Margin and EBITDA improvement is usually the quickest value driver to move and the one every other improvement is measured against. The work has two halves: raising earnings by fixing pricing, mix and overhead, and making those earnings explainable so that a lender, partner or buyer would accept them on the evidence.
EBITDA, meaning earnings before interest, taxes, depreciation and amortization, is a common shorthand for operating profit in private-company conversations. It is not a measure your accountant prepares for tax, and how it is calculated should be agreed with your CPA.
Where margin usually leaks
In owner-led companies, the leaks tend to be the same handful, and few of them are visible on a year-end income statement.
- Prices set once and never revisited. Costs rise each year; prices often do not.
- Unprofitable work hidden in averages. One service line or customer group carries the others.
- Discounting without rules. Salespeople or the owner discount to close, with no record of how often or how much.
- Unbilled time and materials. Extras done on site that never reach the invoice.
- Overhead that grew with good years. Vehicles, software, space and roles added in a strong year and never reviewed.
- Slow cash. Long receivable days and late deposits that force borrowing and hide the true cost of a job.
Our margin and EBITDA guide sets out how to find each of these in your own numbers.
What is included
- Gross margin analysis by service line, product, customer group and, where the data allows, by job
- A pricing review: list prices, discount patterns and the cost increases since prices were last set
- An overhead review against revenue and against what the company actually needs
- A cash conversion review: receivables, deposits, inventory and work in progress
- An add-back schedule review with your accountant, so normalized earnings are documented
- A margin improvement plan with targets, owners and monthly tracking
A worked illustration
Illustration only, with assumed figures. A company with $5 million in revenue and a 38% gross margin earns $1.9 million of gross profit. Moving gross margin to 41% through repricing and mix, with the same revenue, adds $150,000 of gross profit. If overhead is held flat, nearly all of that reaches EBITDA. If a buyer were ever to apply an assumed 4× multiple, that would be $600,000 of implied value, but multiples are a buyer's and valuator's judgement, and the gain only counts if it is sustained.
Who it is for
Owners whose companies are busy but whose profit does not match the effort; owners who cannot say confidently what the company earns once personal and one-time items are removed; and owners preparing a value-creation plan who need clean numbers to measure it against.
Timeline
- Weeks 1–4: data gathering, margin analysis and pricing review.
- Weeks 4–8: recommendations agreed, first pricing and mix changes made.
- Months 3–12: monthly tracking, overhead decisions and cash-conversion work.
- Ongoing: margins held and reported monthly, with the add-back schedule kept current.
How results are measured
From your own books, monthly: gross margin by service line, overhead as a share of revenue, EBITDA, and receivable days. We agree the baseline before changing anything, so the improvement is a comparison of like with like. Normalized earnings are reconciled with your accountant at each year-end.
Mistakes to avoid
- Cutting capacity to hit a number. Earnings that fall next year because sales or service capacity was cut are worth less, not more.
- A long add-back list. Every add-back invites a question. Fewer, documented add-backs build trust.
- Raising prices without a script. Tell customers what changed and why. Unexplained increases cost more in churn than they gain.
- Measuring yearly. Annual statements arrive too late to steer by. Monthly management accounts are the minimum.
- Mixing personal and company spending. It clouds earnings quality and complicates every later conversation. Your accountant can advise on cleaning it up properly.
Price and how to start
This work is usually a fixed project for the analysis, followed by a retainer for tracking and support, within the ranges on our pricing page, plus GST/HST based on your province (GST and QST in Quebec). We do not give tax or accounting advice; your CPA remains responsible for your statements. To begin, call or text (604) 632-4959, or email Ali@Sedighi.ca with your last two years of revenue and gross margin if you have them to hand. Margin work often pairs well with recurring revenue design.
Frequently asked questions
Is this just cost-cutting?
No. Cutting the wrong costs, such as training, maintenance or sales capacity, often lowers future earnings. Most of the margin we find comes from pricing, mix and job costing, not from squeezing staff or suppliers.
What are add-backs, and why do they matter?
Add-backs are expenses in your books that a new owner would not incur, such as one-time costs or personal expenses run through the company. They matter because a buyer or lender will challenge each one, so they need to be few, documented and agreed with your accountant.
Do you replace our accountant?
No. Your CPA prepares the financial statements and handles tax. We work on the operating decisions behind the numbers and coordinate with your accountant on how results are recorded.
How quickly can margins improve?
Pricing and job-mix changes can show up within one or two quarters. Overhead and structural changes take longer, and the value of any gain depends on holding it for several years.