A growing top line is usually a good sign. But sometimes, there’s a surprising amount of friction beneath the numbers. Revenue may be increasing. But if labor costs are rising, certain customers or projects produce thin margins, or operational inefficiencies quietly cut into profits, the company may be doing well overall without being nearly as profitable as it could be.
Improving business profitability starts with understanding where that gap is coming from. Once leadership can see what’s actually driving profit — and what’s eating away at it — they can focus on the areas most likely to make a difference.
Ninety days won’t solve every financial or operational issue in a business. But it can be enough time to understand where performance stands today, identify what’s holding profitability back, make targeted changes, and begin seeing whether those changes are moving the business in the right direction.
Want a clearer picture of what’s affecting your profitability? — Manchester RBG works alongside leadership teams to connect financial performance with what’s happening across the business. Talk with our team.
Step 1: What is Driving Profitability?
Before making changes, you need a clear picture of where the business is generating margin and where it may be losing it. Total revenue can only tell you so much. Depending on the business, a closer look might show that one service line is significantly more profitable than another, or that a high-revenue customer requires enough labor and resources to be far less profitable than they look on paper.
That’s where a baseline becomes useful. Measures like gross margin, operating expenses, and profit margin can give you a clearer picture of current performance before you start adjusting pricing, staffing, processes, or other parts of the business.
The specific numbers that matter will vary from one company to another. But it’s important to identify the financial information that shows which parts of the business are performing well and where profitability is falling short.
Step 2: Find Where Margin Is Being Lost
Once you know which parts of the business are underperforming, the next question is why. Pricing and direct costs are a good place to start. If material or vendor costs have increased, labor is taking longer than expected, or discounts have become more common, older pricing assumptions may no longer reflect the true cost of delivery. That doesn’t automatically mean prices need to go up. It does mean you need to understand whether current pricing still supports the margins you expect.
From there, the numbers can point you toward problems elsewhere in the business. Suppose labor costs on a certain type of project consistently come in above the estimate. The financials show you where the problem is showing up, but they don’t explain what’s causing it. That’s when you have to look at how the job is actually being scoped, scheduled, and completed. The estimate may be unrealistic, the job may be taking longer than expected, or scheduling may be creating unnecessary downtime.
That connection between financial performance and day-to-day operations matters. Once you understand what’s causing the higher cost, you can make a more targeted change instead of treating the number itself as the problem.
Step 3: Understand Labor and Capacity
Labor costs are most useful when you can put them into context. You need a solid understanding of what your current team can realistically produce, where capacity is being stretched, and whether people are spending time in ways that make sense for the business.
For some companies, the issue may be that employees are consistently overloaded and demand is outpacing what the team can deliver. In others, capacity may exist, but it’s tied up in inefficient processes or lower-value work that keeps more experienced employees from higher-impact work.
Hiring decisions should also be viewed through the same lens. Another employee adds cost, but they may also create additional capacity, remove a bottleneck, or make it possible to take on more profitable work. Before adding headcount, it helps to understand what that hire would actually allow the business to do differently.
Looking at labor this way gives you a better basis for deciding whether the answer is to hire, reallocate work, improve a process, or address another constraint that is limiting output.
Step 4: Get More From the Systems You Already Have
The right technology can make a business significantly more efficient. But when your systems aren’t configured around how your business actually operates, they can become a source of frustration instead — even when the underlying problem isn’t obviously tied to the tech stack.
That’s why it’s worth looking at how the software is being used before assuming the system itself is the problem. For instance, employees may have developed workarounds because the original setup didn’t fit their day-to-day needs. Over time, that can create duplicate work, inconsistent information, or reports that are difficult to rely on.
In those cases, you may not need new technology to improve efficiency. Getting more from the systems you already have can reduce unnecessary work and make life easier for the people using them.
Step 5: Get Financial Information Early Enough to Use It
Financial reporting is incredibly useful for understanding how your business performed over the course of a year. But when that information is only available after the fact, it can’t help you make adjustments while there’s still time to affect the outcome.
If margins on a certain type of work begin to slip, finding out in March gives you time to investigate and make adjustments. Discovering the same problem the following January, however, may explain why profitability missed expectations, but by then, you can only correct the problem going forward.
That doesn’t mean every business needs constant reporting on every possible metric. The information simply needs to be current enough to support the decisions you’re making throughout the year. It also needs to be useful. A practical question to ask is: What would we do differently if this number changed? If there isn’t a clear answer, that metric may not be especially valuable as a management KPI.
Depending on the business, that might mean monitoring gross margin, labor costs, profitability by job or service line, or another measure that helps you keep track of profitability on an ongoing basis. The specific metrics matter less than whether they help you spot changes, understand what’s happening, and make a better-informed decision about what to do next.
A Practical 90-Day Plan to Begin Improving Profitability
So how does all of this map onto a 90-day plan? Let’s take a look.
Days 1–30: Establish Your Baseline
Days 1–30 are all about setting yourself up for success. Look at current margins, costs, and profitability using the breakdowns that make the most sense for your business. That might mean comparing projects, service lines, products, customers, or other areas where performance can vary.
From there, look for meaningful gaps in performance. If one type of work consistently produces lower margins than another, or labor costs are noticeably higher in one part of the business, congratulations: you’ve figured out where to start digging.
Next, talk to the managers and employees closest to the work. They can help explain what’s happening behind the numbers and point to the operational issues that may be contributing to the result. By the end of the first 30 days, you should be able to narrow things down to a few key areas you want to focus on first.
Pro tip: Don’t try to fix everything at once. Changing multiple variables makes it harder to tell which changes are actually improving performance.
Days 31-60: Start Making Targeted Changes
The next 30 days are about acting on what you found. Depending on where profitability is being affected, that could mean revisiting pricing on consistently low-margin work, changing a process that is increasing labor time, adjusting how work is scheduled or assigned, or configuring an existing system more effectively.
Whatever you’re tweaking, make sure the change is specific enough that you can tell whether it worked. If labor hours are consistently running above estimates, for example, “improve efficiency” is too broad to evaluate. A more useful change might be adjusting how work is assigned or scheduled to reduce delays and unnecessary labor time, then comparing similar projects against the baseline you established during the first month.
That gives you something concrete to measure and a much clearer sense of whether the change is actually improving performance.
Days 61-90: Evaluate the Results
During the final 30 days, compare your early results with the baseline you established at the beginning. Did margins improve on the work you targeted? Are labor hours moving closer to expectations? Did the new approach reduce the time or cost required to complete the work?
You may not see a dramatic change in every metric within 90 days, especially when the issue involves longer sales cycles, staffing decisions, or larger operational changes. But you should be able to start evaluating whether performance is moving in the direction you expected.
If it isn’t, that’s useful information too. Take another look at what might be causing the problem, make a different adjustment, and see whether the numbers move in the right direction.
What Can Realistically Change in 90 Days?
Ninety days can be enough time to learn a lot about what’s affecting profitability and begin making meaningful improvements. But the goal isn’t to solve every financial or operational challenge in a single quarter.
Within the first 90 days, you may be able to:
- Establish a clearer baseline for profitability
- Identify where margins are falling short and investigate why
- Make targeted adjustments to pricing, processes, systems, or how work is managed
- Begin measuring whether those adjustments are improving performance
- Build a more consistent process for reviewing profitability throughout the year
Other outcomes naturally take longer to achieve, such as:
- Meaningful improvements from major staffing or organizational changes
- Full ROI from larger technology implementations or system overhauls
- Measurable results from significant pricing strategy changes
- Sustained gains from operational improvements that affect multiple parts of the business
The point of a 90-day plan is to make meaningful progress and establish a better way to manage profitability going forward.
Put Profitability Improvements Into Practice With Manchester RBG
If you’re ready to make changes that improve profitability, it may be time to bring in a team that can stay focused on the work alongside you. Manchester RBG integrates with your leadership team to connect financial performance with what’s happening across the business, identify practical opportunities for improvement, and help see those changes through.
Depending on your needs, that support can include:
- Financial reporting and performance analysis
- Operational efficiency and process improvement
- Labor, capacity, and organizational planning
- Systems and technology optimization
- Strategic prioritization and leadership support
- Hands-on implementation and ongoing follow-through
Manchester stays closely involved as improvements are put into practice, giving your team dedicated support so leadership can stay focused on the rest of the business.
Ready to take a closer look at what’s affecting your profitability? Talk with Manchester RBG today.
Key Takeway: Improving business profitability starts with understanding what’s driving your current performance. Over 90 days, businesses can establish where they stand, identify meaningful opportunities for improvement, and begin measuring the impact of targeted changes.