How to Scale Profitability Without Losing Your Margins

By Evan Nierman, an Entrepreneurs’ Organization member in South Florida and the CEO of Red Banyan, a global PR firm specializing in brand building, communications training, and crisis management. Below he shares about the key differences between revenue and profitability and how to scale a business effectively.

Ask most entrepreneurs about their growth goals, and you will hear some version of. “We’re scaling!” It sounds impressive, and it feels ambitious. However, the question that often goes unasked is, “Are you scaling profitably?” 

It is easy to chase top-line revenue. Add customers, open new markets, expand your offerings. More often than not, however, as revenue rises, the profit margin shrinks. Teams quickly grow bloated and costs balloon while complexity increases. Then, you wake up one day with more sales, but far less cash and bottom-line profits flowing into your account. 

Growing revenue without ramping up profit as well creates more pressure than progress. It adds risk, not resilience, to your company. Throughout time, that kind of growth can become exhausting and unsustainable. 

If your goal is to build a business that doesn’t just survive, but thrives, then growth alone is not enough. What matters more is how you grow. Profit should never be an afterthought. It needs to shape your overall strategy. The real challenge is scaling with discipline—expanding your reach and sales while fastidiously protecting your margins. So, what does profitable growth look like in the real world? Let’s break it down. 

Know exactly how much growth is costing you. 

Not all growth is created equal. In fact, some growth can quietly erode your business from the inside out. Maybe you are issuing discounts to win market share. Maybe you are spending heavily on acquisition just to hit revenue milestones. Perhaps, you keep saying yes to low margin deals that keep your team busy, but don’t move the needle or deliver big returns. 

If your cost to grow is eating up your margins, you are not building a healthy business. You are just inflating the top line. As a brilliant coach facilitator told me at my first EO Accelerator meeting, “Revenue is vanity, profit is sanity, and cash is king!” 

Take a hard look at your numbers. Understand the true cost of each customer, product, or service line. Do not just track revenue, but instead have a clear idea of what it actually takes to deliver on that revenue. 

Build margins into the model early. 

Too many founders chase growth first and then try to figure out profitability later. Unless you are a well-funded tech startup racing to pump up adoption rates of your offering, that almost never works for scrappy small businesses. 

Instead, it is far better to reverse that mindset. Design a business that works profitably at a small scale and prove that your unit economics make sense early. That way, when you do grow, you are scaling something that you already know is sustainable. 

This means pricing with intention. Knowing your break-even points. Resisting the urge to undercharge just to close a deal. If your margins are thin now, then you should expect them to get even thinner when you must finance growth in the form of more development, acquisition of equipment, or a rapidly expanding payroll. Build a model that supports margin from day one, not as an afterthought. 

Get ruthless about cost discipline. 

Growth often brings noise—extra tools, larger teams, and more overhead. When things are moving fast, it is easy to approve every hire, subscription, or nice-to-have, because revenue is flowing. However, speed without control often leads to margin erosion. 

Healthy companies and smart founders review their expenses often. They ask hard questions. Is this tool still useful? Can this role be refocused? Is there a more efficient way to deliver the same value but at a lower cost? Cost discipline does not have to mean cutting corners. It actually helps you fiercely protect your margin as you grow. 

Scale what’s working and cut what isn’t. 

Scaling profitability means knowing what actually drives profitable growth and knowing precisely what doesn’t. That requires real data. Which products deliver the best margin? Which services create the most value with the least effort? Which clients are your most cost-effective to serve? 

Once you have these answers, you can focus. That means doubling down on your most profitable offerings while also cutting what drains your time and profitability. Not everything deserves to be scaled. The fastest path to profitable scale is doubling down on what you know and can prove already works. 

Align your team around profitable growth. 

If your team is focused only on top-line goals, then they will make decisions that cut into profitability. Sales teams overpromise. Marketing departments chase leads that never convert. Operations people over-staff accounts to solve short-term problems. 

Instead, make profitability a shared priority company wide. Set goals that reward efficiency, not just activity. Help each department understand how its work impacts both revenue and the organization’s percentage of profit. Encourage questions such as, “Can we do this faster, smarter, and with fewer resources?” When everyone on your team is thinking about both growth and efficiency, better decisions get made. 

Grow with discipline, not just ambition. 

Scaling a business is exciting, but if done improperly then it is also risky. If you grow too fast or without intention, profit often gets neglected. However, when you scale with discipline, you build something far more valuable than just a big company with hot-shot revenue metrics to brag about. You build a strong one. 

So, before you chase that next revenue milestone, take a breath and be sure that you have total clarity on what your profit needs to be as you leap to the next level. Making sure that your company’s structure can support it and getting clear on your profit goals, priorities, and plan for growth will help you grow without risking what matters most. 

When it comes to your business, revenue can be alluring. However, it is robust and predictable profitability that will bankroll your future and provide the financial rewards that should be the hard-earned byproducts of each entrepreneur’s ingenuity and hard work. 

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