Your business is growing. Calendars are full. Revenue is increasing.
And yet profit remains under pressure, or feels more fragile than it should.
Do you recognize that feeling? That you are working harder than before, selling more than ever, but the financial result does not grow accordingly. Or maybe you have not consciously noticed it yet, but intuitively sense that being busy is not the same as being profitable.
What if the problem is not a lack of customers, excessive costs, or insufficient effort?
What if the problem lies in contradictions that almost every SME has come to accept as normal?
Paradoxes that are so deeply embedded in the entrepreneurial landscape that they are rarely questioned. Paradoxes around revenue, margins, loyalty, discounts, efficiency, complexity, data and performance management. Things you might think of as “just the way business works”. Or worse, “everyone does it this way”.
The following 10 paradoxes are not theoretical. They are daily reality in SMEs. Some you will recognize immediately. Others you may have experienced without ever naming them. And a few you may never have consciously considered, even though they quietly erode your profitability.
The question is not whether these paradoxes exist.
The question is which of them are already at play in your business today, and how much margin they are silently costing you.
1. The Revenue Paradox
Revenue growth is often seen as proof of success, yet in many SMEs additional revenue comes from discounts, rush orders or low-margin customers. As a result, workload increases while profit stagnates or even declines. Selling more does not solve profitability issues when the underlying margin structure is flawed.
2. The Margin Blindness Paradox
Many entrepreneurs feel that profit is under pressure, but cannot pinpoint where margins are being lost. Without insight per customer, product, project or order, effective steering becomes impossible. Margin turns into a vague end result rather than a variable you can actively manage.
3. The Loyalty Paradox
Long-term customers often receive better conditions, more attention and faster service than new ones. What is intended as appreciation frequently results in structurally lower profitability. Loyalty is rewarded with margin erosion instead of sustainable profit.
4. The Discount Illusion
Discounts are used to close deals, keep customers satisfied or avoid difficult conversations. What is rarely calculated is how a small discount can have a disproportionate impact on profit. A discount given quickly is usually very hard to take back.
5. The Efficiency Paradox
Being busy and having full schedules are equated with productivity, while a large share of time is spent on rework, exceptions and low-value activities. Companies optimize processes without questioning whether those processes actually contribute to profit. Working efficiently is meaningless if you are efficiently generating losses.
6. The Complexity Paradox
To satisfy customers, products, services and processes become increasingly customized. Each exception makes sense in isolation, but together they create higher costs, more errors and coordination overhead. Complexity grows silently and eats away at scale advantages and margins.
7. The Data Paradox
SMEs have access to more data than ever through ERP, CRM and accounting systems. Yet commercial and operational decisions are still largely based on experience and intuition. Data is available, but not translated into insights that actively guide behavior and choices.
8. The Value Paradox
Entrepreneurs believe in their added value and communicate it clearly to the market. But when price pressure arises, the conversation quickly shifts toward concessions instead of reinforcing value. As a result, value is not monetized but exchanged for volume.
9. The KPI Paradox
Many companies steer on revenue, utilization and activity because these metrics are easy to measure. KPIs that reveal true profitability, such as contribution margin or profit per customer, remain underused. What is not measured cannot be actively managed.
10. The Timing Paradox
Margins are often analyzed only at month-end or year-end closing. By then, commercial and operational decisions have already been made and can no longer be corrected. Insight arrives too late to have any real impact on results.
Do you recognize one or more of these paradoxes?
You don't have to solve everything at once. But you can start today by seeing where your margin is really being made or lost. Contact us about how we can help you.
