The Profit Leak Hiding in Your P&L

April 23, 2026

Most middle market companies are leaving 20-40% of their profit on the table. Not theory. Measured. Every turnaround I’ve led started with the same 30-minute exercise that found it.

The exercise

Pull your last full year of financials. Sort every customer, product, and SKU by gross margin contribution — not revenue. Draw a line at the 80th percentile. Below that line is your profit leak.

What you’ll find

A long tail of products that look busy but earn nothing. Customers who negotiate hard on price and pay slow. SKUs your founder is sentimental about that haven’t earned their keep in three years. This is the 80% you need to cut, reprice, or re-sell.

Why CEOs miss it

Because your reporting is organized by revenue. Your sales team is compensated on revenue. Your board asks about revenue. Nobody is looking at the margin-weighted view except you — and most CEOs don’t look often enough.

What happens when you fix it

In every turnaround I’ve led, this one exercise — plus the courage to act on what it shows — produces 10-30 points of EBITDA improvement within 12 months. Not from growth. From clarity.

Ready for a direct conversation about your business?

Bill Canady takes a limited number of strategy coaching calls each month with middle market CEOs, founders, and owners who want a direct read on where their company stands and what to do next. No pitch. No fluff. One honest conversation about growth, profitability, and exit readiness. Book your strategy coaching call at billcanady.com.

About the Author

Bill Canady

Bill Canady is a national best-selling author, Founder & CEO of The 80/20 Institute, and a global business leader known for transforming companies into high-performing, profitable enterprises. Over the course of his career, Bill has led multibillion-dollar organizations through their most critical challenges—navigating complex regulatory, investor, and media environments—while consistently delivering profitable growth.

Drawing on decades of executive experience, Bill created the Profitable Growth Operating System (PGOS), a proven framework designed to help leaders cut complexity, focus on the critical few, and accelerate growth. Through The 80/20 Institute, he and his team partner with CEOs, executives, and entrepreneurs worldwide to apply the 80/20 methodology in real-world settings, unlocking revenue growth, margin expansion, and shareholder value.

As both an operator and advisor, Bill’s mission is clear: to give leaders the tools, systems, and confidence they need to achieve sustainable, profitable growth — without sacrificing focus, culture, or execution.

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