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01 / THE QUESTION   ·   ALDER & VALE STUDIO

The business grew.
The profit
disappeared.

A fictional 13-person studio increased sales by 20%. Its operating profit dropped $70,000. The founder assumed the business needed another project manager.

THE INSTINCTSpend $95,000 a year on another manager.Our first move: question the hire.
See what the numbers revealed
THE CONTRADICTION / CURRENT YEAR
+20%REVENUE GROWTH
−$70kOPERATING PROFIT CHANGE
Sales: prior → current$1.50m → $1.80m
Profit: prior → current$210k → $140k
The mistake to avoid

Buying capacity before discovering what is consuming it.

ALL COMPANY FACTS AND FIGURES ARE FICTIONAL / FOR DEMONSTRATION ONLY
02 / THE EVIDENCE

Same business.
Different economics.

Conduix would first reconcile the figures, then trace the work consuming margin. These numbers reveal an area to investigate. They do not establish the cause.

Of every $100 in sales, what remains?

Current-year contribution after direct delivery costs. Fixed overhead is separate.

STANDARDIZED WORK60% of revenue · $1.08m in sales
70% direct delivery cost30% contribution
CUSTOM WORK40% of revenue · $720k in sales
90% direct delivery cost10% contribution
Custom work brings in 40% of sales, yet provides only 18.2% of contribution.
WHAT WE WOULD VERIFY

Where is the money really going?

Four explanations fit the symptoms. The financial mix alone cannot tell us which is correct.

Unbilled changesUnderestimated hoursUnprofitable client mixA genuine capacity bottleneck
Before recommending a fix: reconcile ten recent project records, compare estimates with actual hours, and check the effect on customers.
Financial reconciliation: $1.80m sales − $1.404m direct cost − $256k fixed cost = $140k operating profit.Now see what changes ↘
03 / THE MOVE

Make the next move
smaller. Smarter.

Test the scope before hiring.

A reversible eight-week test for selected new custom projects, but only if the project records support the hypothesis.

DELIVERABLE 01 / SCOPE GATE

Make the price boundary visible.

Example: Brand launch / Phase 1

INMessaging, 3 landing pages, 2 review rounds
OUTExtra templates, campaign management, third revision
RULEMaterial changes need written approval before work begins
DELIVERABLE 02 / CHANGE DECISION

Turn a vague request into a choice.

“Could we add two pages before launch?”

$1,500*
12 additional hours × $125 illustrative cost per hour
CHOOSEPaid change / defer / swap out existing work
OWNERClient signs off before delivery
DELIVERABLE 03 / DECISION RULES

Measure before you expand.

Check comparable project margin, unbilled hours, revisions and proposal win rate.

EXPANDMargin improves and client outcomes hold
REVISEEconomics improve but customer friction rises
STOPNo reliable improvement or costs exceed value
DAYS 1–5Reconcile ten jobs
WEEK 2Approve scope rules
WEEKS 3–7Run test and compare
WEEK 8Expand, revise or stop

The service boundary: Conduix provides the initial Decision Brief within five business days and consultation/refinement within the agreed 30-day window. The business owns the eight-week implementation and its results.

These are three examples from the complete 16-page illustrated pack. Read the evidence, alternative explanations, models, and working tools. No reported client outcome is implied.

*All company details and rates are invented for this illustration. Actual interventions require investigation and client approval. No outcome, savings or causality has been verified.