Are You Charging Enough? The Difference Between Revenue and Real Profit
You can be flat-out busy, but the cash in the bank still isn’t showing up.
That was a central part of a conversation I had with a local small business owner this week. They weren’t short of work, and they certainly weren’t short of customers. But they were worried about a fundamental financial question: are their labour rates and overhead recovery rates actually right?
Because being busy doesn’t automatically mean you’re making enough money.
The Hidden Risk: Working Harder Without Higher Margins
You can be working harder, taking on more jobs, and watching your top-line revenue grow—and still fail to cover the true cost of running your business.
When we dig beneath the surface of a business’s finances, we often find that pricing hasn’t kept pace with inflation, wage increases, or hidden overhead expenses.
To help this business owner get clarity, we started working through the fundamentals:
- Video Walkthrough: I sent a detailed video explaining my practical approach to analyzing pricing and costs.
- Interactive Workbook: They received a tailored workbook as homework to map out their actual numbers.
- Collaborative Review: We are sitting down to analyze what the data actually tells us.
4 Financial Questions Every Business Owner Must Answer
When analyzing whether your pricing structure is truly sustainable, you need to ask:
- Are your labour rates accurate? Do they account for unbillable time, superannuation, leave, and actual productivity?
- Are overheads being fully recovered? Is every billable hour or product margin carrying its fair share of rent, software, utilities, and admin costs?
- Is there enough margin? Are you generating sufficient gross profit to fund future growth?
- Is the business actually making money? Is the work generating genuine net profit or just cash flow velocity?
Key Takeaway: Knowing what you charge isn’t the same as knowing whether it’s enough. Pricing isn’t just a sales or marketing decision—it is a core financial decision.
Access Up to 4 Hours of Free Small Business Advice in NSW
This is exactly the type of financial challenge I help founders and small business owners navigate as an advisor on the Small Business Advisory program in NSW.
If you are an eligible NSW small business owner and want to know whether your pricing, margins, or labour rates are set up for profit, you can access up to 4 hours of fully funded 1:1 advisory sessions with me.
Bring your questions, your numbers, or the financial worries keeping you up at night. Together, we’ll walk through the numbers and build a clear path forward.
Ready to get clarity on your numbers?
Book Your Free 1:1 Advisory Session Here
📌Frequently Asked Questions:
Q: How do I know if my small business is charging enough?
A. You are charging enough when your prices cover direct project costs, absorb all fixed overhead expenses (like rent, software, and insurance), account for unbillable admin time, and leave a clear profit margin. If your top-line revenue is growing but cash flow remains tight, your rates or recovery structures likely need adjustment.
Q: What is an overhead recovery rate?
A: An overhead recovery rate is a method used to distribute fixed operational costs (overheads) across your billable hours, products, or services. Ensuring your overhead recovery rate is accurate prevents hidden business expenses from eroding your profit margins.
Q: Who is eligible for the NSW Small Business Advisory program?
A: The program is designed for small business owners and founders operating in New South Wales. Eligible businesses can access fully funded, 1:1 sessions with certified business advisors to work through financial strategies, cash flow management, pricing models, and business growth.
.
Q: How do 1:1 business advisory sessions work?
A: During a session, we look directly at your financial numbers, pricing structures, or operational challenges. You will receive practical diagnostic guidance, tools (such as walk-through videos and workbooks), and an actionable plan to improve your business’s financial clarity and profitability.
Q: Is there a deadline to access the 4 free hours of advice?
A: Yes. The current phase of the NSW Small Business Advisory program allows eligible business owners to access up to 4 hours of fully funded 1:1 advice until February 2027. Because session availability is capped across the program, it is best to book early to ensure you secure your time before the funding period concludes.
Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably.
Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.
Click on the below buttons to access free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably
And Wayne is always posting about new grants, funding options and other resources on LinkedIn that can help your business scale and grow profitably. Click on the below links and connect with Wayne or follow A Real CFO on LinkedIn.
Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052
