Our agency's profit margin hit 32% last quarter and I'm still shocked

We run a small web design shop with five people, and for years we were happy with a 15-20% margin. Last quarter, after we cut two low-paying legacy clients and raised our rates on new projects, the number jumped to 32%. It wasn't about working more, it was about working smarter with better clients. That extra cash let us finally buy a proper project management tool, Asana, for the whole team. I always thought chasing higher margins meant being greedy, but it actually gave us room to breathe and invest. Has anyone else seen a big jump after dropping your worst-paying work?

3 comments

3 Comments

robert_bennett2911d ago

My buddy runs a print shop and had the same thing happen. He got rid of his three biggest headache accounts that paid peanuts, and his margin shot up almost overnight. That extra money wasn't just profit, it let him fix a broken piece of equipment he'd been limping along with for a year.

jesse_harris11d ago

Sounds too good to be true, right?

haydensanchez11d ago

That part about fixing the broken equipment really hits home. It's wild how we'll put up with awful clients just to keep the money coming in, even when they cost us more than they pay. Your buddy was basically running a charity for those three accounts. Freeing up that time and stress is its own kind of profit, on top of the actual cash. More people should run the numbers on their worst customers, because the answer is usually kinda scary.