If your revenue looks great but your bank account doesn’t… your profit might be hiding in plain sight. In this guide, I’m breaking down the 5 most common places where small business owners quietly lose profit—and exactly how to fix each one so you can put more money back in your pocket. 💸

You’ll learn:

• The silent expense that’s draining your bottom line
• Why pricing and profit margins need regular checkups
• Where operational leaks go unnoticed (and how to plug them)
• How time and capacity affect profitability (even if you don’t sell hours)
• The #1 mindset shift that brings more money into your business—without hustling harder

This isn’t just about cutting costs—it’s about building a profitable, sustainable business that supports your life and goals.

👉 Create your PROFFIT Plan™ and see where your money should go every month.
👉 Use Relay for smart cash management (multiple accounts, easy automation)
👉 Pre-Order my new book—Hidden Profit for all 8 profit levers (and bonuses)

Place #1: Your Pricing (and the Profit You Forgot to Build In)

Most owners set prices by gut feel or competitor copycatting. But pricing is a formula, not a vibe. If your price doesn’t account for all costs—including the market value of your own time—your profit is leaking before you ever send an invoice.

The Profit-First Pricing Formula (Practical Version)

When you set a price, build it from the ground up:

1. Direct Costs (DC): Materials, contractors tied to the job, packaging, merchant fees.
2. Labor at Market Rate (LMR): What it would cost to pay someone else to do the work (even if that “someone” is you right now).
3. Overhead Allocation (OH): Your monthly fixed costs proportioned to each offer (rent, software, insurance, admin).
4. Target Profit (TP): The owner return for risk, innovation, and growth—not the same as your “pay.”

Price Floor = (DC + LMR + OH) ÷ (1 − Target Profit Margin)

If you can’t price high enough to cover both a fair LMR and a real profit, the offer needs a redesign (scope, audience, delivery model) or it’s not a profitable product.

Pricing Tune-Up: What to Review Quarterly

• Scope creep: Are you delivering more than you priced for? Define deliverables clearly.
• Menu your value: Offer tiered packages (Good/Better/Best). Let clients self-select their budget vs. scope.
• Index to reality: Costs rise—your prices should, too. Review quarterly; adjust at least annually.
• Discount discipline: If you discount, trade for something (faster pay, longer term, reference, batch scheduling).

A Note for Service Providers

If you “can’t afford to hire,” your price is usually the problem. You should be able to:

• Pay a market-rate person to do the work, and
• Pay yourself as an owner (profit), and
• Cover overhead comfortably.

If that math fails, fix the price (or the delivery model) before you fix the hiring.

Place #2: Operating Expenses (Especially Subscriptions)

I’m not anti-expense—I’m anti-unproductive expense. The fastest no-pain profit wins often come from subscriptions and tools that have quietly multiplied.

The 60-Minute Subscription Audit

1. Pull the last 3 months from your bank/credit cards.
2. List every recurring charge (monthly/annual).
3. Tag each K-O-R:
   • Keep (produces revenue or saves serious time)
   • Optimize (downgrade, consolidate, pay annually for a discount)
   • Remove (unused or duplicative)
4. Pause non-critical tools for 30 days and watch for impact. No impact? Cancel.

Cut just $200/month in dead subscriptions = $2,400/year of pure profit.

Vendor Savings Scripts (Use These Today)

• Consolidation Ask: “We’re consolidating tools. If we stay, can you match the annual rate I’m getting elsewhere and include X seats?”
• Downgrade Without Downtime: “We’re not using [feature]. Can we step to the lower tier without losing history?”
• Loyalty Leverage: “We’ve been a customer for 3 years. What loyalty pricing or extra seats can you extend to keep us?”

Make Spending Decisions by ROI

• Keep: Generates or protects revenue, saves high-value time, or mitigates risk.
• Cut: Vanity tools, “maybe someday” software, overlapping features.
• Reinvest: Anything that reliably produces more than it costs.

💡 Pro tip: Banking tools like Relay make subscription visibility simple. Use separate “Operating” and “Opportunity” accounts to see where your money goes and to fund smart reinvestments automatically: https://www.jamietrull.com/relay

Place #3: Taxes (Money You Don’t Need to Be Paying)

You don’t control the tax code—but you do control how you use it. Profit often hides in the difference between “what you owe” and “what you’ve missed.”

Three Big Levers Most Owners Overlook

1. Entity Tax Strategy: Depending on your situation and stage, electing to be taxed as an S Corporation may reduce self-employment taxes on part of your profit (you pay yourself a reasonable salary, then distributions aren’t subject to SE tax). This is not a blanket recommendation—run the numbers with your CPA.
2. Deductions You’re Missing:
   • Home office (proper method for your situation)
   • Cell/internet business portion
   • Mileage or actual auto expenses (choose one)
   • Accountable plan reimbursements (for corporations)
   • Education and professional development tied to your work
   • Software/tools used to deliver or sell your offers
3. Retirement Contributions:
   • Solo 401(k) or SEP-IRA can reduce taxable income today while you pay your future self.
   • Build contributions into your cash plan monthly so you don’t scramble in March.

Build Taxes Into Your Cash Plan

Inside your PROFFIT Plan™, route a fixed % of every deposit into a dedicated Tax account. No year-end panic, no “accidental spending.”

👉 Create your plan and see your Tax % by stage: https://jamietrull.com/PROFFIT

Educational note: Taxes are personal. Always confirm with your CPA which moves fit your specific situation.

Place #4: Under-Investing in Help (The Hidden Cost of “Doing It All”)

“I’ll save money and do it myself” sounds smart—until you realize it’s costing you profit.

The Capacity Math That Changes Everything

• Identify everything you do that could be hired at $20–$30/hour (admin, formatting, scheduling, basic editing).
• Identify what you alone can do that’s worth $150–$300+/hour (sales calls, client strategy, creating premium offers, partnerships, content that converts).

If you spend 10 hours/week on $25 tasks, that’s $250/week saved—but it costs you the chance to do 10 hours of $200 work ($2,000/week potential). The spread—$1,750/week—is your hidden profit.

Make Hiring Financially Safe

• Create an Opportunity Fund and pre-save 1–3 months of the new hire’s pay.
• Write a 90-day scorecard (3–5 outcomes that define success).
• Start part-time. Increase hours as ROI appears.
• Standardize recurring tasks with simple SOPs (screen-record + checklist).

💡 Fund your Opportunity account automatically in Relay so hiring isn’t a cliff jump: https://www.jamietrull.com/relay

Place #5: Inventory & Cost of Goods (Cash Stuck on Shelves)

Product businesses often look profitable on paper while cash is trapped in slow-moving stock or undercounted costs.

Tighten Your Inventory Engine

• Know your numbers:
  • Gross Margin = (Sales − COGS) ÷ Sales
  • Inventory Turnover = COGS ÷ Average Inventory
  • Days Inventory Outstanding (DIO) ≈ 365 ÷ Turnover
• ABC Analysis:
  • A = top 20% SKUs that drive ~80% of revenue—never stock out.
  • B = moderate movers—buy lean.
  • C = slow/seasonal—consider preorders or made-to-order.
• Kill dead stock: Bundle, clearance, gift-with-purchase, or wholesale lots to free cash.
• Track landed cost: Include freight, duties, packaging in COGS to price correctly.
• Improve terms: Ask suppliers for smaller MOQs, split shipments, or net payment terms to align cash timing.

Healthy product profit is a speed game: the faster cash returns from inventory to bank, the more profit you can compound.

Bonus Leak: Receivables & Collection Friction (Get Paid Faster)

Uncollected invoices are profit on pause. If you’re waiting 30–60–90 days to get paid for work you’ve already delivered, your margin is quietly shrinking.

Speed Up Cash—Without Feeling Pushy

• Policy upgrade: Standardize 50% upfront / 50% before delivery for projects or switch to monthly retainers with autopay.
• Invoice instantly and enable ACH/card payments.
• Automated reminders at 3/7/14 days past due (keep them friendly but firm).
• Offer 1–2% net-10 early-pay incentives if it shortens cash cycles meaningfully.
• Add late fees (check state rules) and enforce consistently.
• Review DSO (Days Sales Outstanding) monthly. Improvements here equal pure profit.

Your accounting software likely supports payment links and automated reminders. Make it easy to pay—and hard to forget.

The #1 Mindset Shift: Profit Is a Design Choice, Not a Leftover

If profit only shows up when “there’s something left,” you’ll always feel squeezed. Instead, design your money flow so profit is funded first and your goals get paid on purpose.

That’s exactly what the PROFFIT Plan™ does. You’ll assign every dollar a job with purpose-built “buckets,” such as:

• P—Pay Yourself (your regular owner pay)
• R—Rainy Day/Reserves (stability)
• O—Opportunity (hires, education, advertising, new offers)
• F—Future (debt payoff, retirement)
• F—Fun (motivation matters!)
• I—Impact (giving that aligns with your values)
• T—Taxes (no surprises)

👉 Make your personalized PROFFIT Plan™ now (it takes minutes): https://jamietrull.com/PROFFIT
👉 Use Relay to create the matching bank accounts and auto-sweep percentages so the plan runs without willpower: https://www.jamietrull.com/relay

Quick Wins Checklist (Do These in the Next 7 Days)

• Pricing: Audit your top 3 offers. Rebuild price floors using DC + LMR + OH + TP. Identify one price or scope change to implement.
• Subscriptions: Run the K-O-R audit and cancel/optimize at least two items.
• Taxes: Open a dedicated Tax account and start auto-transferring a % of every deposit.
• Capacity: List 5 tasks you can delegate this month. Post a part-time role with a 90-day scorecard.
• Inventory/AR: Choose one: (a) run ABC and plan a dead-stock clearance, or (b) tighten invoice timing (upfront deposits + automated reminders).

Each small action unlocks compounding profit. String a few together and your cash position changes fast.

Want the Rest of the Levers?

This article covered 5 of the most impactful profit unlocks. In my new book Hidden Profit, I walk you through all 8 profit levers, with worksheets, scripts, and real-world examples you can copy and paste into your business.

If you’re self-employed and looking to maximize your profits, don’t forget about the importance of taxes—check out this helpful guide on filing taxes for self employed to ensure you keep more of what you earn.

📘 Pre-Order Hidden Profit (and grab the pre-order bonuses while they’re available):
https://jamietrull.krtra.com/t/PukGYy6FTilF

Resources Mentioned

• Create your PROFFIT Plan™
• Relay (smart, simple cash management + multiple accounts)
• Hidden Profit Book

This article is for educational purposes only and is not tax, legal, or financial advice. Consult your CPA or advisor about your specific situation.

If you found this helpful, check out The Ultimate Getting Ready for Taxes Bundle for even more tax preparation tips, and bookmark this article.

If you found this helpful, bookmark this article and share with a business friend who’s ready to keep more of what they earn. Your profit is there! You just needed the map.

Transcript: This transcript was generated from the video for your convenience, but it may contain typos or slight errors due to the transcription process. For the most accurate and complete information, we recommend watching the full YouTube video.

Maximizing Profits

Your business is bringing in money, but where’s the profit? If you’ve ever felt like you’re working hard but still not seeing the fruits of your labor, then it may be because of one of these hidden money leaks. So let’s fix that.

Hi everyone. I’m Jamie Trell, your favorite CPA and financial literacy educator. And if you’re not subscribed to this channel right now. I would love it if you would go ahead and press that button. It means a lot to creators like me here on this channel. I’m bringing you all the information to help you stay informed, organized, and profitable in your business finances.

So please come back later and also make sure to stay around to the end of this video because I’m gonna tell you the one thing that most people miss when it comes to finding hidden profit in their business.

Implement Value-Based Pricing

Alright, let’s start with the number one place profit might be hiding in your business. And if you think I’m gonna jump right to expenses, you are not correct, we’ll get there in just a minute. But first I want to start with the money coming into your business. We are gonna talk about pricing now.

Pricing is one of those things I see a lot of memes about, right? Charge your worth and add tax, all these types of things. But at the end of the day, most of us use just our gut or maybe our competitors to come up with what our prices are going to be.

But here’s the thing — pricing is actually a formula. And it’s a formula based on the cost to actually produce the product or service that you’re selling. And when we’re not pricing with a formula in mind, that’s where we end up with profit leaks.

Especially in the case that the inputs — meaning the cost of goods that are going into any physical products you’re making, or perhaps the cost of services that are going into any services that you’re offering, right? The cost of labor, things like that. When those go up and we are not adequately also adjusting our prices for that, that’s how we lose profit.

And that’s what happens in most small businesses over time, right? Costs go up over time, but we’re rarely raising our prices to keep up with that.

And not that we should raise our prices every single time one small input changes. However, we need to have adequate cushion within our pricing that we have plenty of room and we need to be adjusting our prices regularly and analyzing the cost to produce that good or service.

Fixed Costs and the Value of Your Time

And here’s the biggie. The thing we often miss is the value of our own time. Some of you might be saying, I don’t have that many costs. Right. It’s just me and my business. I’m a service-based solopreneur.

Yes, you do. Your cost has a value. And I’m not talking about the value of you as a person or even the value of you to your business. I mean, it has a market value. You could go out and hire someone else to do the work that you are doing. How much would you have to pay them for each of those different tasks? That’s the market value of your job.

And here’s the thing, if you can’t hire someone to take on some of the tasks because you wouldn’t have enough money to pay them, you’re probably not charging enough.

You need to be charging customers not only the same amount of money that you would be paid if you were an employee, because then you might as well just be an employee. You need to be charging customers an amount that covers both your salary as an employee and also the amount of money you should make that covers you as the business owner and the risk that you’re taking on to run the business.

And all the overhead that you have in your business, the costs that you’re incurring — that is where things get hidden, right? Those costs are sometimes hidden because our own salary, especially if you’re not a corporation and paying yourself an actual salary, our own amounts that we pay ourselves doesn’t show up on our profit and loss statement anywhere, so therefore it kind of gets lost in the shuffle.

But we need to assume when we’re setting our prices, we need to think about the market value of the work that we’re doing so that we can someday actually get out of our business.

Maximize Profit with Strategic Pricing

So this is typically what I tell people when they say, I can’t afford to hire. The first thing to look at is your pricing. Are you charging as a business owner, or are you charging as an employee or contractor? Right? Those are different things.

And remember, even if you are a 1099 contractor and you get a 1099 from your employers, you are still a business owner in the eyes of the IRS, and you should treat your business like a business.

And that means making sure you’re building in adequate profit for yourself, and that if you needed to, you could step out of the business someday.

Whew. Okay. All right. That one I get a little bit on my soapbox about because it really is a formula.

That formula isn’t the same for everyone. It is something that I talk about in my new book coming up, which I’ll talk about here in a minute, called Hidden Profit. So that is actually one of the eight different profit levers that I talk about within this book.

We’re only gonna talk about five of them today, but there are actually eight different profit levers that you can pull to help you make more profit in your business.

Increase Revenue by Managing Expenses Wisely

Onto the second place that profit might be hiding in your business. And now we’re gonna talk about expenses.

And no, I’m not talking about all expenses and I don’t want you just going and cutting your expenses willy-nilly because that can very much backfire if you have expenses in your business that are truly investments — in that they are generating you more money than they actually cost.

Right? If you have an employee who bills a hundred thousand dollars in sales, but you pay them $50,000, don’t get rid of that employee to save money. That makes no sense, right?

We know that, but we do that sometimes when we go a little crazy with the cost cutting.

Goods Sold and Subscription Audits

The first place I want you to start though, when we’re looking at operating costs, is with your subscriptions.

Now, I know for my business that’s often software subscriptions, and typically I’m looking at: Are we actually using this? Is this something we actually need? Are we getting value from this? Could we potentially downgrade the package?

Because the reason these things are important to look at is that they really add up over time.

Right, so it may only be like a $40 a month subscription, but you add that up over an entire year and that’s around $500, and then you go multiple years of paying this.

If you’re not using this actively in your business, you could easily be paying thousands of dollars that isn’t going to good use and isn’t providing a return.

So we wanna cut that stuff or we wanna reduce it, or we want to figure out how to aggregate, right? Where might we be able to make better systems so that we can actually save some money?

Maximizing Profit with Cost Reviews

Now, one really good way to do this, and I do this sometimes, is I pause subscriptions. Of course, I tell my team, but I do pause subscriptions to see, hey, does this change anything? Does this cause any issues?

And if not, maybe we didn’t need it to begin with, or maybe we didn’t need to be on that high package.

Now, I typically find this stuff by looking through my profit and loss in my accounting software, or even just going to my business bank account and going through what those recurring charges are.

Some banking platforms like Relay that I use actually tell you what subscriptions you have ongoing. So that can be really helpful to quickly find those subscriptions and cancel them if you need to.

And the great thing is it’s straight profit, right? If you cancel subscriptions worth like $200 a month, that’s $2,400 a year in straight profit to your pocket.

Maximizing Revenue by Reducing Taxes

The third place you might have some hidden money in your business is in your taxes. And specifically, you might be paying more in self-employment taxes than you really need to be.

I talk a good amount on this channel for those of you that have been around, about the difference between being a sole proprietor or an LLC versus being taxed as an S corp.

And that’s not to say that it’s right for everyone or that it is a blanket solution for everyone. However, there does come a time where it can be significantly beneficial and it can potentially significantly decrease your tax bill.

Because there will be a portion of the income that you make that will not have self-employment taxes — i.e., Social Security and Medicare — that will be assessed on it.

Marginal Cost and Tax Efficiency

This is a great thing to look into. Again, there’s not a bright line for when this makes sense. You wanna get an individual look at your finances.

We do have some tools to help with that. If you wanna go check out our free S Corp switch masterclass, that would be a good thing to join.

It’s just jamie troll.com/switch, and you can watch that and get a good idea of whether it makes sense for you to switch to an S corporation.

But that’s not the only way that you’re losing profit due to taxes. You might also be overpaying taxes because you’re missing out on deductions.

Make sure you’re taking things that you might be paying personally as deductions — things like the business portion of your cell phone or your mileage if you drive at all for work.

Right, your home office. I take a portion of my home office and it can get a little bit complicated. So you wanna talk to a CPA about what makes the most sense for you, but ultimately you don’t want to miss those deductions because they can really add up.

And those are typically my two biggest tips for saving on taxes. Make sure you’re getting all of your deductions and look into being taxed as an S corp.

Increase Sales through Smart Investment

The third one that can be really helpful as well is making sure that you’re maxing out your retirement accounts.

I’m not gonna get deep into that here, however, just know that by opening a retirement account and putting pre-tax money in, that’s another great way to keep your money but get a tax benefit out of it.

And speaking of making sure that you are taking all of the deductions that you are entitled to, I do recommend using an accounting software because it can help with this.

So I have a whole roundup of accounting softwares, including special deals that I’ve negotiated on your behalf at jamie troll.com/accounting.

Maximizing Profit through Smart Hiring

Now, one of the other places that profit might be hiding in your business is you might be doing things that make you think you’re saving money, but it’s actually costing you money.

So again, going back to the idea of hiring help or doing other things like that, that can invest in your business. By not doing so, you might actually be missing out on profit.

A lot of times we focus a lot on the cost, but the key to me when I hire help is to make sure that I’ve saved up enough for usually the first one to three months of their salary.

As long as I’ve done that, because it’s probably gonna take a little bit of time before you see a return on investment, especially depending on the type of job you’re hiring for.

Right. If it’s not a direct revenue-generating role it might take a little bit longer, but even admin roles can save you a lot of money because admins can help you make processes more efficient. They can take things off of your plate that allows you to focus on the bigger things that actually drive sales.

So the more that you can get help and really be able to focus in on only the things that you can do, that can actually be a massive generator of profit.

Customer Lifetime Value and Efficiency

So you don’t want to just say no to everything because you’re worried about the cost of it. Sometimes we have to take a little bit of risk to be able to see that return.

So I like to think of it like this: What task could you hire out for $25 an hour that you could make $200 an hour with that time?

And when we start thinking about it like that, it gets a lot easier to make those decisions to outsource things.

So it’s not just about time savings. Hiring isn’t just about saving time for yourself. It is literally a profit motive, right? Like that is the main purpose — to be able to ultimately help your bottom line.

Maximizing Revenue in Inventory Businesses

The fifth thing that might be hidden money in your business is if you’re in an inventory business, then doing things like overstocking that might be creating a situation where you’re tying up a lot of your money in stock that isn’t selling.

So if you don’t have tight controls over inventory, that can really impact your profit.

At the end of the day, you wanna know how fast those things are turning over. You don’t wanna be investing in inventory that isn’t selling because that’s ultimately taking away the profit that you’re making on the inventory that is selling.

And so a lot of physical product businesses feel like all they do is take the profit from the sold product, and then they’re just using it to buy the next product, and they never feel like they can get out of that cycle.

And some of that is just because of inventory management. So really getting your hands around your inventory, making sure that there’s not inventory that isn’t selling and isn’t turning and really getting tight controls can help free up quite a bit of profit for those physical product businesses.

Maximizing Profit through Better Collections

Okay, so I promised you five places that profit is hiding, but I actually have a bonus one, and that bonus place your profit might be hiding is with uncollected invoices.

So if late payments from clients are a thing that you are dealing with or you’re dealing with cashflow timing issues where you need to pay bills before you’ve collected the money from the related clients for those invoices, then that’s causing a cash crunch for you.

If you’re having to wait 30, 60, 90 days to get paid for the work you’ve already done, then that is losing you, not just time, but also money because that’s money you could have reinvested back into the business to be making more money.

So you wanna think about your cash collection processes and sometimes moving them around such that you can move up those collections, making them auto pay, or even billing ahead of when the services are done, depending on your industry, could be an option for you and fix a lot of the cash flow crunch issues we find ourselves in.

And that’s the great thing about using an accounting software to send your invoices because a lot of times they can actually send reminders and things like that. You can actually program all of that in such that your customers are hopefully going to pay you more quickly and you don’t have to remember to constantly be going out there and trying to collect.

Maximizing Profit: Final Thoughts

So I hope that this video was helpful. If you want even more tips and strategies, I go through so much in my new book, Hidden Profit.

It is coming out soon, but if you pre-order, you’re gonna get pre-order bonuses that you will not get after this book hits the shelves. So please go ahead and go pre-order now.

Go to jamietrull.com/hiddenprofit. This has been a labor of love. This is all about teaching you about your finances, finding hidden profit in your business, and then using that hidden profit to create a life of abundance that you love.

So I would love for you to be a part of this movement and, please tell your friends as well. Thanks so much and I’ll see you soon.