Video Posted: August 13, 2025
My goal in this conversation is to get you thinking strategically about how to make your business more profitable, how to pull more money out of the business, and how to maximize value when you go to sell. If you can sell for maximum value and accumulate more money along the way, you make yourself bulletproof.
You know what money is, but do you really know what money isn’t? In this article, I want to explore ways to maximize the value of your business. If you’re open to that, take some notes because these ideas can change how you think about profitability.
We all have a game in motion. Running a business is like playing chess. Every day, you’re repeating the core actions of your business. But if you’re always working in the business, you can’t see the big picture. When you step back and work on the business, patterns emerge and new strategies become clear.
Over 35 years of running my own business Smallwood Wealth Management, I’ve learned which metrics really move the needle. Too many owners don’t fully understand their profit and loss statement. Even if you’re not the CEO, if you adopt an ownership mentality and can demonstrate value—through numbers and outcomes—you create unlimited opportunity.
One of the resources that shaped my thinking is Dan Sullivan’s. His collaborator, Benjamin Hardy, has written books like 10x Is Easier Than 2x and Who Not How. Both emphasize surrounding yourself with the right team so you can focus on the activities that really matter.
As business owners, we often get stuck doing tasks that could be delegated to someone who loves that work. When you’re bogged down, you lose sight of your business, and you risk hating the very thing you built. I hear it all the time: “I’m on the treadmill, I’m tired, I’m bored, I have to sell.” Too often, people sell at the wrong time—when they’re exhausted and the business isn’t as profitable as it could be. The smarter move is to re-engineer profitability first.
Let’s imagine a company with $13 million in gross receipts and $6 million in cost of goods sold, leaving $8 million in gross profit. After salaries, rents, benefits, depreciation, and other expenses, the business nets $2 million. That might sound strong—but what’s it really worth?
Valuation depends on your industry code and metrics, but in this example, the company could be worth around $14 million. That seems great until you compare it to the owner’s lifestyle. If the owner is used to making $2.6 million annually and then sells for $14 million, the math doesn’t hold up. With a 4% withdrawal rate, $14 million generates $560,000—a big drop from $2.6 million. The key is to take more money out of the business along the way, not just at the end.
The first step is analyzing how you generate revenue. If you complete 5,000 transactions a year at an average of $2,600 each, that’s your $13 million. Now, raise prices by just 5%. Suddenly your average ticket is $2,730. That simple move generates $650,000 more in gross revenue. At a 7x multiple, that adds $4.5 million in business valuation. One small change, massive impact.
Next, look at purchase frequency. If those same 5,000 transactions become 5,250 through auto-refills or subscriptions, you add another $687,000 in gross revenue. I’ve seen gyms and fitness studios do this brilliantly—charge $90 every two weeks instead of $100 per month. Clients see $90 instead of $100, but the business collects $180 a month. These little tweaks in frequency create massive long-term profitability.
I’ve even seen this with a client in the wedding photography space. Instead of just selling digital images, they packaged beautifully designed photo books and framed prints. People paid handsomely because they didn’t want the hassle of curating photos themselves. Think about your own business—what complementary products or services could you add to increase the lifetime value of each client?
Now let’s consider cost of goods. If you spend $6 million annually and reduce that by 3% through better terms or smarter purchasing, that’s $180,000 straight to the bottom line. I often advise business owners to put someone on their team fully in charge of vendor relationships. Give them incentives to negotiate better terms and manage costs as if they were their own business. A small reduction compounds when multiplied over years of revenue.
Compensation structure is another overlooked area. If you pay yourself $600,000 in salary, everything above the Social Security wage base triggers extra Medicare taxes. Shifting part of that to profit distributions can save significant money, while still meeting IRS reasonable compensation rules. Those savings could fund retirement plans, be reinvested in the business, or even help you buy a new office building.
Real estate is one of the smartest wealth moves for owners. I’ve worked with clients paying $420,000 a year in rent for warehouse space. Fifteen years later, that’s millions in someone else’s pocket. What if you bought the building instead? You’d own an appreciating asset, capture depreciation benefits, and at the end of your career, you could sell both the business and the building—or keep the property and collect rent as a retirement income stream. I did this myself. Buying our office changed everything: not only did it eliminate rent, but the visibility from the location brought in new clients.
Depreciation strategies also matter. Business owners can deduct large portions of vehicle purchases, equipment, and other assets. A 6,000-pound vehicle, for example, can be written off under accelerated depreciation rules. I’ve seen people lease luxury cars strategically, lower their tax burden, and even flip them for a profit. With smart planning, even personal goals—like driving your dream car—can be structured in ways that maximize deductions and preserve capital.
Too often, owners put hundreds of thousands into employee benefit plans that don’t actually create retention or value. If $200,000 in contributions only nets you $40,000 personally, rethink the structure. Redirecting funds into real estate, growth investments, or personal wealth-building can yield far greater returns.
Every decision—pricing, cost management, compensation, real estate, benefits—ripples through the business. These aren’t linear moves. They compound and multiply. That’s how you drive long-term profitability and valuation.
I learned this way of thinking back in college, where a professor encouraged me to “think with me” instead of memorizing answers. That mindset shaped how I approach strategy today. Small changes add up to exponential growth.
Profitability is about design. You’ve designed the business you currently have. If you don’t like it, redesign it. With intention, you can increase profits, pull more money out along the way, and build wealth both inside and outside the company.
If this resonates, I encourage you to schedule a Wealth Curve Conversation. It’s a no-cost, no-obligation way to explore how these strategies can fit your unique situation.
Profit doesn’t happen by accident. It happens by design.
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