May 28, 2025 • 27 mins
**Is your seven-figure business becoming a gilded cage?**
In this eye-opening episode, we tackle the rarely discussed reality that many million-dollar business owners are working harder than ever while taking home less than they deserve.
We share the powerful story of Sam, whose $1.8 million software company had become a prison of 70-hour workweeks and shrinking profits, and how he transformed it using the Profitability Pyramid framework.
Discover the three critical shifts that can transform a "successful on paper" business into one that actually creates freedom and wealth:
1. Service Portfolio Optimization: Eliminating offerings that create complexity without profit
2. Team Realignment: Restructuring around "Value Streams" that reduce owner dependency
3. Owner Economy Restructuring: Ensuring the business serves your financial goals first
Key Quote: "The reality is that complexity is rarely a strategic advantage. More often, it's the accumulated result of tactical decisions made without a cohesive framework."
Listen now to learn how entrepreneurs like Sam are doubling their profits while cutting their work hours in half, and why strategic simplification creates more value than unfocused expansion.
Plus, get our bonus "Profitability Pyramid Blueprint" by joining the Wealth Wisdom Financial Community as a Premium Member. www.wealthwisdomfp.com/community
00:00 Introduction: The Seven-Figure Struggle
00:49 Welcome to Wealth Wisdom Financial Podcast
01:28 Theme of the Month: Growth and Scaling
01:47 The Seven-Figure Struggle: Sam's Story
04:24 The Profitability Pyramid: Service Portfolio Optimization
07:12 The Profitability Pyramid: Team Realignment
09:48 The Profitability Pyramid: Owner Economy Restructuring
15:10 Case Studies: Overcoming Common Objections
21:36 Conclusion: Transforming Your Business
25:10 Join the Wealth Wisdom Financial Community
26:26 Closing Remarks and Disclaimer
Watch on Youtube: https://youtu.be/ufleOptUfaw
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
Has your 7 figure business become a
gilded cage?Today
we're tackling the rarely discussed
reality that most $1,000,000 business
owners are working harder
than ever while taking home less.
Than they deserve. This happens a lot.
Stay tuned to discover how to transform
(00:24):
your successful on paper business into
one that actually creates freedom and
wealth in your life.
In a world where chaos seems to reign
supreme, where uncertainty lurks
around every corner and financial
markets are now more unpredictable than
(00:44):
ever. There's one place you can turn to
to find clarity and control.
Welcome to the Wealth Wisdom Financial
Podcast. Hey, I'm Brandon. And I'm
Amanda. Join us as we dive deep in the
world of personal and business finance
to assist you in navigating through the
chaos and building the financial future
you deserve. We believe when conventional
(01:07):
financial thinking doesn't get you where
you want to go, you need wealth wisdom.
So if you're ready to take control of
your financial destiny. Tune into the
Wealth Wisdom Financial Podcast because
in a chaotic world, your money shouldn't
be. Subscribe now and never miss an
episode.
(01:28):
OK, welcome to this month's theme, Growth
and Scaling. This is our final episode in
the series about breaking through
barriers and building sustainable wealth.
We're passionate about helping
entrepreneurs and business owners create
businesses that generate true financial
freedom, not just impressive revenue
numbers. Big difference there. Yep. Today
we're focusing on why hitting 7 figures
(01:50):
often doesn't feel like you've gotten the
success that you imagined and how to
change that. I feel like I've built
myself a prison, Sam confessed
during one of our first meetings. His
software company had hit 1.8
million in revenue, but he was working
70 hours weeks and taking home
less than
(02:11):
150,000. Less than
many of his employees actually did,
despite impressive top line growth.
That's what they say on YouTube and
TikTok. His profit margins
had shrunk from 30% to 12%
as the business scaled. We're landing
bigger clients than ever, but somehow
(02:32):
making less money. Of 20
people depending on me for their
livelihoods. And some days I
fantasize about shutting the whole thing
down and getting a regular job. I
know there's some people that as you're
listening, you're like. That's me. Yeah,
that was Sam. Yeah, that was Sam. Yeah,
and if this sounds familiar, you're not
alone. We've worked with dozens of seven
(02:53):
figure business owners who reached out
and they were saying, I feel like I
hit a milestone of success only to find
that I'm trapped on what we've come to
call the seven figure struggle. More
revenue, more responsibilities, more
complexity, but less profit, less
freedom, and less fulfillment. The dirty
secret of business growth, the inside
(03:16):
baseball, you ready for this?Revenue
doesn't automatically translate into
wealth or well-being. In fact,
without the right systems and mindset,
growth can actually decrease your quality
of life instead of enhancing it. The path
from seven-figure struggle to genuine
prosperity isn't about working harder or
growing faster, it's about transforming
(03:38):
the fundamental structure of your
business. This isn't just tweaking your
marketing or hiring another employee.
It's about completely reimagining how
your business operates and creates value.
Sam was experiencing the first
critical challenge of the seven figure
struggle, complexity creep. As the
(03:58):
business grew, he'd added layers
of cost,processes and
services without a strategic
framework. Each edition seemed
necessary in the moment, but
collectively they've created a
bloated operation that diluted
profits and drained his energy.
(04:19):
The solution wasn't more growth, it was
strategic simplification. Sam
implemented what we call profitability
pyramid, a three-step process to
restructure a seven figure business for
maximum profit and owner's
freedom. No, I'm not an architect, but I
think I've heard somewhere that the most
(04:40):
powerful, um, structure
in architecture is a triangle.
three, right?Like the pyramid is based on
three, a three-legged stool is actually
stronger than a four-legged one, right?So
these are what we believe are the three
like sides to the triangle or three
things that build strength within a
(05:00):
business that actually strengthens
wellbeing and wealth for the business
owner too, okay?So the first one is
service portfolio optimization. What
is this?Well, Sam had fallen into a
common trap, saying yes to every client
requests and gradually expanding the
serviceOfferings until the business
lacked clear focus. His team was
stretched across nine different surface
(05:21):
top lines, most of which required
constant reinvention and customization,
right?The world's changing faster than it
ever has before, and they had to keep
doing that with nine different service
lines. Sam conducted a comprehensive
profit analysis of each service offering
over the previous 18 months, not just,
you know, three months or six months, but
18 months of data, and the results were
(05:42):
eye-opening. Three of his nine service
lines generated 78% of the
company's profit, while the remaining six
created endless complexity for minimal
return. These weren't just the
least profitable service. They were also
the ones that caused the most stress,
required the most managerial
(06:03):
oversight, and generated the most
client complaints. He made the
difficult but transformative decision
to eliminate four service lines
entirely and significantly
restructure the other two low
performers. This wasn't just about
cutting it, it was about strategic
(06:24):
focus. Within 60 days of this
simplification, something remarkable
happened. Revenue temporarily
dropped by about 15%,
but profits increased by 34.
Wait, wait, waitRevenue went down, but
profits increased?Yeah. Oh,
interesting. I wonder how. Maybe, maybe I
(06:44):
don't know. Well, we're talking about
how. The team had more bandwidth to
deliver excellence in the core services.
Client satisfaction scores improved, and
perhaps most importantly, Sam's working
hours dropped from 70 to
50 hours without any negative impact. He
was still working a little lot, a little
much, but Sam was just getting started.
(07:05):
This was just the first side of the
triangle, right?The service portfolio
optimization next was.
Team realignment. Like many seven
figure business owners, Sam had built his
team reactively rather than
strategically. As the business grew, he
hired to address immediate needs without
a clear organizational design. The result
(07:27):
was a fragmented team structure with
unclear responsibilities, excessive
meetings, and constant bottlenecks that
required intervention. So he
implemented a complete team
restructuring. He didn't have to lay
anybody off. But he did this
around what we call value streams, clear
pathways of work that deliver specific
client outcomes. And then he was able to
(07:49):
align his team around them, see where
there were crossovers with them, where a
team member could help on multiple teams,
where teams needed to be in different
places. So instead of traditional
apartments, Sam's team was
reorganized into three cross-sectional
units, each fully responsible for
delivering one of the core service
offerings from start to finish. Yeah, I
(08:10):
also think with him, he started figuring
out that who, not how, putting the right
people in the right seats and not
just saying, oh, well, I hired my family
members, so they're going to be here or
there. He may have restructured where
they were at in in the the business,
right?Each value stream
had designated leadership, clear metrics
(08:32):
for success, and most importantly, the
authority to make decisions without Sam's
constantinvolvement. This wasn't
just a restructuring of responsibilities,
it was a fundamental shift in how work
flowed through the organization.
The impact was dramatic. Decision
velocity increased by over 40%.
(08:54):
Projects were completed on an average of
seven days faster. Client issues
were resolved more quickly and
efficiently because the team had both the
knowledge and authority to address them
immediately. And Sam, his role
transformed from day-to-day operations to
strategic leader. His director
(09:16):
reports decreased from 12 to four.
His emergency interventions dropped
by 85% for the first time in years.
He could take a week off without a
single work call. I mean, I think that,
you know, you can forget all the other
stuff. He was able to, to take a week off
and not worry that the business was
(09:37):
gonna, you know,fall apart. Yeah.
Okay, so we've got two sides now. We've
got the figuring out what actually is
working in the service lines,
restructuring the team. Now,
the most powerful transformation comes
with the third one, owner economy
restructuring. What does that mean?Well,
this is where we address a painful truth.
(09:59):
Many seven-figure business owners have
built companies that enrich everyone but
themselves. They pay competitive salaries
to their team. They deliver great value
to their clients. They treat their own
compensation, though, as an afterthought.
Whatever happens to be leftover when
everyone else is paid. And then they
reinvest everything over and over and
(10:20):
over again and and say it'll happen
eventually. Sam was the lowest paid
member of his leadership team on a
per hour basis. His personal financial
security was actually decreasing as the
business grew, creating
subconscious resistance to further
scaling. His company redesigned
(10:40):
his personal compensation structure based
on three core principles. So I don't want
you to miss this. Because Sam
was focused on everyone else and maybe
like hoping I'll sell the business one
day, right?And maybe make some money then
hoping a dream and a prayer, right?Which
had like lots of businesses that try to
sell don't, right?It's very small, less
than half. I think it's like a third
(11:02):
business. It's maybe even less. So then
as the business grew, his personal
financial security actually decreased. He
was getting less and less financially
secure, you know counting more and
more on that hope, dream, and prayer that
one day the business would sell. So
here's what we did. First, we put his
owner compensation first. Sam
(11:22):
would now receive a substantial base
salary, competitive of what he would earn
as an executive in someone else's
company, paid before other expenses.
Second,We put profit,
actually, even before owner's
compensation. Instead of hoping for
leftover profit at year end, the profit
would automatically be distributed to Sam
quarterly. This wasn't a bonus or a
(11:45):
dividend. It was a structural commitment
to his financial prosperity, his reward
for all the risk he was taking in his
business. And then third,
we helped him then start to create wealth
beyond his income. We created a
systematic process for the business to
fund Sam's long-term investments and
wealth building vehicles every single
(12:05):
month, regardless of cash flow
fluctuations. And this wasn't about
greed or taking value from others. It was
about creating alignment between the
business success and its founder's
well-being. When Sam's financial security
was guaranteed by design rather than by
accident, something unexpected
(12:26):
happened. He became more generous, more
strategic, and more committed to the
company's long-term success. So the
company grew. Yeah, because now when the
company grew, his well-being and wealth
grew too. And within 10 months of
implementing the three sides of the
triangle here and implementing these ways
that he would make sure he was paid
(12:47):
accurately and on time and everything,
Sam's business had dramatically
transformed. Revenue had grown modestly
to 2.1 million, but profit had more than
tripled. His team is more autonomous and
effective than ever before, reporting way
more satisfaction in their jobs during
their performance reviews. And most
importantly, his personal income had
(13:08):
increased by 127% while
his working hours had decreased by 40%.
For the first time, he told
me, I feel like my business is working
for me instead of the other way around.
We're more focused, more profitable, and
happier than we've ever been. You might
already be thinking, but me and my
business are different. It's not going to
(13:30):
happen with me. Stay tuned after the
break for the alternative perspective.
Ready to take the next step towards
securing your financial future?Whether
you're planning for retirement, saving
(13:50):
for your dream home, or you just want to
make your money work harder for you. The
team at Wealth Wisdom Financial are ready
to assist you, and now it's easier than
ever to see how we might give you a boost
on your financial journey. Schedule a 15
minute discovery call with one of us
today and let's discuss your questions
and your financial goals together. Don't
(14:10):
wait any longer. Your financial freedom
awaits. Schedule your discovery call at
www.wealthwisdomfp.com/call.
Now I know what some of you are thinking.
I heard these concerns from Sam and
(14:30):
from many other seven-figure business
owners. I can't afford to cut
services or clients. We need that revenue
to cover our overhead.
My team expects me to be involved in
everything. They'll resist any attempt to
change that. My business
is too complex to simplify.
(14:52):
That might work for others, but our
situation is unique because you know
you're a unicorn. These concerns
feel completely valid when you're in the
middle of the seven-figure struggle, but
they're based on assumptions that deserve
closer examination. First, let's
talk about Melissa. Melissa ran a
(15:12):
marketing agency that had hit $2.3
million in revenue, but was barely
breaking even. When I suggested she
eliminate her three least profitable
service lines, she was adamant. But those
services bring in almost 800,000 in
revenue. We need that to cover our office
lease and team salaries. But when we
analyzed the true economics, we
(15:32):
discovered something startling. Those
services required so much specialized
staff, technology and management
attention that they actually cost more to
deliver than the revenue they generated.
They weren't supporting the business,
they were actually draining it. When
Melissa finally made the difficult
decision to sunset those services and
focus on her core offerings, something
(15:54):
unexpected happened. Her revenue
initially dropped to 1.6 million,
$500,000 drop, but her profit
increased from near 0 to
over $400,000 annually. The
business became dramatically simpler to
operate, and within 18 months, focused
growth in her core services had brought
revenue back up to just under 100,000
(16:16):
from where it was before. with a healthy
profit margin of 25% when it was zero.
Yeah, and I wonder, like those TikTok
videos, right?Um, what would they have
said?But what I think is her
personal health and well-being is more
important than whatever video is out
there that's saying, well, you you need
to be on that treadmill longer, right?
(16:39):
UmLet's talk about the next one, team
resistance. As for team resistance, I
understand this. fear deeply
when David, a technology
consultant whose firm had grown to
3.4 million, began restructuring
his team for more autonomy. He
encountered initial skepticism and
pushback. C told me they want
(17:01):
me to be involved in everything. They
won't work here if I don't do this.
But he discovered that the team's
resistance wasn't to autonomy itself.
It was to the unclear expectations
and incomplete systems that made
team members feel set up to
(17:21):
fail. Once he established clear
decision frameworks, documented key
processes, and created appropriate
support structures, something remarkable
happened. The team didn't just accept the
new autonomy, they embraced it
enthusiastically. Six months later,
one of David's initial
(17:42):
skeptical team members told him, I was
afraid you were abandoning us. Now we
realized you were finally trusting us.
That's huge. Yeah, this is, you can kind
of, a good parallel here is parenting.
When you're raising a kid, if you tell
them you want them to become more
autonomous, make their own decisions,
right?Get dressed to themselves. If you
(18:04):
just say go get dressed and you don't
provide any guidance or, you know,
things like that, they feel like you're
abandoning them and now they have to
figure this out and they're lost and
confused. I found it's been way easier as
a parent to break that down into,
OK, go pick out what you're going to
wear. Now, you know, OK, let's talk about
what you've just, you know, picked out,
(18:26):
OK?Or being more specific, pick out
a short sleeves because it's going to be
hot today. Don't wear long sleeves and,
you know, and kind of going from there or
put on the clothes I already laid out for
you last night, things like that, where
they know exactly what to do
and what success looks like, right?A lot
of the times we try to pass things on to
our team, but if we don't tell them what
(18:46):
to do and what success looks like, they
feel lost and abandoned rather than
empowered. So good good double thing
there. Okay, now let's talk about the my
business is just too complex objection.
This is perhaps the most common
resistance that we hear, and I remember
Elena, who ran a specialized consulting
firm that had grown to 4.1 million
(19:07):
through relentless customization for each
client. Our entire value proposition is
based on complexity, she insisted. Each
client engagement is completely unique.
We can't simplify without destroying what
makes US special. It's the complexity
that makes us different. But we examined
our operations closely. We discovered
that beneath the apparent uniqueness were
(19:28):
consistent patterns and repeatable
elements. The fundamental value wasn't in
reinventing the wheel each time, it was
about applying proven expertise to
specific client context. By
identifying these underlying patterns and
creating flexible frameworks rather than
rigid standardization, right?She didn't
want to become like the assembly line.
(19:48):
She still wanted to, you know, customize,
be bespoke, right?That was a superpower
for her. But she could still have these
flexible frameworks that would save lots
of time. And it dramatically simplified
her operations without sacrificing that
customization her clients valued.
Delivery time decreased by 30%, profit
margins increased from 14 to 29%.
(20:08):
And perhaps most tellingly, client
satisfaction scores actually improved
because the quality became more
consistent. The reality is this.
Complexity is rarely a strategic
advantage. More often, it's the
accumulated results of tactical decisions
made without a cohesive framework. And
(20:28):
it's the primary reason so many
seven-figure businesses struggle with
profitability and owner freedom.
Simplicity, focus, and strategic
decision aren't just nice to have
luxuries for when your business is
larger or more stable. They're the
essential foundation that makes
sustainable growth and profitability
(20:50):
possible in the 1st place. And how do you
decide how you're going to simplify,
where you're going to focus, how you're
going to be strategic about the decisions
that you make?you gotta look at the
numbers, you gotta understand the
numbers, right?All the things that we,
you know people think we're just finance,
but it's actually the finance that
empowers the marketing, the customer
service, the growth. I I think about that
(21:10):
a lot as as people are talking to us,
they're like, well, you just do this or
that. I'm like, as a profit first
professional, we're not just thinking
about how you're profitable,
we're thinking about the systems and all
the other stuff that go into it. And
sometimes even though you bought a good
marketing system,Maybe it needs to
be shut down or changed and we can
(21:33):
just see what the numbers say. Yeah, you
got to follow the numbers. So let's talk
about where Sam is today. After following
all those numbers, just 24 months after,
you know, talking about those three sides
of the profitability pyramid, his
business has grown to 4.3 million in
annual revenue, more than double its
original size. But the true
transformation is in the quality of that
growth. Profit margins have stabilized
(21:54):
at 26%, creating over
1.1 million in annual
profit. What $4.3 million business can
say that, right?His team has expanded
from 20 to 28 people, all aligned with
their value stream structure that
allows them to operate with minimal owner
involvement. And most importantly, Sam
now works just 35 hours a week, half of
(22:16):
his previous schedule. He takes a full
month off each year, completely
disconnected from the business. And his
personal income has increased over 300%,
three times from where we started, when
he was the lowest paid employee on the
leadership team. And for the first time,
he's systematically building wealth
outside of his business. He told us
recently, Two years ago, I was
(22:37):
considering shutting everything down.
Now I can't imagine doing anything else.
The business energizes me instead of
depleting me. This transformation
isn't unique to Sam. I've seen it happen
with business owners across industries,
from creative agencies to manufacturing
companies, from professional services to
(22:57):
e-commerce brands. This specific
applications vary, of course, but the
principles remain constant.
Strategic simplification that creates
more value than unfocused expansion.
Structural alignment builds teams
that can operate independently. And
intentional owner economics
(23:17):
ensures that businesses serves your life,
not the other way around. So those three
things are parts of the triangle. Yeah,
so if you're currently experiencing the
seven figure struggle, working harder
than ever while seeing less personal
benefit, know that it does not have to be
this way. Your business can be both
highly profitable and lifestyle friendly.
(23:38):
You can have both growth and freedom. You
can build wealth while building a
company, but this won't happen by
accident. It requires deliberate
restructuring and a willingness to
change the growth at all costs
mentality that dominate
entrepreneurial culture like that. That
is said all the time. So start by
(23:59):
conducting your own profitability audit.
Look beyond top-line revenue to
understand where your true profit is
coming from, and you'll likely discover
that a small subset of your services or
products generates the majority of your
profit, while others create complexity
without corresponding returns. Next,
assess your own relationship with your
business. Are you the bottleneck for
(24:21):
decisions?Do team members depend on
your input for routine matters?
Document where your time goes for one
week, and you'll likely find patterns
of involvement that could be systematized
or delegated. So finally, examine your
personal compensation structure. Are you
paying yourself first or taking
(24:41):
whatever's left over?Are you building
wealth beyond your business, or is
everything tied up in the company's
future and a wish, a hope, and a dream?
Those small shifts in these areas can
create dynamic improvements in both
business performanceand quality of life.
You don't have to choose between success
and sanity. With the right structure, you
(25:02):
can have both. Are you ready to
transform your seven-figure business from
a demanding obligation into a
wealth-creating asset?Well, then join the
Wealth Wisdom Financial Community. Today,
we've shared a framework called the
Profit Pyramid Blueprint. All
those blueprints. Yeah, the exact system
that entrepreneurs like the ones we've
(25:23):
talked about today use to double their
profits while having their working hours.
Even if their revenues went down, their
profits were going up. To get this
framework, you just have to join the
Wealth Wisdom Financial Community as a
premium member at
wealthwisdomfp.com/community.
It could be the turning point for your
business journey, just like it was for
Sam. And if you don't know, we share
(25:43):
wealth building tools every Wednesday in
the Wealth Wisdom Financial Community. If
you want to learn more, go to
wealthwisdomfp.com/community.
And if you'd like to talk with one of us,
like seriously, we love talking about
this. We love serving our
clients and helping them break through.
in smart, stable financial ways, go to
(26:05):
wealthwisdomfp.com/call
and just put in the notes, Hey, I wanna
talk about that podcast episode that you
mentioned, and we'll go from there, but,
but put in the notes, uh, that you wanna
talk about the pyramid or that
you've been listening to the most recent
episodes at
wealthwisdomfp.com/call.
(26:27):
Thanks for joining us. Hit that subscribe
button. Next month's theme is set to be
future-proofing. We can't wait to talk
about AI and more. We hope you live
long and profit. AI. Wow. Yeah, we're
gonna go there. Is there AI?Is there?What
is that?Oh my goodness. The stories in
today's episode are based on real life,
but just like Law and Order, they are
(26:48):
fictional. Dun, dun, dun. Dun, dun. Yeah,
fictional and do not depict any actual
person or event. The topics presented in
this podcast are also for general
information only and not for the purposes
of providing legal, accounting, or
investment advice. On such matters,
please consult a professional who knows
your specific situation.
Has your 7 figure business become a
gilded cage?Today
we're tackling the rarely discussed
reality that most $1,000,000 business
owners are working harder
than ever while taking home less.
Than they deserve. This happens a lot.
Stay tuned to discover how to transform
(00:24):
your successful on paper business into
one that actually creates freedom and
wealth in your life.
In a world where chaos seems to reign
supreme, where uncertainty lurks
around every corner and financial
markets are now more unpredictable than
(00:44):
ever. There's one place you can turn to
to find clarity and control.
Welcome to the Wealth Wisdom Financial
Podcast. Hey, I'm Brandon. And I'm
Amanda. Join us as we dive deep in the
world of personal and business finance
to assist you in navigating through the
chaos and building the financial future
you deserve. We believe when conventional
(01:07):
financial thinking doesn't get you where
you want to go, you need wealth wisdom.
So if you're ready to take control of
your financial destiny. Tune into the
Wealth Wisdom Financial Podcast because
in a chaotic world, your money shouldn't
be. Subscribe now and never miss an
episode.
(01:28):
OK, welcome to this month's theme, Growth
and Scaling. This is our final episode in
the series about breaking through
barriers and building sustainable wealth.
We're passionate about helping
entrepreneurs and business owners create
businesses that generate true financial
freedom, not just impressive revenue
numbers. Big difference there. Yep. Today
we're focusing on why hitting 7 figures
(01:50):
often doesn't feel like you've gotten the
success that you imagined and how to
change that. I feel like I've built
myself a prison, Sam confessed
during one of our first meetings. His
software company had hit 1.8
million in revenue, but he was working
70 hours weeks and taking home
less than
(02:11):
150,000. Less than
many of his employees actually did,
despite impressive top line growth.
That's what they say on YouTube and
TikTok. His profit margins
had shrunk from 30% to 12%
as the business scaled. We're landing
bigger clients than ever, but somehow
(02:32):
making less money. Of 20
people depending on me for their
livelihoods. And some days I
fantasize about shutting the whole thing
down and getting a regular job. I
know there's some people that as you're
listening, you're like. That's me. Yeah,
that was Sam. Yeah, that was Sam. Yeah,
and if this sounds familiar, you're not
alone. We've worked with dozens of seven
(02:53):
figure business owners who reached out
and they were saying, I feel like I
hit a milestone of success only to find
that I'm trapped on what we've come to
call the seven figure struggle. More
revenue, more responsibilities, more
complexity, but less profit, less
freedom, and less fulfillment. The dirty
secret of business growth, the inside
(03:16):
baseball, you ready for this?Revenue
doesn't automatically translate into
wealth or well-being. In fact,
without the right systems and mindset,
growth can actually decrease your quality
of life instead of enhancing it. The path
from seven-figure struggle to genuine
prosperity isn't about working harder or
growing faster, it's about transforming
(03:38):
the fundamental structure of your
business. This isn't just tweaking your
marketing or hiring another employee.
It's about completely reimagining how
your business operates and creates value.
Sam was experiencing the first
critical challenge of the seven figure
struggle, complexity creep. As the
(03:58):
business grew, he'd added layers
of cost,processes and
services without a strategic
framework. Each edition seemed
necessary in the moment, but
collectively they've created a
bloated operation that diluted
profits and drained his energy.
(04:19):
The solution wasn't more growth, it was
strategic simplification. Sam
implemented what we call profitability
pyramid, a three-step process to
restructure a seven figure business for
maximum profit and owner's
freedom. No, I'm not an architect, but I
think I've heard somewhere that the most
(04:40):
powerful, um, structure
in architecture is a triangle.
three, right?Like the pyramid is based on
three, a three-legged stool is actually
stronger than a four-legged one, right?So
these are what we believe are the three
like sides to the triangle or three
things that build strength within a
(05:00):
business that actually strengthens
wellbeing and wealth for the business
owner too, okay?So the first one is
service portfolio optimization. What
is this?Well, Sam had fallen into a
common trap, saying yes to every client
requests and gradually expanding the
serviceOfferings until the business
lacked clear focus. His team was
stretched across nine different surface
(05:21):
top lines, most of which required
constant reinvention and customization,
right?The world's changing faster than it
ever has before, and they had to keep
doing that with nine different service
lines. Sam conducted a comprehensive
profit analysis of each service offering
over the previous 18 months, not just,
you know, three months or six months, but
18 months of data, and the results were
(05:42):
eye-opening. Three of his nine service
lines generated 78% of the
company's profit, while the remaining six
created endless complexity for minimal
return. These weren't just the
least profitable service. They were also
the ones that caused the most stress,
required the most managerial
(06:03):
oversight, and generated the most
client complaints. He made the
difficult but transformative decision
to eliminate four service lines
entirely and significantly
restructure the other two low
performers. This wasn't just about
cutting it, it was about strategic
(06:24):
focus. Within 60 days of this
simplification, something remarkable
happened. Revenue temporarily
dropped by about 15%,
but profits increased by 34.
Wait, wait, waitRevenue went down, but
profits increased?Yeah. Oh,
interesting. I wonder how. Maybe, maybe I
(06:44):
don't know. Well, we're talking about
how. The team had more bandwidth to
deliver excellence in the core services.
Client satisfaction scores improved, and
perhaps most importantly, Sam's working
hours dropped from 70 to
50 hours without any negative impact. He
was still working a little lot, a little
much, but Sam was just getting started.
(07:05):
This was just the first side of the
triangle, right?The service portfolio
optimization next was.
Team realignment. Like many seven
figure business owners, Sam had built his
team reactively rather than
strategically. As the business grew, he
hired to address immediate needs without
a clear organizational design. The result
(07:27):
was a fragmented team structure with
unclear responsibilities, excessive
meetings, and constant bottlenecks that
required intervention. So he
implemented a complete team
restructuring. He didn't have to lay
anybody off. But he did this
around what we call value streams, clear
pathways of work that deliver specific
client outcomes. And then he was able to
(07:49):
align his team around them, see where
there were crossovers with them, where a
team member could help on multiple teams,
where teams needed to be in different
places. So instead of traditional
apartments, Sam's team was
reorganized into three cross-sectional
units, each fully responsible for
delivering one of the core service
offerings from start to finish. Yeah, I
(08:10):
also think with him, he started figuring
out that who, not how, putting the right
people in the right seats and not
just saying, oh, well, I hired my family
members, so they're going to be here or
there. He may have restructured where
they were at in in the the business,
right?Each value stream
had designated leadership, clear metrics
(08:32):
for success, and most importantly, the
authority to make decisions without Sam's
constantinvolvement. This wasn't
just a restructuring of responsibilities,
it was a fundamental shift in how work
flowed through the organization.
The impact was dramatic. Decision
velocity increased by over 40%.
(08:54):
Projects were completed on an average of
seven days faster. Client issues
were resolved more quickly and
efficiently because the team had both the
knowledge and authority to address them
immediately. And Sam, his role
transformed from day-to-day operations to
strategic leader. His director
(09:16):
reports decreased from 12 to four.
His emergency interventions dropped
by 85% for the first time in years.
He could take a week off without a
single work call. I mean, I think that,
you know, you can forget all the other
stuff. He was able to, to take a week off
and not worry that the business was
(09:37):
gonna, you know,fall apart. Yeah.
Okay, so we've got two sides now. We've
got the figuring out what actually is
working in the service lines,
restructuring the team. Now,
the most powerful transformation comes
with the third one, owner economy
restructuring. What does that mean?Well,
this is where we address a painful truth.
(09:59):
Many seven-figure business owners have
built companies that enrich everyone but
themselves. They pay competitive salaries
to their team. They deliver great value
to their clients. They treat their own
compensation, though, as an afterthought.
Whatever happens to be leftover when
everyone else is paid. And then they
reinvest everything over and over and
(10:20):
over again and and say it'll happen
eventually. Sam was the lowest paid
member of his leadership team on a
per hour basis. His personal financial
security was actually decreasing as the
business grew, creating
subconscious resistance to further
scaling. His company redesigned
(10:40):
his personal compensation structure based
on three core principles. So I don't want
you to miss this. Because Sam
was focused on everyone else and maybe
like hoping I'll sell the business one
day, right?And maybe make some money then
hoping a dream and a prayer, right?Which
had like lots of businesses that try to
sell don't, right?It's very small, less
than half. I think it's like a third
(11:02):
business. It's maybe even less. So then
as the business grew, his personal
financial security actually decreased. He
was getting less and less financially
secure, you know counting more and
more on that hope, dream, and prayer that
one day the business would sell. So
here's what we did. First, we put his
owner compensation first. Sam
(11:22):
would now receive a substantial base
salary, competitive of what he would earn
as an executive in someone else's
company, paid before other expenses.
Second,We put profit,
actually, even before owner's
compensation. Instead of hoping for
leftover profit at year end, the profit
would automatically be distributed to Sam
quarterly. This wasn't a bonus or a
(11:45):
dividend. It was a structural commitment
to his financial prosperity, his reward
for all the risk he was taking in his
business. And then third,
we helped him then start to create wealth
beyond his income. We created a
systematic process for the business to
fund Sam's long-term investments and
wealth building vehicles every single
(12:05):
month, regardless of cash flow
fluctuations. And this wasn't about
greed or taking value from others. It was
about creating alignment between the
business success and its founder's
well-being. When Sam's financial security
was guaranteed by design rather than by
accident, something unexpected
(12:26):
happened. He became more generous, more
strategic, and more committed to the
company's long-term success. So the
company grew. Yeah, because now when the
company grew, his well-being and wealth
grew too. And within 10 months of
implementing the three sides of the
triangle here and implementing these ways
that he would make sure he was paid
(12:47):
accurately and on time and everything,
Sam's business had dramatically
transformed. Revenue had grown modestly
to 2.1 million, but profit had more than
tripled. His team is more autonomous and
effective than ever before, reporting way
more satisfaction in their jobs during
their performance reviews. And most
importantly, his personal income had
(13:08):
increased by 127% while
his working hours had decreased by 40%.
For the first time, he told
me, I feel like my business is working
for me instead of the other way around.
We're more focused, more profitable, and
happier than we've ever been. You might
already be thinking, but me and my
business are different. It's not going to
(13:30):
happen with me. Stay tuned after the
break for the alternative perspective.
Ready to take the next step towards
securing your financial future?Whether
you're planning for retirement, saving
(13:50):
for your dream home, or you just want to
make your money work harder for you. The
team at Wealth Wisdom Financial are ready
to assist you, and now it's easier than
ever to see how we might give you a boost
on your financial journey. Schedule a 15
minute discovery call with one of us
today and let's discuss your questions
and your financial goals together. Don't
(14:10):
wait any longer. Your financial freedom
awaits. Schedule your discovery call at
www.wealthwisdomfp.com/call.
Now I know what some of you are thinking.
I heard these concerns from Sam and
(14:30):
from many other seven-figure business
owners. I can't afford to cut
services or clients. We need that revenue
to cover our overhead.
My team expects me to be involved in
everything. They'll resist any attempt to
change that. My business
is too complex to simplify.
(14:52):
That might work for others, but our
situation is unique because you know
you're a unicorn. These concerns
feel completely valid when you're in the
middle of the seven-figure struggle, but
they're based on assumptions that deserve
closer examination. First, let's
talk about Melissa. Melissa ran a
(15:12):
marketing agency that had hit $2.3
million in revenue, but was barely
breaking even. When I suggested she
eliminate her three least profitable
service lines, she was adamant. But those
services bring in almost 800,000 in
revenue. We need that to cover our office
lease and team salaries. But when we
analyzed the true economics, we
(15:32):
discovered something startling. Those
services required so much specialized
staff, technology and management
attention that they actually cost more to
deliver than the revenue they generated.
They weren't supporting the business,
they were actually draining it. When
Melissa finally made the difficult
decision to sunset those services and
focus on her core offerings, something
(15:54):
unexpected happened. Her revenue
initially dropped to 1.6 million,
$500,000 drop, but her profit
increased from near 0 to
over $400,000 annually. The
business became dramatically simpler to
operate, and within 18 months, focused
growth in her core services had brought
revenue back up to just under 100,000
(16:16):
from where it was before. with a healthy
profit margin of 25% when it was zero.
Yeah, and I wonder, like those TikTok
videos, right?Um, what would they have
said?But what I think is her
personal health and well-being is more
important than whatever video is out
there that's saying, well, you you need
to be on that treadmill longer, right?
(16:39):
UmLet's talk about the next one, team
resistance. As for team resistance, I
understand this. fear deeply
when David, a technology
consultant whose firm had grown to
3.4 million, began restructuring
his team for more autonomy. He
encountered initial skepticism and
pushback. C told me they want
(17:01):
me to be involved in everything. They
won't work here if I don't do this.
But he discovered that the team's
resistance wasn't to autonomy itself.
It was to the unclear expectations
and incomplete systems that made
team members feel set up to
(17:21):
fail. Once he established clear
decision frameworks, documented key
processes, and created appropriate
support structures, something remarkable
happened. The team didn't just accept the
new autonomy, they embraced it
enthusiastically. Six months later,
one of David's initial
(17:42):
skeptical team members told him, I was
afraid you were abandoning us. Now we
realized you were finally trusting us.
That's huge. Yeah, this is, you can kind
of, a good parallel here is parenting.
When you're raising a kid, if you tell
them you want them to become more
autonomous, make their own decisions,
right?Get dressed to themselves. If you
(18:04):
just say go get dressed and you don't
provide any guidance or, you know,
things like that, they feel like you're
abandoning them and now they have to
figure this out and they're lost and
confused. I found it's been way easier as
a parent to break that down into,
OK, go pick out what you're going to
wear. Now, you know, OK, let's talk about
what you've just, you know, picked out,
(18:26):
OK?Or being more specific, pick out
a short sleeves because it's going to be
hot today. Don't wear long sleeves and,
you know, and kind of going from there or
put on the clothes I already laid out for
you last night, things like that, where
they know exactly what to do
and what success looks like, right?A lot
of the times we try to pass things on to
our team, but if we don't tell them what
(18:46):
to do and what success looks like, they
feel lost and abandoned rather than
empowered. So good good double thing
there. Okay, now let's talk about the my
business is just too complex objection.
This is perhaps the most common
resistance that we hear, and I remember
Elena, who ran a specialized consulting
firm that had grown to 4.1 million
(19:07):
through relentless customization for each
client. Our entire value proposition is
based on complexity, she insisted. Each
client engagement is completely unique.
We can't simplify without destroying what
makes US special. It's the complexity
that makes us different. But we examined
our operations closely. We discovered
that beneath the apparent uniqueness were
(19:28):
consistent patterns and repeatable
elements. The fundamental value wasn't in
reinventing the wheel each time, it was
about applying proven expertise to
specific client context. By
identifying these underlying patterns and
creating flexible frameworks rather than
rigid standardization, right?She didn't
want to become like the assembly line.
(19:48):
She still wanted to, you know, customize,
be bespoke, right?That was a superpower
for her. But she could still have these
flexible frameworks that would save lots
of time. And it dramatically simplified
her operations without sacrificing that
customization her clients valued.
Delivery time decreased by 30%, profit
margins increased from 14 to 29%.
(20:08):
And perhaps most tellingly, client
satisfaction scores actually improved
because the quality became more
consistent. The reality is this.
Complexity is rarely a strategic
advantage. More often, it's the
accumulated results of tactical decisions
made without a cohesive framework. And
(20:28):
it's the primary reason so many
seven-figure businesses struggle with
profitability and owner freedom.
Simplicity, focus, and strategic
decision aren't just nice to have
luxuries for when your business is
larger or more stable. They're the
essential foundation that makes
sustainable growth and profitability
(20:50):
possible in the 1st place. And how do you
decide how you're going to simplify,
where you're going to focus, how you're
going to be strategic about the decisions
that you make?you gotta look at the
numbers, you gotta understand the
numbers, right?All the things that we,
you know people think we're just finance,
but it's actually the finance that
empowers the marketing, the customer
service, the growth. I I think about that
(21:10):
a lot as as people are talking to us,
they're like, well, you just do this or
that. I'm like, as a profit first
professional, we're not just thinking
about how you're profitable,
we're thinking about the systems and all
the other stuff that go into it. And
sometimes even though you bought a good
marketing system,Maybe it needs to
be shut down or changed and we can
(21:33):
just see what the numbers say. Yeah, you
got to follow the numbers. So let's talk
about where Sam is today. After following
all those numbers, just 24 months after,
you know, talking about those three sides
of the profitability pyramid, his
business has grown to 4.3 million in
annual revenue, more than double its
original size. But the true
transformation is in the quality of that
growth. Profit margins have stabilized
(21:54):
at 26%, creating over
1.1 million in annual
profit. What $4.3 million business can
say that, right?His team has expanded
from 20 to 28 people, all aligned with
their value stream structure that
allows them to operate with minimal owner
involvement. And most importantly, Sam
now works just 35 hours a week, half of
(22:16):
his previous schedule. He takes a full
month off each year, completely
disconnected from the business. And his
personal income has increased over 300%,
three times from where we started, when
he was the lowest paid employee on the
leadership team. And for the first time,
he's systematically building wealth
outside of his business. He told us
recently, Two years ago, I was
(22:37):
considering shutting everything down.
Now I can't imagine doing anything else.
The business energizes me instead of
depleting me. This transformation
isn't unique to Sam. I've seen it happen
with business owners across industries,
from creative agencies to manufacturing
companies, from professional services to
(22:57):
e-commerce brands. This specific
applications vary, of course, but the
principles remain constant.
Strategic simplification that creates
more value than unfocused expansion.
Structural alignment builds teams
that can operate independently. And
intentional owner economics
(23:17):
ensures that businesses serves your life,
not the other way around. So those three
things are parts of the triangle. Yeah,
so if you're currently experiencing the
seven figure struggle, working harder
than ever while seeing less personal
benefit, know that it does not have to be
this way. Your business can be both
highly profitable and lifestyle friendly.
(23:38):
You can have both growth and freedom. You
can build wealth while building a
company, but this won't happen by
accident. It requires deliberate
restructuring and a willingness to
change the growth at all costs
mentality that dominate
entrepreneurial culture like that. That
is said all the time. So start by
(23:59):
conducting your own profitability audit.
Look beyond top-line revenue to
understand where your true profit is
coming from, and you'll likely discover
that a small subset of your services or
products generates the majority of your
profit, while others create complexity
without corresponding returns. Next,
assess your own relationship with your
business. Are you the bottleneck for
(24:21):
decisions?Do team members depend on
your input for routine matters?
Document where your time goes for one
week, and you'll likely find patterns
of involvement that could be systematized
or delegated. So finally, examine your
personal compensation structure. Are you
paying yourself first or taking
(24:41):
whatever's left over?Are you building
wealth beyond your business, or is
everything tied up in the company's
future and a wish, a hope, and a dream?
Those small shifts in these areas can
create dynamic improvements in both
business performanceand quality of life.
You don't have to choose between success
and sanity. With the right structure, you
(25:02):
can have both. Are you ready to
transform your seven-figure business from
a demanding obligation into a
wealth-creating asset?Well, then join the
Wealth Wisdom Financial Community. Today,
we've shared a framework called the
Profit Pyramid Blueprint. All
those blueprints. Yeah, the exact system
that entrepreneurs like the ones we've
(25:23):
talked about today use to double their
profits while having their working hours.
Even if their revenues went down, their
profits were going up. To get this
framework, you just have to join the
Wealth Wisdom Financial Community as a
premium member at
wealthwisdomfp.com/community.
It could be the turning point for your
business journey, just like it was for
Sam. And if you don't know, we share
(25:43):
wealth building tools every Wednesday in
the Wealth Wisdom Financial Community. If
you want to learn more, go to
wealthwisdomfp.com/community.
And if you'd like to talk with one of us,
like seriously, we love talking about
this. We love serving our
clients and helping them break through.
in smart, stable financial ways, go to
(26:05):
wealthwisdomfp.com/call
and just put in the notes, Hey, I wanna
talk about that podcast episode that you
mentioned, and we'll go from there, but,
but put in the notes, uh, that you wanna
talk about the pyramid or that
you've been listening to the most recent
episodes at
wealthwisdomfp.com/call.
(26:27):
Thanks for joining us. Hit that subscribe
button. Next month's theme is set to be
future-proofing. We can't wait to talk
about AI and more. We hope you live
long and profit. AI. Wow. Yeah, we're
gonna go there. Is there AI?Is there?What
is that?Oh my goodness. The stories in
today's episode are based on real life,
but just like Law and Order, they are
(26:48):
fictional. Dun, dun, dun. Dun, dun. Yeah,
fictional and do not depict any actual
person or event. The topics presented in
this podcast are also for general
information only and not for the purposes
of providing legal, accounting, or
investment advice. On such matters,
please consult a professional who knows
your specific situation.
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