Ep. 239 - This Kills Profits

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The Fastest Way to Increase Profit (Without More Sales)

In this episode of Thriving in Tandem, Robert and Kay Lee Fukui tackle one of the most misunderstood—and most powerful—levers in business: profitability. Many business owners assume the only way to improve the bottom line is to sell more, but this conversation flips that belief on its head. Drawing from real client stories, they reveal how growing revenue can actually shrink profits when pricing and expenses aren’t managed intentionally.

The heart of the episode centers on pricing—specifically why most entrepreneurs underprice their products and services. Robert walks through the most common pricing mistakes (cost-plus pricing, competitor-based pricing, and penetration pricing) and explains why none of them account for true value. Using everyday examples and a powerful auction story, they unpack the psychology of pricing and show how price communicates value, trust, and credibility to your customers.

Finally, they connect profitability to what matters most at home. When margins are thin, stress goes up, hours increase, and marriage pays the price. Healthy profit margins create margin in life—allowing business owners to reinvest, reclaim time, and reduce pressure on the family. The episode ends with a simple, practical assignment to calculate whether your business is hitting the 15% net profit benchmark—and how small pricing adjustments can create immediate relief.

Key Takeaways

• More sales don’t guarantee more profit
  Revenue can increase while profit margins shrink if pricing and expenses aren’t managed intentionally.

• Your price sends a psychological signal
  Pricing communicates value and credibility. Underpricing often creates skepticism—not loyalty.

• The most common pricing strategies are flawed
  Cost-plus, competitor-based, and penetration pricing ignore the true value you deliver.

• 15% net profit is the minimum target
  After paying yourself and all expenses, your business should retain at least 15% of revenue as net profit.

• Raising prices is the fastest way to grow profit
  Price increases go straight to the bottom line without adding marketing costs, staff, or hours.
  Underpricing creates stress at home
  Thin margins force longer hours and constant hustle—stealing time, energy, and peace from your marriage.

• Small price increases can have massive impact
  A 5–10% average price increase can be enough to restore healthy margins.