Fire 20% of Your Revenue
Not all revenue is worth keeping.
Some jobs look good on the P&L—but behind the scenes, they drain your margin, burn your team, and keep you stuck in the weeds.
In nearly every residential and commercial services business we’ve seen, at least 15–30% of revenue is misaligned:
Labor-intensive
Unpredictable
Low-margin
Slow-paying
Hard to staff
Dependent on the founder
It stays because it’s familiar. It keeps the board full and the trucks moving—but it keeps the business heavy.
What Low-Quality Revenue Looks Like
Revenue quality isn’t about size. It’s about consistency, margin, and transferability.
Here’s what low-quality revenue looks like in the field:
Jobs that require senior techs or the owner to quote
Long travel time with no route density
Work that ties up multiple crews but bills poorly
Customers with slow payment cycles or constant change orders
Weekend or emergency jobs that crush team morale
“One-offs” that break your system
It’s easy to justify these jobs—until you try to grow, step back, or sell. That’s when they start costing you more than they bring in.
Run a Revenue Quality Audit
You don’t need to guess. The data is already in your CRM, field ops system, and financials—you just need to cut it the right way.
Segment your revenue by:
Service line
Customer type (residential vs. commercial)
Gross margin
Tech hours per dollar earned
Payment terms / AR aging
Rework rate
Return customer rate
If you’re not running this quarterly, you’re not scaling. You’re accumulating risk.
Example: One business we worked with cut a $1.2M route that looked good on the board but netted less than 6% margin after labor and rework. The founder freed up two crews, shifted focus to recurring commercial contracts, and lifted EBITDA by over $400K in six months.
Know What You’re Optimizing For
Founders often protect revenue because it feels productive. But volume without margin is friction. And complexity without predictability kills valuation.
Instead, optimize for:
Margin per hour, not revenue per job
Repeatability, not custom quoting
Predictable payment, not backend negotiation
Operational simplicity, not sales wins
Buyers don’t value chaos. They value clean, systemized, transferable revenue—work that doesn’t need the founder, the A-team, or a workaround.
Make the Cut (and Make It Stick)
Once you identify low-quality revenue, cutting it can feel uncomfortable—especially if it involves firing customers, walking away from “big jobs,” or retraining your team to say no.
But operational simplicity is a competitive advantage.
The businesses that grow profitably are the ones that make room for quality.
Execute the shift:
Sunset one service line at a time
Replace with higher-margin contracts you can deliver predictably
Retrain CSRs and sales on what the business wants
Rebuild schedules to reflect profitability—not just utilization
Track margin weekly until it normalizes
This isn’t cost-cutting. It’s value engineering.
Final Thought
Revenue that erodes margin and burns time isn’t revenue worth keeping.
Cutting 20% of your top line can be the most profitable move you make—if it frees up capacity for the part of your business that actually builds value.
We’ve seen it work. Over and over.
Considering a Sale—Now or Years From Now?
The best outcomes start years before a transaction. That’s when the real value is built.
We work with operators looking to scale intelligently, reduce dependency, and create buyer-ready businesses—long before there’s a process.
If you’re thinking 12–36 months ahead, it’s worth a conversation.