Letter 25: Fix the Margin First

Here’s a simple truth:

If your business is overloaded, it’s not time to grow.

It’s time to fix your margins.

Most people try to solve a capacity issue by adding more volume.

That’s like trying to fix a broken car by driving faster.

You want more profit? Start here:

Example: $1,000 Product 

You sell a product for $1,000

You sell it to 100 people/month

You make $100K/month

Now you raise the price to $1,300

You lose 20% of customers

You sell to 80 people

80 × $1,300 = $104,000

  • You make more money

  • You serve fewer people

  • You reduce fulfillment strain

  • You buy back your time

That’s margin. And margin = growth fuel.

Option 2: Raise Average Ticket 

Still charging $1,000?

Just sell more to the same people.

Add a simple upsell. Bundle something. Improve the offer.

Push your average ticket to $1,200

Still 100 buyers = $120K/month

  • No extra marketing

  • No new hires

  • Just more money from the same people

What to Do with the Extra Margin 

Here’s why this matters:

Margin funds scale.

With more margin, you can:

  • Hire better talent

  • Fix broken systems

  • Invest in leads

  • Stop babysitting operations

 

Low margin = no money + high stress

High margin = cash + capacity to grow

Action Step: 

Look at your numbers this week:

  • Where can I raise prices without breaking demand?

  • What’s one upsell I can test this month?

  • What constraint in ops is choking our growth?

 

More customers isn’t the goal.

More profit from the right ones is.

Do the little things,

Cody