Under capacity. Low margins. Your instinct says chase volume. Your instinct is wrong.



Your financial performance depends on sequence. Your profitability strategies require fixing margins before pursuing growth.

Here's the strategic decision matrix:

Healthy margins, at capacity? RAISE PRICES. Test 10-15% increases, shed worst customers.

Low margins, at capacity? RAISE PRICES urgently. Fix pricing, develop differentiation.

Healthy margins, under capacity? GROW VOLUME at current prices. Invest in marketing and sales.

Low margins, under capacity? FIX MARGINS FIRST. Cost reduction plus differentiation, then volume.

Your business efficiency collapses if you grow low-margin operations. Your profit margins don't magically improve with scale.

The critical insight: In almost every scenario, margin improvement comes BEFORE volume growth. The only exception is when margins are already healthy and capacity is available.

Most business owners in the worst position-low margins, under capacity-make the worst decision. They chase volume hoping scale will fix margins.

It never does.

Growth amplifies whatever dynamics already exist in your business. If your margins are poor and operations are chaotic, more volume makes everything worse.

Your earnings improvement requires fixing the margin problem first. Your cash flow management demands profitable operations before expansion.

The sequence matters:

 1. Fix margins through pricing and differentiation

 2. Optimize operations for efficiency

 3. Then grow volume systematically

Your revenue growth should accelerate profitable operations, not subsidize unprofitable ones. Your bottom line growth depends on this sequence.

Stop hoping volume will fix your margin problem. Start fixing your margin problem, then growing from strength.

Business Owners hire Next Step CFO to double and triple their profit using business and financial strategies that their competition isn't doing.