AUDIT EVERY ACCOUNT · KNOW YOUR REAL MARGINS · CHOOSE GROWTH WISELY

Your biggest customers aren't always your best ones.

Here's a math problem most owners haven't done.

You have a customer who does $400K in business with you each year. They feel like your #1. You'd panic if you lost them.

Now run the real numbers:

• They negotiated 15% off list, so gross margin on them is 22% instead of your usual 38%

• They demand custom packaging that adds 4% to fulfillment cost

• They take 75 days to pay (industry standard is 30), that's 45 extra days of working capital you're financing

• They require two of your senior people for account management

• Last year, they returned 8% of their order volume; your average is 2%

Run all of that, and your "best customer" is actually delivering about a 6% net contribution, less than half your blended average. You're working twice as hard for half the profit, and you're underwriting their cash flow.

Meanwhile, three customers in your "B tier" each do $80K, pay in 25 days, take no special service, and return almost nothing. They're delivering 32% net contribution.

Three of them combined match the revenue of your "best" account and produce five times the profit.

Most owners have one of these in their book. Some have several. The reason it's invisible is that we measure customers by revenue, not by contribution. Revenue is what makes you feel important. Contribution is what makes you profitable.

Audit every account. Calculate real per-customer margins. Then have an honest conversation with the bottom 10%: either restructure the terms or quietly redirect your sales efforts to customers who deserve them.

Strategy First! Profit Always!