Are You Growing Broke? Why Scaling Your Business Might Be Shrinking Your Profits (and What to Do About It)

The sneaky trap where revenue rises but margins disappear. Here’s how to protect your profits and your peace before you get yo’self into a financial pickle.

Emma Bowdler | The Women's Accountant

Emma Bowdler

I’m a cheerleader for women and an accountant bursting with personality. 

Trying des-per-ate-ly to boost your business but feel like you’re quietly and oh-so-spectacularly leaking cash? Welcome to the dreaded (but sadly common) phenomenon of growing broke.

A club that no one wants to be part of, ‘growing broke’ is what happens when your business grows…on paper (i.e. more clients, more sales, more services), but your profits? Vanishing faster than your patience with a mansplainer.

Ok, big breath. We know it stings. What we also know is that you didn’t go into business so you could make less money and have more stress. Nuh-uh, that ain’t it.

You went into business because you wanted more flexibility, more freedom, and to build something great. So, let’s go there. Let’s talk about what it really means to grow broke, and fix it, before you *actually* go broke.

What Does ‘Growing Broke’ Actually Mean?

Growing broke is essentially when your revenue is increasing, but your profit is shrinking (or non-existent). Common signs are that you’re working harder than ever, but somehow making less money. Or worse, you’re actually dipping into savings, loans or credit to keep things afloat. It’s business growth without financial gain — and, frankly, we hate to see it.

How Does It Happen?
I Thought Growth Was Good…

There are a few common culprits of why your growth isn’t showing up in your profit that we see erryday at The Women’s Accountant.

Numero Uno:
Not Pricing Properly

A bigger business generally comes with bigger expenses: team, tech, time. If your prices don’t reflect that, you’re essentially subsidising your clients. And spoiler: that’s not sustainable.

Thanks to a little thing we call ‘inflation’, the cost of doing business keeps going up. So if your pricing hasn’t shifted in a year or more, you might be going backwards without even realising it (and not in a cool moonwalking kinda way).

Hot Tip From Your Business BFFs:

Your prices aren’t only about what your skills are worth — they’re also about what you need to thrive. In case you needed a reminder: profit isn’t a dirty word; it’s your buffer, your breathing space, and your growth rocket fuel.

Numero Dos:
Spongebobbing, A.K.A Absorbing Rising Costs

Super guarantee? Going up. Award wages? Rising. Software subscriptions? They’re moving on up too. If you’re soaking up every rising cost in your biz like a bright yellow sponge under the sea, then we’ve got a problem.

Even though you might feel like a savvy, scaled-up business owner, if you’re absorbing those costs without passing any of them on (even in small increments), you’re effectively paying the price for everyone else’s pay rise. And it’s not being generous, it’s self-sabotage.

Hot Tip From Your Business BFFs:

You don’t have to hike rates overnight — small, consistent adjustments are better than big shocks. Add CPI indexing to your contracts, review your prices regularly, and communicate changes clearly and confidently (we can help you!).

Are You Growing Broke? Why Scaling Your Business Might Be Shrinking Your Profits (And What to Do About It) | The Women's Accountant

Numero Tres:
Not Trimming Your Expenses

It’s easy to sign up for tools and a) forget about them, b) forget to cancel them before the free trial is over, and c) keep on paying for them year after year after year.

Around here, we have a saying: ‘costs are like fingernails, trim them often’. That’s why a regular subscription and software audit is a must-do. We do a quick one every quarter, and then a deeper cut every EOFY. You’d be amazed at how many sneaky costs hide in plain sight.

Hot Tip From Your Business BFFs:

Look for overlapping tools (e.g. are you paying for Acuity and Calendly Pro and another scheduler?). Consider annual billing to reduce costs and cancel what’s no longer useful!

Are You Growing Broke? Why Scaling Your Business Might Be Shrinking Your Profits (And What to Do About It) | The Women's Accountant

Numero Quattro:
Reinvesting Without
a Clear ROI

You’ve already got three reasons, she probably doesn’t need *another*—but here’s one just so the penny fully drops about the dangers of growing broke.

Sometimes when we’re growing, or even when things are struggling, latching onto business upgrades can be one way to feel ‘in control’ (think: new websites, rebrands, fancy email platforms, new tech, new merch).

Investments are meant to help you generate more income or save significant time. That’s kinda their whole thing. So, if they don’t? Either, toss them in the ‘not now, not ever’ pile right next to that $600 course you still haven’t finished. Or, file them away somewhere under: nice idea, wrong season.

Not every shiny new thing deserves your attention (and your money) right now, and that’s ok.

Hot Tip From Your Business BFFs:

Put a 24-hour timer on every time you want to make a big business purchase or find 3 trusted friends or fellow biz owners who think it’s a good investment.

Sometimes you’ll convince yourself out of it before you even add to cart.

Think You’re at Risk of Growing Broke?
Here’s What to Do

It is absolutely possible to grow a business without growing broke. The secret? Conscious scaling. Here’s where to start and a few resources to help you on your way.

1. Review Your Prices — Yes, Again

When was the last time you raised your prices? Do your prices account for the increased cost of living? Are you paying yourself fairly (including super and time off)? Do your packages/services actually reflect the value you deliver?

It’s not enough to just cover your costs. You need a buffer. Breathing room to hire, take time off, or ride out a slow month. That means pricing for profit, not just survival.

A business with 10 clients that makes $10K revenue with $2K profit is not healthier than a business with 3 clients that makes $7K with $4K profit. Remember: revenue is vanity and profit is sanity.

📰 I Want to Read More:

▶️ I’d Prefer to Listen:

How to set an effective pricing strategy for your business

— what are the things to consider and what’s the right path for you and your business?

Episode 3 | The Business BFF Podcast: Undercharging & Overwhelmed

— we break down value-based pricing and how to price with confidence

2. Do a Subscription + Software Spring Clean

One tool here, a new platform there — and suddenly you’re paying for half the internet without even realising. To get a clear picture of where you might be leaking, list out every tool, platform, and plug-in you’re paying for. Look out for sneaky recurring charges, forgotten trials that turned into subscriptions, and tools that might be overlapping. You can also download an Account Transactions Report from Xero, filtered to show your operating expenses for the past 3–6 months (longer, if you’re game) and sift through it.

Be ruthless: cancel or downgrade anything that’s gathering dust, consolidate tools doing the same thing, and explore whether switching to annual billing could bring down your costs. Then, set a reminder to do it all again in a few months’ time. Ok, ok, so it’s not the sexiest task on your to-do list, but it’s one of the easiest ways to boost your profit without needing to earn another cent.

📰 I Want to Read More:

📖 I’d Prefer a Resource

Five Non-Cookie Cutter Ways to Boost Your Business Cash Flow

— strategies tailored to help women-led, service-based businesses boost cash flow like a boss.

 Numbers Deep Dive — try our practical and step-by-step table on Page 7 of the Slay All Day Workbook. It’s free and it’ll help you figure out your profit margin.

3. Know Your Cash Conversion Cycle Like You Know Your Coffee Order

Often growth sucks cash (big time), which means your best defence to growing broke is knowing exactly how long it takes for your business to turn work into money in the bank. That’s your cash conversion cycle (CCC) — a.k.a the number of days between spending money (on suppliers, wages, overheads) and receiving money (from your clients or customers). The longer the cycle? The more cash your business needs to keep everything moving.

Start by mapping out these three key timeframes:

  • How long it takes to deliver your service (from kickoff to completion)
  • How long it takes to invoice (presumably after you finish the work, but not always!)
  • How long clients take to pay (use Xero to run a Receivables Summary Report and a Cash Summary Report monthly. It’ll show you how long invoices are taking to clear, who’s dragging their heels, and how much cash you’re waiting on.)
Are You Growing Broke? Why Scaling Your Business Might Be Shrinking Your Profits (And What to Do About It) | The Women's Accountant

📰 I Want to Read More:

✋ I’d Prefer More Hands-On Help
Want to tighten up those Ts & Cs?This one’s for you:
Business Boundaries and Non-Negotiables		 Book a Bloom & Boom Growth Strategy Session where we help you create an impactful business by design.

4. Adjust Your Packages to Match Your Reality

That dreamy package you designed two years ago, back when your business was smaller, your overheads were lower, and your time was a little more flexible…it might not serve the version of your business (or your life) that exists today.

Maybe what once felt generous or ‘value-packed’ is now run-of-the-mill? Or maybe you’re completely over-delivering and should be charging double? Either way, one of the biggest pitfalls of growing broke is having your business cost you more time, energy, or cash than it’s worth. So how can we protect your profit margins and your peace?

Take some time to reassess what you’re offering and ask: 

  • Am I including services or add-ons that my clients don’t actually need (or don’t even notice)?
  • Are my deliverables clearly scoped, with timelines, responsibilities, and boundaries in place?
  • Are there elements of my service that could be offered at a higher tier, or packaged differently for better efficiency?

Refining your packages doesn’t mean you’re giving less. It means you’re honouring your time, skills, and the sustainability of your business.

📰 I Want to Read More:

📖 I’d Prefer Something Practical
Growing broke might be a sign of an outdated money story that needs fixing: Learn how to tame those stories with the ICTR Method ↗️ Time to check your Scope Creep? Download our free Slay All Day Workbook and skip to Page 11.

The Bottom Line:
Bigger Isn’t Always Better
If It Means Growing Broke

There’s nothing wrong with wanting to grow. But if that growth is coming at the cost of your peace, your profits, or your personal life, it might be time to hit pause and reassess.

Because real success? It’s not about how booked out you are, or how shiny your branding looks. It’s about building something sustainable, profitable, and aligned with the life you’re trying to create.

So if you’re working harder than ever with not much to show for it, take this as your sign to stop and adjust your sails. The good news is we’ve helped plenty of women just like you turn things around — and we’d love to help you do the same!

Book a Slice of Advice
and let’s make sure
your growth ain’t broke:

Book Now