Marc was brought in as a new CEO after a decades long stint elsewhere as CFO.
He was sharp, tough, and came with a mandate: “Get margins up fast.”
So he did what many CFOs do.
Started cutting.
- Ad spend.
- Team bonuses.
- Customer experience costs.
- New product development.
- Partnership incentives.
All the “non-essential” stuff.
Margins jumped 12% in 3 months.
Marc was thrilled.
But here’s what happened over the next 9 months:
- Sales flattened
- Team morale tanked
- New referrals dried up
- Churn quietly doubled
- CAC started climbing
- Retention fell 22%
- Revenue took a slow, painful nosedive
And when Marc took the business to market?
Buyers laughed.
Because while margin had improved on paper…
They could smell the rot.
- Flat or declining topline?
- Weak team sentiment?
- Dried-up pipeline?
- No clear growth levers?
The original offer projections were in the $6–8M range.
Final offer on the table?
$2.8M — with 50% in earnout.
Here’s the math no one tells you:
Cutting $1 to save $0.20 in margin can actually cost you in this case $5–10 in enterprise value
If it kills growth, customer love, or team performance
You don’t cut the golden goose.
You feed it.
You protect it.
You make sure it’s laying daily before you worry about trimming fat.
Want a better way to boost your margin without killing long-term value?
Here’s where to start:
- List your top 5 “variable” costs that scare you
- Rank them by what drives customer retention, referral, or team morale
- Cut only what doesn’t impact those
Or better yet — ask:
What are the 2–3 “investments” I’ve been calling expenses… that are actually protecting my golden goose?
The best founders don’t save their way to value.
They spend smarter to scale faster.
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P.S. I’m not the “systems guy,” “process guy,” or “finance guy.”
I’m the “build a valuable business” guy—so you can regain the freedom to start living your best life now and exit on your own terms later.
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