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Join for freePosted: Fri 14th Aug 2026
Most business owners manage by watching their bank balance, but that only shows you what has already happened, often weeks after the event that caused it.
In this Lunch and Learn, Jon Davies from SecondBrain Consulting talks you through some practical checks you can run on your own business to catch where profit is leaking away and fix it before it shows up as a problem.
How to run a quick audit of your software subscriptions and stop paying for tools you don't use or have outgrown
How to tell the difference between your team being busy and being profitable, and where hours could be disappearing into unbilled admin and small unlogged favours
How to check whether your quotes match reality, and find out which jobs or clients are actually making you money
Jon is a business mentor and small business software consultant at SecondBrain Consulting, helping overwhelmed business owners become more confident leaders by automating processes, enhancing security, enabling collaboration, and improving profitability.
With 25 years working in technology, he also co-founded and grew an employer branding agency to 30 people, and so has hands-on experience of the pitfalls (and pleasures) of running a small business.
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Lightly edited for clarity.
Beth: Hello, everyone, and welcome to today's lunch and learn. My name is Beth, and I'll be your host today. For those of you attending a lunch and learn for the first time, Enterprise Nation is a vibrant community platform for start-ups and small businesses.
I'm very pleased to introduce Jon Davies, who is a business mentor. In this session, Jon will talk through some practical checks you can run on your own business to catch where profit is leaking away and fix it before it shows up as a problem.
If you have any questions throughout the webinar, please post them in the chat or in the Q&A, and we'll do our best to answer them at the end of the session. As always, today's session will be recorded, and we will send the recording with further resources in a follow-up email today.
So over to you, Jon.
Jon: Thank you very much for that intro, and hello, everybody. Thank you for spending your Friday lunchtime with me. I especially hope you're all coping okay in the heat today.
My name is Jon. I'm a business venture and tech consultant. I spent about 15 years founding and growing an award-winning advertising and branding agency.
That's my real-life business experience of learning as I go along, as I'm sure many of you have. Now I work with my own consultancy business, helping overwhelmed founders and business owners get their systems and tech sorted so they have the headspace to explore their ideas and grow their business.
As a mentor, I was a finalist in this year's National Mentoring Matters Awards for business impact, so I must be doing something right. Without further ado, let's crack on with the presentation.
I've based this on five different ways we can explore over the next 20 minutes or so to help you find and eliminate potential profit leaks in your business and improve your margins. Some of these can be automated with job management software, but my goal today is really to plant some seeds for areas you might want to go away and investigate further, and give you some practical ideas on where to start so that you can make a real impact on your bottom line.
The five areas we're going to go through are auditing your software subscriptions, selling value not time, measuring utilisation not busyness, eliminating hidden admin time, and reviewing your top supplier costs. Some of those might sound a bit confusing at first, but don't worry – we're going to go into the details of them as we go along, so hopefully it will all become clear.
But why are we looking at these five things today? All the things we're going to look at are aimed at fixing things in the here and now, so it's about what you do in your business and how you do it going forward, rather than looking backwards at what you've already done.
It's always a bit seductive when we're running a business to use our accounts or our bank balance as the barometer for whether things are working. But that's like driving by looking in the rear-view mirror – you only find out that something isn't as profitable as it should be once the work is complete, once the invoice has been sent, and the client finally pays you.
So instead, what we need to do is shift focus to catching operational problems while there's still time to correct course. That's what today is all about – looking at what we're doing now so that we find out about any potential issues before they become a problem.
That's important because, as the expression goes, if you keep doing what you've always done, you'll get what you've always got. That focus on the here and now matters because if we only focus on filling the sales funnel and finding new customers, then as we scale up and get bigger, our systems and processes won't scale with us.
What works when you're one, two, or three people doesn't necessarily work when you're five, 10, 15 or 20 people. At each stage, as your team grows, you unlock new challenges and new things to deal with, as some of you will already know.
As I said, if we only focus on finding new customers and filling the funnel, our systems and processes don't scale as we get bigger, and a messy delivery model just scales up into a bigger mess. It's the same story when we're using AI to automate processes – that can be great, but if you don't examine the process thoroughly first and figure out how it's going to run, you risk ending up with an automated mess at the end of it.
So that's one thing to look at as we grow. But we also need to focus on profit margin first and foremost, because knowing the margin for our typical projects or products means we can make more educated decisions about how we're working.
For example, in my previous advertising agency business, we sold two main types of things. Media space, or advertising, was high revenue but lower margin, so we sold a lot of it but didn't make much money because we were selling someone else's product for a commission.
We also sold creative work, which was lower volume but much higher margin. If we only looked at revenue, there would be months where we'd be patting ourselves on the back because we'd met our sales target and sold lots of stuff.
But if that was mostly composed of media sales, we wouldn't be keeping very much of that money – we'd be sending it straight back out the door to pay for the media space. So, as with all things, it's about balancing both quality and quantity in what we do.
Just to be clear, especially for those of you who are just starting out or newer in business, when we talk about margin, we're talking about the percentage of our revenue that we get to keep after we've subtracted our costs to deliver the work. The easy way to work that out, as you can see on the slide, is profit divided by revenue, times 100, which gives us our percentage margin.
You can go into more detail with this – the difference between gross profit and net profit, and gross margin and net margin. But in simple terms, if we sold £1,000 worth of product or service, that's £1,000 of revenue.
If we made £150 of profit on that, and we divide the profit by the revenue and multiply by 100, it tells us that was a 15% profit margin on that work. Hopefully that makes sense.
Despite the fact I do a lot of work with finances, I'm also a big user of digital technology because I'm terrible at maths, so if that's giving you the horrors, don't worry – that's about as mathematical as we're going to get today, hopefully.
So I talked about the five things we're going to look at today. Let's start with number one, which is hopefully a fairly simple one, particularly for those of you who have businesses that have been around for a while, or where you have a larger team, and things are growing.
Software subscriptions are an area where it's very easy to slide into paying a lot more money than you thought you were. It happens gradually.
You sign up for a new app on a bit of a whim because it sounds like it should be good, and you use the company card to pay for it. Or a team member leaves, and you carry on paying for their licence because you forget to switch off a couple of seats.
Or an annual contract renews in the background at full price after an introductory trial offer, and you didn't spot it coming up so didn't get a chance to change it. We've all done it – it's easy to do, but it slowly builds up, and it's easy not to realise how much you're spending.
There is some software I use with clients that can automate this process and analyse all the data for you. But doing it manually, I would pull the last 90 days of your bank transactions – if you're using something like Xero or FreeAgent, it can be very helpful for this – and filter out all of the recurring software payments.
So those are the things we want to look for: all those subscriptions and software payments. Then tag each tool into one of four categories: essentials, nice to haves, overlaps, and unused.
Overlaps are a big one here. A classic example is how many people listening today have a Calendly subscription or a similar calendar booking service.
If you use Google Workspace, it already has that built in – you've already got appointment booking pages in Google Calendar, so you don't need to be paying for Calendly, Chili Piper, or any other appointment scheduling software. So you could save some subscriptions straight away.
In larger teams and businesses, you might suddenly find there are an awful lot of different subscriptions for AI notetakers – Otter, Fireflies, Granola, and everything else. There are so many of those AI notetakers now, and they actively try to get lots of people in your team using them piecemeal, but it ends up being lots of subscriptions.
So if you can standardise on one – for example, if you're using Google Workspace, you've already got Gemini, so you're already paying for it. I'm a big fan of Google Workspace because there's so much built into it.
For example, most people aren't aware that Google Workspace now includes a full video editing suite, so you can make your videos for social media with it. It's called Vids, at vids.google.com, so again, that might be another licence you don't need to be paying for.
So those overlaps are quite important. Then recovery is the final step: cancel the unused tools, downgrade or eliminate the nice to haves, and recover cash flow with zero delivery impact because you've already got another tool you can use instead.
Another big one to be aware of is that there's a private equity company that keeps buying up software companies. They're called Bending Spoons, and part of their tactic is increasing subscriptions.
People using Harvest time-tracking software have recently found their subscriptions have gone up by up to 8,000%, and Bending Spoons also now owns Vimeo. So if you're using Vimeo for video hosting, it's quite possible that at your next renewal you'll see quite a big jump in price.
It's worth starting to look at whether there are cheaper alternatives – and there are – and what work would be involved in moving away from them before you're suddenly on the hook for a big bill. So software subscriptions are a big area that creeps up when you're not looking, so it's worth thinking about.
Okay, number two: selling value, not time. This one is much easier said than done, but it goes back to what I was saying earlier about understanding the margins for all of your typical projects and products.
That means looking, for each product or project, at a pricing formula. So accounting for the time you think it's going to take to do the work, the materials involved – especially if you're producing something physical, there will be material costs.
If you're a consultant like me, your material cost will be very low because it's mainly a knowledge business. Then there's operational overhead, covering your business expenses – pitch time to win the work in the first place, internal meetings, all the time you spend that isn't directly related to the client themselves.
And your target margin – what's your built-in, non-negotiable profit? What makes a product or a project a winner or a loser?
If the margin on a particular job goes below a certain threshold, we know we've made a mistake and need to make sure it's better next time. Having those figures in mind is the first step to selling value, not time, even though it's very easy, when we're building a business, for that focus to slip as we get caught up in delivering the work.
The reason I talk about that is because when you sell time, you're penalised for doing the job more efficiently. If you say it's going to take two hours, and you do it in one, but you only get paid for one hour, then being really great at your job has actually made you cheaper.
Whereas when you sell the value of the thing you're delivering, whether it's a service or a product, you get a fixed price for that value. Then if you do it faster, you make more money and improve your margin.
That's easier said than done – we all still have to figure out how long something's going to take and what the price will be. But even if you've already embraced this and you're selling all your work by value, with a fixed price that has plenty of margin built in, it's still really important that, for internal use, you track the time and costs used to deliver a job.
Because even if the client doesn't see that and just pays a fixed price, if you're not tracking the time and cost to deliver it, you don't know if those margins are starting to slip away. As the team grows, inefficiencies can creep in, people may do things in different ways that take longer, or costs may go up, and it's very easy for that to slip if you're not tracking the time and cost to deliver each job.
You can do that in various ways: your finance software, job management software, or even a simple spreadsheet, although spreadsheets don't tend to scale so well as things get bigger. Businesses tend to reach a point where everyone outgrows the spreadsheet.
Okay, so that's number two, selling value, not time. Part of that is also about having three lenses on every job.
For every job you do, there are three ways you can look at it. What you think it will cost – usually your quote to the client, or a quote that's just for your own internal use.
What it will actually cost, which you'd measure by timesheets, costs, and bills from suppliers. And what you charge the client for it.
So what you think it will cost, what it actually costs, and what you charge the client are three potentially different things, but it's important that you know and understand all three perspectives on every job you do. Most project management software is really great at getting tasks done and getting the work through, but not necessarily at tracking how effectively or efficiently it's done.
A common scenario in a service business is you quote a client for 20 hours of work, but the job actually takes 30 hours to complete, and that 10-hour gap is an unrecoverable hit to your profit margin. It's easy not to catch those kinds of discrepancies, because if you didn't quote it at the start, you don't know what the original budget was against the actual tracked hours until the project is entirely finished, and by then it's too late to bill the extra time or negotiate with the client. That means you end up absorbing the entire cost of the overrun because you couldn't have that conversation proactively as the project went on.
Okay, so number three: is your team busy, or profitable, or both? Here we're looking at two different things: capacity versus utilisation.
When we talk about capacity, we're talking about the total number of working hours available – so in a standard full working week, that would probably be about 37 and a half hours. That's the total number of working hours your team has available in a given week.
High capacity with low utilisation means you've got lots of time you're paying your team for that you can't necessarily convert into revenue. Utilisation is how many of those hours are actually billable to a client.
So a team could be completely overwhelmed, working late and stressing over deadlines, but you might still be missing your profit targets because they're not necessarily using their time and capacity in the right ways. So what might be eating up that capacity, so that it's not being utilised properly?
Well, it's things like admin tasks – billable time that vanishes into the admin tasks hiding in your daily routine. It's the routine chores, the day-to-day admin, that starts to leak profit.
So the first step is to identify them, then look for opportunities to automate, delegate, or eliminate them. Notice automate is only one of the three choices there.
You'll find many other lunch and learns on using AI to automate things in your business – they're all in the library if you want to go back and watch them, and there's lots you can automate. But also, is the right person doing the job? Delegation can be important too.
Once you start building a team, it's often true that people say it'll just be quicker if they do it themselves, and they're not using their team members effectively. So delegation matters, and then there's elimination – are there admin tasks we're doing for admin's sake that don't actually need to be done? If you're not using the data, why are you capturing it, or recording it?
Internal meetings are the second thing that can eat up capacity. Are all your internal meetings necessary? Does everyone present need to be there?
Are people doubling up because they don't want to have to tell someone afterwards what happened at the meeting? Are you having three meetings a week when you could manage with two?
Are people just nodding along and attending? Do the meetings you have internally always have an agenda, and do people turn up on time?
I've worked in businesses where everybody is always five or 10 minutes late for every meeting, and then it's a case of asking what we're talking about today, what's happening, what we're doing. That kind of simple meeting discipline can really help improve efficiency and effectiveness.
So could you reduce the number of meetings or attendees? Could you send information out in a different way, or record instructional videos so you don't need a meeting about something? There are all sorts of different approaches you could take.
Going back to connecting what we talked about earlier around utilisation, and the different lenses on the job, there's also unlocked client favours. There's a fine line between the quick favours we all want to do for our customers versus scope creep.
When clients start to ask for extra work – could we just add a page that does this, or could you do a bit of work on that – gradually, what started off as a £1,000 project turns into a £2,000 project, but we don't necessarily adjust the scope and end up charging for it. Accounting for that scope creep is really important.
It doesn't have to be a very laborious, admin-intensive paperwork process, but you do need to keep track of where things have shifted and changed, and ideally have the conversation with the client to say we've actually done 20% more work than we thought, and we'd like to charge for that, or flag it before it even happens.
So, how many favours are free before you start charging for them? In my old advertising world, how many rounds of amends does the client get before we say we've done two lots of amends on this piece of creative work now, so they're going to have to pay if they want to keep changing things.
So the first step to getting a handle on that is quantifying the time you're spending on jobs – that second lens of the three we were talking about earlier. Thinking about what it actually costs to deliver the job helps you push back on your clients to make sure you're charging for the work you're doing.
Number four: reducing admin friction. This ties into our previous points: if there are some of you still using Microsoft Word to send invoices, it's definitely time to upgrade to some accounting software. If you're a sole trader, Making Tax Digital is coming, or is already here for you.
If you're a limited company, accounting software will make so many things easier. Ideally, you'll also have job management software that helps you accurately quote a job and then flow that through into your financial software to create the invoices.
But could you also be using recurring invoices? If you've got the same invoice you send every month, could your accounting software automatically generate that for you, so you're not having to think about it and spend time at the end of every month sending invoices? Is there other automation you could do to make that process simpler?
Timesheet chasing: if you're keeping timesheets, and ideally you should be, not capturing them and chasing up team members who haven't done them wastes precious time. Either way, you can make capturing time quick and easy by integrating with your calendar or using AI to record voice notes of what you're doing and then interpret them later into a time log, connecting it to your job management software so that it's all automated.
If you're out and about a lot, can you use something app-based so you can log time on your phone, and it all goes back into the same pot? For those who inevitably forget to do their time tracking, you can automate reminders for anyone who logs below a certain threshold of time for the week.
And then the final one on this point is double data entry. Duplicating data between systems is a major waste of time, and if you ever find yourself copying and pasting things from one system to another – repetitive data entry – I always say that if you've done that more than five times in a row, it's probably time to start thinking about automating it.
AI is making it so much easier than ever to do those kinds of things, so you can ask AI to do a particular task for you. I needed to get a load of information from a web page recently that wasn't possible to get any easy way other than cutting and pasting it, but I got Claude to do it for me – yes, it took five to 10 minutes, but I was off doing something else while it worked, so it was much nicer than sitting there cutting and pasting information myself.
Also, with AI, you've now got MCP servers and connectors that allow you to much more easily connect different software together, so you can now do things like say: look at my calendar, look at my email, figure out what I've been up to for the last two days, list that all out for me, and then upload it into my timesheet tracking system. These kinds of things are getting a lot simpler to do, and there's also software like Make.com and Zapier that allow you to set up automations between systems, too.
Number five: Review your top three supplier costs annually. This is linked to what we said about software costs, but it applies across all of your suppliers. Much like with your home bills and direct debits, loyalty rarely gets rewarded with better pricing.
Usually, the price creeps up every few months or every year, and new customers get the better deals. So set a simple annual calendar reminder to review your top three supplier costs, ideally aligned to when the renewal dates are for those contracts, so you've got a month or two to think about it. It can save you a lot of money.
For things like Microsoft or Adobe licences, for example, you tend to get a window during the year where you can reduce the number of licences if you don't need them any more. You can always add more, but they only give you a small window of time in which to bring the cost back down again, so getting that in your calendar gives you the opportunity to try to save some money.
Take special care to set reminders for multi-year contracts, too, because they often have very small windows to amend or cancel that are easy to miss. Some HR advice providers, for example, will sign you up to a three-year contract with only a six-month window in which you can cancel it.
By the time you're getting to the end of the three years, you've forgotten about it, that window slips by, and you're automatically renewed into another three-year commitment with no way to escape the contract. So, again, putting things like that into Google Calendar or Outlook is your best friend for making sure you're reminded in good time – it probably sounds simple, but it's something a lot of people forget to do.
So, bringing it all together, before we move into some Q&A: imagine a mid-sized creative agency struggling with cash flow despite having a full client list. They discovered, by doing some of this work, that their team was over-servicing accounts by about 20% due to unlocked client revisions and doubling up on internal meetings.
They also found some redundant software subscriptions and a hosting provider charging double the market rate simply because they'd been with them for years. They managed to introduce maintenance contracts for customers, for work they'd previously just been doing as favours or day-to-day admin, formalising it into a new revenue stream.
By doing all of that, they managed to improve their margin by 8% without needing to win any new clients. So the savings are there – it's just a matter of going and looking for them.
So, a quick summary of the five things we talked about: auditing software subscriptions, pricing by value, measuring utilisation not just busyness, eliminating admin tasks, and renegotiating supplier costs. We've come in at 26 minutes, so we've got four minutes left for any questions.
Hopefully I haven't spoken too quickly, and hopefully it's been useful. You can find me on the Enterprise Nation portal if you'd like to connect, via my website, or on LinkedIn.
And the session will be on replay on Enterprise Nation within the next few days as well. So thanks for coming, thanks for staying, and thank you for staying awake – I know it's very hot today. But do we have any questions?
Beth: Yeah, brilliant, thanks so much for that, Jon. Andrea asked in the chat: do you have a formula for adding operational costs into job estimates?
Jon: I think you're suggesting adding overheads in an estimate. If I were doing an estimate for internal use, then yes, I might bear those in mind.
What I would usually do, if I were putting time on an estimate – say I was putting five hours of project management – is I would have an internal cost for that and a price. The internal cost would include a share of all the overheads.
There isn't one golden formula for doing that; it's different for every business. Some businesses will basically look at all of the overhead costs and divide them by the number of people in the team, and sometimes they'll subdivide that by seniority.
You can get very complex in the way you divide that up between people. I think the main thing is just finding something that works for you as a yardstick, but I haven't got a definite answer on that one.
Beth: Sure, no, that was great, thank you. So what are some of the earliest warning signs that profit is leaking from a business before it becomes obvious in the accounts?
Jon: I think if you're not doing all the things we talked about and measuring that information, it's very hard to tell before you see the accounts. But what I'd see as a warning sign is when everybody's telling you they're really busy – there's so much going on, they never stop – but then when you do get the accounts, it's not tallying up.
That's because there's clearly a mismatch between your capacity and your utilisation. It's not that people aren't busy, but are they busy doing the right things? That would probably be my first warning sign.
You're not necessarily going to see the warning signs before you get the accounts if you're not looking at, or capturing the information we talked about. If you haven't quoted for a job, it doesn't matter if you have all the time and cost recorded, because you don't have the match between what you thought it would cost and what it actually cost, so having all three of those lenses to compare is the important part.
Beth: Yeah, absolutely, that makes sense, brilliant, thank you. Okay, so we'll do one more if that's okay – we've just got a good one in from Leo. Leo would like to know: how do you go about managing clients who exploit pre-project work, such as free pitches or trials, or then demand unlimited revisions after project completion?
Jon: That's a really good question. Pre-project trials and free pitches are something I've always really resisted doing. I've pushed back on clients and said we're happy to tell them about our thinking and our process and how we'll do it, but we're not going to do three different kinds of creative work, show them, and let them pick, because that's us doing the work they're going to pay us for before they've paid us for it.
There are stories of clients basically taking an idea and saying they don't want to work with you, but then something suspiciously similar turns up six months later. So I think there's a grown-up discussion to be had, in a very nice way, around the fact that they're buying your expertise and your knowledge – that's what they're paying you for, so it's unreasonable to expect that for free upfront.
And with amends and negotiation, I think it's really about clarity upfront, in a very nice way: saying we're going to do this work with you, and it includes two rounds of amends. If it's one tiny amend, like fixing a comma, maybe you do a third round, but when they start to take the mickey, that's when you say this is starting to drift from the original scope, and you now need to think about charging for next time.
Actually, when you're logging all of that time in job management software, I've had the conversation with clients where we've said, do you know we've actually spent 20 hours more than you've paid for this month? And they say, blimey, okay. Sometimes you can have that adult conversation with a client, and they say they didn't realise, and that they should probably be paying you for some of that, because it accumulates.
Beth: Oh, thank you, thank you so much, Jon, that was a really informative session. As Jon said, this recording will be going out later today, and I've popped Jon's LinkedIn and Enterprise Nation profile in the chat, so please do reach out if you have any more questions. Thank you, and I hope everyone enjoys the weekend – thanks very much, Jon.
Jon: Thanks very much, everyone. Thanks for coming. Bye.
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