hebel. today · 9 November 202634 / 74
Business · Entrepreneurial Strategy
Scaling requires choosing the right responsibilities
Prioritizing operational margins. Andrés Bilbao of Hermanos Bilbao argues that founders often mistake high revenue for business health, leading to scenarios where companies grow their sales and headcount while margins evaporate. He mandates that…
From 4 newsletters · 1 min read · one thing to try
Prioritizing operational margins. Andrés Bilbao of Hermanos Bilbao argues that founders often mistake high revenue for business health, leading to scenarios where companies grow their sales and headcount while margins evaporate (Hermanos Bilbao). He mandates that founders approve new offers only if they exceed a defined margin floor after accounting for all direct costs and team time, noting that closing $35,000 at a 45% margin yields more profit than $50,000 at 25%.
Accepting structural costs. Acquisition Notes contends that founders must shift their focus from daily enjoyment to the long-term value of the outcomes they produce, as scaling inevitably replaces creative freedom with management and coordination obligations (Acquisition Notes Acquisition Notes…, Acquisition Notes Acquisition Notes…). This perspective suggests that discomfort is a structural necessity of growth rather than a sign of a bad decision, provided the founder evaluates the business by the economic and operational structure it requires instead of the specific activities they personally enjoy.
Synthesis of focus. While Bilbao emphasizes the immediate rejection of low-margin deals to preserve cash flow, Acquisition Notes frames the challenge as a transition in the founder's role where they must accept the cost of the outcome to eliminate the friction of poor execution. Both approaches demand that founders stop romanticizing their initial, smaller-scale work and instead prioritize the specific, often difficult, responsibilities that sustain a larger organization.
- Stephen of Faved learned that growth requires making the value of a product immediately obvious to the user rather than just relying on personal effort (Produced Newsletter).
- Rebecca of Orbit recommends prototyping the single most important screen of a product using AI tools like v0 or Claude Code before building a full website (Vesna Pavlovic from Women Building Businesses).
Try today · 15 min
Calculate the margin of your current deals using the formula: price minus cost minus (hours multiplied by your cost per hour).
List your active offers and deduct direct costs and team time to see which fall below your 40% floor.
You need
- List of active client offers
- Direct costs per offer
- Estimated hours per offer
- Your hourly cost rate
Steps
- Define your minimum margin floor percentage.
- Calculate the profit for each active offer using the formula.
- Identify deals that fall below your floor.
- Increase the price, reduce the scope, or reject the deal for each underperforming offer.