Why Your Profit Margin Is Not Greedy (It’s Responsible)
Revenue vs Profit
A lot of my clients are impact-driven founders. They care about people. They care about their teams. They care about their clients. It’s great.
But because they’ve decided that purpose-led means you should undercharge, they often end the year breaking even.
Breaking even is not a badge of honor.
It means you worked all year without building security, and that you’ve absorbed all of the risk in the partnership between you and your clients.
When you break even, there’s no buffer. No cushion. No ability to reinvest. No ability to give back in a meaningful way.
You can’t build an impactful business on fumes.
The Math Nobody Wants to Do
Here’s where people tune out — but stay with me.
Take your hourly rate. Now cut it by your tax burden. That means your “$200/hour” is suddenly $100.
Then factor in operational costs:
Software
Insurance
Equipment
Admin time
Marketing time
Pension
Take the number you spend per year or per month and then break it down to your per-hour number.
Suddenly, that strong, abundant rate doesn’t look so abundant. $200/hour now looks more like $90.
But your profit margin (revenue-expenses/revenue) is 55% which is a very healthy number. As a whole your annual margin should fall in the 20% range to give you security.
But, here’s the kicker: most founders are only billing 10–20 hours a week, once you account for leadership, vision, admin, and internal work, which means although the margin on their rate is healthy, if they are only billing 20 hours per week (or overservicing and going over the estimated hours) they won’t hit that 20% margin at the end of the year.
This is what will quietly starve your own business.
Over-Servicing Is Investing in Someone Else’s Business
This is the part that really makes people uncomfortable.
Every time you over-service a client without charging for it, you are investing your profit margin into their business.
You’re not “being nice.” You are transferring your margin.
And sometimes that’s fine — if it’s intentional. But what I see over and over again is this:
Founder over-services
Founder doesn’t communicate
Founder assumes it will “come out in the wash”
Client pulls the plug
Founder made no money
That’s not generosity. That’s poor boundaries wrapped in good intentions. If you want to invest in a relationship, do it consciously. Communicate it. Put a cap on it. But don’t quietly bleed margin and call it partnership.
Money Is Not Confrontation
If you are in a for-profit business, your clients expect you to make a profit.
They are not shocked or offended by this.
They are not personally wounded by it.
We make it weird because we feel weird about it. But the cleaner your math, the cleaner your conversations.
When you know your hard line — the number that protects your foundation — negotiations become collaborative instead of emotional.
You stop saying:
“I guess I can lower it…”
And you start saying:
“Here’s what we can do at this level. If you want more, here’s the next tier.”
That’s partnership. That’s leadership.
Your Profit Is Structural
Profit isn’t about buying a Porsche.
It’s about:
Paying your team well
Building reserves
Funding innovation
Creating stability
Sleeping at night
It’s about not running your business in quiet scarcity.
And if you’re purpose-led? You need a margin even more. Because the more stable you are, the more impact you can sustain.
Start Here
Sit down for one hour and run the numbers.
Build in:
Taxes
Operational costs
Realistic billable hours
A margin that feels safe
Then draw a hard line.
From there, you can negotiate scope.
You can adjust deliverables.
You can get creative.
But don’t negotiate your foundation.
If you want help walking through the math (and the mindset that comes up when you see it), that’s exactly what I do in strategy sessions.
This isn’t about greed. It’s about responsibility.
Grow from a place of strength.
Jaime Bancroft Gennaro is a strategic business advisor, coach, and fractional COO. She helps business owners realign with their talents and skills to have successful, fulfilling businesses. Schedule a call to get started.
