How I find the real problem

Why sales go up and profit doesn't.

So the thing is, a lot of founders come to me selling more and keeping less. Pricing, marketing, customers and teams are managed separately, and nobody looks at how they affect each other.

Let me explain how I read a business, using the same examples I use with founders.

Sales Profit the gap This year Next year
The chart I draw first. Sales climb. Profit stays where it was.

How I diagnose

I read three parts of the business together.

Money. Customers. Marketing and sales. Most founders look at them one at a time, with a different person for each. The real cause almost never sits inside one of them. It sits where they overlap.

That's why I review the numbers, the customers and the channels before I say anything. Then you get a broad list of fixes, and the investment picture upfront.

MoneyCustomersMarketingand sales the realcause
One idea. The problem you feel is in one circle. The cause is usually in the middle.
Kavea listening, chin on her hand
I let founders talk until it's all out
Handwritten notes
Then I write down what I heard

What founders tell me

“We need more sales” can mean four different things.

  1. 1
    A thin marginYou sell a lot and keep very little of each order.
  2. 2
    A leaking websitePeople come, look, add to cart, and leave.
  3. 3
    A channel with no repeat buyersEvery customer is a new customer you paid for.
  4. 4
    A team spread too wideEveryone does a bit of everything, and nothing gets finished.

Each needs a different fix. More ad spend solves only one.

“Stop chasing your top line. Start tracking what's left.”

From one of my reels on margins
Kraft mailer boxes with labels
Every order has a box
A bar of chocolate on cloth
And a cost behind the price
A knit cardigan folded in a kraft box
And a customer who may come back
A wooden shape-sorter toy
I learnt this selling toys