Friday, November 06, 2026

Some customers drain you, some fund you, and you can't always tell which. A one-hour grading exercise shows SME owners exactly where their real revenue sits.

Two SME owners can grow revenue by the same 30% in the same year, and end up in completely different positions. One funded that growth from margin — reinvested profit, disciplined cash management. The other funded it from debt — a loan, a line of credit, supplier terms stretched thin. On paper, both grew. In reality, only one of them actually got stronger.

The Enemy: Growth That Looks Identical From the Outside

Revenue growth is the number everyone celebrates — in the industry press, at the awards dinner, on the LinkedIn post. It's also the number that hides everything that matters about how that growth was funded. A business that grows 30% on borrowed money carries new fixed repayments whether or not next year's revenue holds up. A business that grows 30% funded by its own margin discipline has no such obligation hanging over it. Same top-line number. Completely different risk sitting underneath it.

This is where the FMCG and product-based businesses Kevin works with get caught most often: a big new listing or export order looks like unambiguous good news, but funding the stock, the packaging, and the working capital gap between production and payment often means leaning hard on debt or supplier credit — right at the moment the business can least afford a shock.

The Funding Source Audit

Before you take your growth plan to the bank, or before you celebrate the growth you've already booked, run this audit.

1. Trace the source — for every dollar of growth this year, was it funded by retained margin, by new debt, or by stretched supplier and customer terms? Most owners have never actually separated these.

2. Calculate the true cost — debt-funded growth carries an interest cost and a repayment obligation that exists independent of next year's performance. Margin-funded growth carries neither.

3. Stress-test it — if next quarter's revenue dropped 20%, could the business still service what was borrowed to fund this year's growth? If the honest answer is "barely," the growth was more fragile than it looked from the outside.

This isn't an argument against ever using debt to grow — sensible, well-priced debt against a proven opportunity is a legitimate tool. It's an argument against not knowing which kind of growth you're building, because owners who don't know often find out the hard way, in a quarter when revenue softens and the repayments don't.

"I have grown my business 5x since working with Kevin. Everything Kevin told me to do was the complete opposite of what I had been doing. Working with Kevin has truly been a complete game changer."

— Richard, Chem Suppliers

Why This Gets Missed

Growth conversations in SME businesses almost always start and end with revenue, because revenue is the number that's easy to state and easy to compare. Margin discipline and funding source are slower, less glamorous conversations — and they're exactly the conversations that separate businesses that compound in strength year after year from businesses that grow themselves into a cash crisis. Across nine companies of his own and 200+ businesses coached one-on-one, Kevin has seen the pattern hold: the businesses still standing a decade later weren't always the fastest growers. They were the ones that knew exactly what their growth was costing them.

Quick Wins This Month

  • Pull this year's growth number and trace it back to its funding source — margin, debt, or stretched terms.
  • If debt-funded, calculate your repayment obligation as a fixed cost against a 20% revenue drop scenario.
  • Set a target margin-to-debt funding ratio for next year's growth plan, even a rough one — it beats not tracking it at all.

Key Takeaways

  • Trace the funding source behind every dollar of growth — margin, debt, or stretched supplier terms carry very different risk.
  • Calculate the true cost of debt-funded growth before celebrating the top-line number.
  • Stress-test whether the business could service its growth-related obligations through a 20% revenue drop.
  • Use debt deliberately, not by default — the question isn't whether to borrow, it's whether you know you're doing it.

If you're not sure whether this year's growth made your business stronger or just bigger, that's exactly the conversation worth having before you plan next year's.

...and you become the owner who knows what your growth is really costing you.

Thursday, October 22, 2026

54 percent of US business owners have no real plan, and only 11 percent have anything detailed. Here's the one-afternoon exercise that gives your business a sharper three-year direction than any spreadsheet.

Wednesday, October 21, 2026

Before you spend another dollar on ads, staff or software, find the one step that limits your growth. Here is a one-hour spend-gate test you can run this week.

Wednesday, October 21, 2026

ActionCOACH began in Brisbane, Australia. What does its story tell US owners about where good growth ideas come from, and how to test an outside idea in your own business?

Wednesday, October 21, 2026

SME owner confidence is climbing, but for most, revenue isn't following. Here's why time isn't your real constraint, and the three-step framework that finds the one that is.

Wednesday, October 21, 2026

49% of business owners question monthly whether running the business is worth it, a US survey found. Here's what changes when someone else is asking that question with you.

Wednesday, October 21, 2026

Nearly half of NZ SME owners are planning Christmas trading changes, MYOB research found, and most of it is a discount. Here's how to build memory before you build the offer.

Wednesday, October 21, 2026

46% of New Zealand business owners aren't paying themselves, Xero research found. Here's the Profit First fix that changes the order money moves through your business, not the hours you work.

Wednesday, October 21, 2026

The share of businesses reporting serious dead stock has doubled since 2024, new research found. Here's why rising revenue can still mean tightening cash, and the three numbers that catch it early.

Wednesday, October 21, 2026

42% of business owners named efficiency their top 2026 priority, a US survey found. Here's Michalowicz's Clockwork system for building a business that doesn't need you in every decision.

Wednesday, October 21, 2026

B2B win rates fell to 19-21% in 2025. Here's why a quiet Q4 pipeline is usually a budget deadline in disguise, and the three moves that use it instead of waiting for January.

Tuesday, October 20, 2026

Chemical and industrial distributors rarely have a product problem. Here is how to find the real constraint, escape the price war and build a 90-day plan.

Tuesday, October 20, 2026

97% of small business owners believe branding matters to their success — only 18% have an actual strategy for it. Here is the 3-question Brand Key test that closes the gap without a rebrand.

Tuesday, October 20, 2026

Roughly 90 percent of companies never achieve sustained profitable growth. Here's Jim Collins' Hedgehog Concept for telling which growth opportunities are actually worth chasing.

Tuesday, October 20, 2026

68 percent of US Google searches now end with no click at all. Here's what that means for small business marketing, and the fix that doesn't depend on getting the click back.

Tuesday, October 20, 2026

Most strategic plans are tactics with better formatting. Here's the one-sentence test, borrowed from Sinek's Golden Circle, that tells you if yours has a real why behind it.