to 15%. If you’re below industry standard, you have a profit problem, not a lead problem.

Then, find your biggest leak. Which lever has the most gap between where you are now and where you should be? That’s where you start. Don’t try to fix all seven at once. Pick the one with the biggest opportunity and focus there first.

Finally, improve that lever step by step. If it’s margins, look at your costs. If it’s retention, figure out why customers leave. If it’s average sale size, create package pricing. If it’s conversion, improve your sales process. Focus on one lever for 90 days, move it 10% to 30%, then move to the next lever.

This is how you actually fix low profit margins. Checkup, compare, find the leak, fix it step by step. Not hope. Not hustle. Not more leads.

Why December Matters

You’re about to set your 2026 goals. Most business owners will set a revenue goal. “We want to hit $1 million” or “We want to grow 25%.” Revenue goals with low profit margins are dangerous goals.

Growing revenue while keeping low profit margins means working more hours for the same profit. It means burning out your team. It means building a business that owns you instead of supports you.

Before you set your 2026 revenue goal, check your profit problem. Calculate your seven levers. Find your biggest leak. Fix that first. Then grow.

A business doing $500,000 at 25% profit margins makes more money and requires less work than a business doing $800,000 at 10% profit margins. The $500,000 business owner takes home $125,000. The $800,000 business owner takes home $80,000 and works twice as hard.

Fix profit margins first. Then grow on purpose. December is your window to get this right before January planning starts.

See Your Seven Levers (Free Diagnostic)

I’m currently interviewing service business owners for the second edition of “Profit Foundation,” my book on profit strategies for small businesses. During these 45-minute conversations, I walk through the 7-Step Pathway to Profit and show you which of your seven levers has the biggest opportunity.

It’s a research conversation, not a business pitch. I’m gathering insights for the book while sharing what I’m learning about improving profitability across different industries. Most people walk away with two or three specific opportunities to add profit in the next 90 days.

If you’d like to participate and receive a free copy of the book when it’s published in 2026, you can schedule here: https://mediaaceadvisors.com/contact/

There’s no cost and no sales pitch. These are real research conversations. I’ll show you your seven levers, you’ll see which one needs attention first, and I’ll get insights for the book. The December slots are filling up as business owners prepare for 2026 planning, so if this interests you, schedule before the end of the month.

Stop chasing more leads. Start keeping more profit.

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About the Author:
I’m Ryan Herrst with Media Ace Advisors. I help service business owners (annual revenue $250K-$3M, 10 or fewer employees) find hidden profit opportunities and create clear paths to growth. My approach focuses on improvements across all seven profit levers, with special focus on fixing low profit margins without increasing marketing spend.