The Two-Phase Growth Strategy: Boosting Profits and Scaling Revenue

As an entrepreneur, I’ve had multiple businesses going at once, each bringing in lots of revenue. But here’s the problem: at the end of the year, despite all that revenue, the profits weren’t where they should’ve been. It was frustrating—how could I be making so much money but have so little to show for it? That’s when I learned an important lesson, one that has shaped how I approach growth for every business since: you have to plug the holes in your bucket before you try to fill it up with water.

In other words, before you can scale your business and chase top-line growth, you need to lock down your bottom line. If your internal finances aren’t stabilized—if you don’t know where your money is going or why your profits aren’t keeping pace with your revenue—you’ll end up spinning your wheels. You’ll grow, but you won’t thrive. And ultimately, you’ll be left wondering why more sales didn’t lead to more success.

Phase 1: Focus on Your Bottom Line

The first phase of any growth strategy should be about building your bottom line—ensuring your business is running efficiently and that every dollar is accounted for. This means tightening up your internal finances, cutting unnecessary costs, and optimizing your processes. You’ve got to make sure that the money coming in is sticking, not leaking out through inefficiencies or uncontrolled expenses.

I’m a big believer in the principles outlined in the book Profit First. It’s all about prioritizing profitability from day one and ensuring that after all the expenses—salaries, rent, overhead—your business is still healthy. This isn’t just about watching the bank account; it’s about making sure your business can sustain itself, reinvest, and scale without putting undue stress on your finances. It’s not glamorous, but if you don’t do this, no amount of top-line growth will save you.

This is where I went wrong in my earlier ventures. I was chasing revenue, thinking that more sales would solve everything. But when you don’t have control over your costs, more revenue just means more complexity. And at the end of the year, that complexity eats into your profits.

Phase 2: Scale Your Top Line

Once you’ve locked down your bottom line—once you’ve plugged the leaks—you’re ready for phase two: scaling your top line. This is where you focus on growth—sales, market expansion, new revenue streams. But now, because you’ve done the work in phase one, you can grow with confidence. Every new dollar of revenue doesn’t just inflate the top line—it contributes to a healthier, more profitable business.

Top-line growth is about more than just making more sales. It’s about strategic expansion that aligns with the strong financial foundation you’ve already built. You’re not just chasing numbers anymore; you’re scaling sustainably, knowing that every new customer or every new product is driving real value back to the business.

Continuous Improvement: The Key to Lasting Growth

The reality is, these two phases aren’t linear—they’re cyclical. Once you’ve stabilized your bottom line and started scaling your top line, the work isn’t done. You have to keep improving, in both areas, to keep growing. As you scale, you’ll uncover new inefficiencies, new leaks that need to be plugged. The market will change, your costs will shift, and the only way to stay ahead is to commit to continuous improvement.

It’s easy to get caught up in chasing growth, but the businesses that last are the ones that focus just as much on profitability as they do on revenue. It’s a balance, and when you get it right, everything clicks into place.

Final Thoughts

If you’re in the early stages of growth or finding that despite growing revenue, your profits just aren’t where they should be, it’s time to take a step back. Don’t chase sales until you’re sure your business is ready to scale. Lock down your bottom line first. Make sure every dollar is working for you. Then, and only then, pursue top-line growth.

If you need help figuring out where those leaks are, or how to stabilize your business before you scale, book a free consultation. This is what we do—helping businesses build a foundation for real, sustainable growth.