Growing an FM business isn’t hard. Growing a profitable FM business - one where margin improves as revenue scales - that’s a different problem entirely.
This business was delivering £9M of work. After costs, tax, and everything else, it kept £19k. Four years later, same business, same sector — £1.1M in profit.
Andrew Lynch had a front row seat to this transformation, and the full account is worth reading.
Lynch joined an FM business in 2016 as their finance lead. Cleaning, security, reception, maintenance — fixed-price contracts across the UK. Revenue was growing. Clients stayed. Delivery was solid.
But profit was almost nonexistent.
The problem wasn’t the work. It was visibility.
From the finance seat, Lynch could see what the owners couldn’t: no one knew what anything cost.
Invoices arriving by post, sitting on desks, waiting for signatures. PO numbers that didn’t exist. Costs processed for work nobody recognised.
The business was running £9M of operations in the dark.
His response was methodical:
Step 1: Get accurate financials.
Cleared the invoice backlog. Built PO request forms. Stopped paying suppliers without PO numbers. Created automated dashboards for every contract.
It took four to six months. By the end, they could track performance across the whole business.
Step 2: Stop the leakage.
Every contract had different scope boundaries. Hand towels in one, excluded in another. Carpet cleaning was billed separately here, absorbed into the fixed fee there. The business was doing the work. It wasn’t always charging for it.
Lynch’s team pulled every contract. They documented what was in-scope, confirmed with managers, and started billing for work they’d been absorbing.
Step 3: Build real budgets.
With clean data, they could plan. Line-by-line reviews with every contract manager. Fixed fees, labour, subcontractors — checked against actuals. Questions answered, responsibility assigned, targets understood.
2016 result: £12.1M revenue. £197k profit after tax.
Ten times the profit of the prior year.
They now had something most Soft FM businesses of their size never get: contract-level profitability data they could actually trust.
It enabled them to make the decision that changed everything.
Here’s what Lynch describes next:
“We knew which of our existing contracts were the most profitable, so we could go after more like those. We could be more discerning in what we decided to bid for, rather than chasing any opportunity we found.”
Before the financial work, every bid looked like an opportunity. Bid for everything. Revenue is revenue.
After it, some bids looked like profitable contracts, and some didn’t. Bid for what matches the profitable pattern. Everything else is a distraction.
The business stopped chasing opportunities that didn’t fit.
They didn’t need every contract anymore. They needed the right ones.
Revenue doubled over the next three years — £12M to £21M. Profit moved from £197k to £1.1M. Gross margin improved year-on-year.
The business focused on winning the right work.
The decision most operators avoid
Most Soft FM operators get some version of the data. Contract margin reports. Win/loss tracking. A spreadsheet that shows which clients are profitable.
They just don’t act on it.
They keep bidding for everything that comes in. Revenue feels necessary. Saying no feels like a risk. And the idea of walking away from any opportunity — before you know you’ve won it — feels impossible.
Lynch’s business proved the opposite.
Being selective didn’t shrink the pipeline. It focused on work worth winning.
Your next move
Sort your last 12 months of contracts by margin.
You don’t need perfect data. Use whatever profitability view you have.
Then ask:
Which five contracts were most profitable?
What do they have in common — client type, scope, structure, pricing?
Which five were least profitable?
Why did you bid for them?
Then make the decision Lynch made: for the next 90 days, don’t bid for anything that doesn’t look like the top five.
Not “try to be more selective.” Not “focus on better clients.” An actual filter. If it doesn’t match the profitable pattern, you don’t bid.
Financial discipline gives you the data.
Commercial discipline decides what to do with it.
The data won’t save you. What you do with it will.
Matt Harris
The Growth Lab
That’s all for this week.
If you’re facing profitability stagnation, this is the decision you need to make next.
Three ways to move forward:
#1: Diagnose your ICP clarity 📋 Book a 30-minute ICP & Value Prop Diagnostic. We’ll map who you’re selling to, who you should be selling to, and what’s keeping growth stuck. 👉🏾 Book here
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#3: Fix this systematically 🎯 Work with me as a Growth Partner. We’ll reset your ICP, rebuild your value proposition, and systemise how you win construction, housing, and property services contracts. 👉🏾 Learn more here
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