5 Ways to Turn Growth Into Sustainable Profit
Breaking through revenue plateaus is a challenge nearly every professional services (PS) firm faces. In an organization’s early years, founders often rely on personal networks to generate business, and for a while, that works.
Eventually, though, those connections reach their limits. The firms that move beyond this phase and into lasting, scalable growth share one key characteristic: they intentionally build for profitability, not just revenue.
In a recent episode of The Professional Services Pursuit podcast, host Brent Trimble sat down with Kennedy Intelligence’s Head of M&A and Strategic Advisory, Ramone Param, and Senior Advisor and Growth Expert, Alex Klein, to discuss how firms can shift from chasing growth to building long-term profit. Their insights outline clear steps for firms determined to cross the $30 million threshold — and maintain success beyond it.
Let’s explore the five most impactful actions you should take to get there:
#1. Build Beyond the Founder’s Network
Many firms reach early revenue milestones by tapping into the founders’ networks. But while this is a strong starting point, it can’t fuel sustained growth. Firms must eventually move from depending on personal contacts to creating a deliberate business development strategy.
This shift requires a cultural change. Business development can’t sit solely on the founder’s shoulders. It needs to be part of the DNA of the firm, with everyone from senior leaders to delivery consultants encouraged to spot opportunities. And the best way to do this? Through strong sales, marketing, and branding.
But as Alex points out, one of the biggest mistakes firms make is waiting too long to build up these functions — especially when it comes to marketing. “By the time their networks dry up and they realize they need a sales and marketing function, it then takes a year to stand one up,” he shares. “It might take you six months to hire the right person.”
His recommendation: hire early, and begin with a marketing manager who understands professional services. When marketing is left to an office manager juggling multiple responsibilities, it rarely gets the attention it needs.
Marketing’s role in professional services is not only to polish a brand but to generate qualified leads that partners and principals can convert into projects. Having the right person in place allows firms to build predictable growth rather than waiting for referrals. With the right resource management solutions, teams can also ensure their efforts scale smoothly.
The takeaway is simple: Firms that invest in building a dedicated growth engine early gain a head start that pays dividends later.
#2. Keep Profitability at the Core
Rising revenue is exciting, but without discipline it can quickly destroy profitability. As Alex explains, “Gross profit really is driven by rates and utilization. Those are your two levers for upping profitability.”
Small firms often underprice their services, either because they feel pressure from larger competitors or because they want to keep clients happy. But this results in them undervaluing their expertise.
The key to success is setting rates that reflect your quality of work and learning the power of saying “no” when clients push for discounts. “Make sure your prices reflect the value you bring and are appropriate compared to the big competitors,” says Alex. Creating pricing policies, or even establishing a formal pricing committee, can help you stay on track during tough negotiations.
Another frequent misstep is staffing too far ahead of demand. A mistake many firms make in their early years is over-hiring in anticipation of growth. But when that growth doesn’t happen, consultants are left on the bench — and profitability starts to shrink.
Ramone added another warning: overreliance on anchor clients. Accepting scope creep, unpaid work, or lower margins to keep one or two major accounts satisfied may seem like a necessary tradeoff. In reality, it creates dependency and squeezes profitability. Diversification provides the flexibility to walk away from projects that don’t align with pricing or margin goals.
“Ultimately, it gives us a lot more flexibility to turn down projects that we don’t want to take, even from existing large client relationships that we have, and pick and choose those projects that are high margin and are priced correctly,” says Ramone.
Remember: Profitability is not a box to check at the end of the year. It’s something that should shape every decision. Firms that consistently price with confidence, maintain healthy utilization, and refuse to compromise their margins are the ones that thrive.
#3. Build a Commercial Mindset
Many consultants aren’t fans of the idea of “selling.” They prefer to be seen as trusted advisors. But in the world of professional services, selling doesn’t have to mean aggressive pitching. Instead, it can refer to publishing high-quality insights, equipping teams to recognize opportunities, and rewarding business development efforts at every level.
Very few consultants are natural sellers or revenue generators. This makes it important for leadership to identify and support individual team member growth and create a structure that encourages greater engagement at every level, from junior consultants to senior-level talent.
One way to do this is by introducing a role that sits between partner and project manager. Principals can own client relationships, freeing partners to focus more on business development.
Incentives also matter. Salary and bonuses alone rarely create a culture of growth, but firms that implement thoughtful incentive structures — whether equity, options, or tailored bonus systems — see stronger commercial behaviors take root across the organization.
Keep in mind that investors look for firms where growth is consistent and commercial skills, like selling, are par for the course. Training in proposal development, negotiation, and pricing is just as important as technical expertise. With the right analytics tools that align incentives to outcomes, firms can connect performance directly to commercial success.
#4. Avoid the Trap of Client Concentration
If more than 20% of your revenue comes from a single client, or if your top three clients account for over half of your revenue, you’re putting your business at serious risk.
To avoid future problems, you need to diversify your client base. Having a broader portfolio not only spreads risk, it also creates leverage. Firms with multiple strong client relationships have the freedom to walk away from low-margin work. This flexibility protects profitability and gives you the ability to choose projects that truly support your growth goals.
#5. Think Ahead to Recurring Revenue
Project-based consulting revenue is generally unpredictable. Investors know it, and founders feel it when cash flow fluctuates. Creating sources of recurring revenue is a powerful way to stabilize growth and increase valuation.
“Anything you can do to show evidence of some degree of long-term recurring revenue, typically through some sort of managed services offering or some sort of software offering or subscription, will go a long way,” says Alex.
Of course, recurring revenue doesn’t mean you need to turn your services business into a software company. While some firms introduce tech-enabled or subscription offerings, others generate recurring income by licensing training programs, proprietary methodologies, or tools that clients use year after year.
As Ramone shares, “I’ve seen businesses enable recurring revenue through licensing a product or a training program. This approach doesn’t even require a software tool but involves proprietary data, methodologies, and training materials implemented within an organization. These can be licensed for a period of one, two, or even three years.”
It all comes down to predictability. Repeatable project structures with existing clients can create steady streams of work when pursued intentionally. Even a modest recurring revenue stream shows sustainability and reduces risk. Investors value it, and founders benefit from the confidence it provides for future investments.
Staying Disciplined
Each action Ramone and Alex shared comes down to one thing: discipline. Firms that sustain growth do not leave success to chance. They create systems, train their people, measure results, and stay consistent, even when it is tough.
Breaking through the $30 million plateau is rare. As Ramone put it, “It’s really less than 1% of consulting and professional services firms that get past that barrier of $30 million in revenue.”
But the path is clear for those willing to commit:
- Build a marketing and sales function early
- Set rates that reflect value and resist unnecessary discounts
- Diversify client portfolios to protect margins and reduce risk
- Train and incentivize teams to embrace business development
- Pursue recurring revenue to stabilize and strengthen growth
By taking a proactive, strategic approach, firms that follow these steps with intention grow stronger, more profitable, and more resilient.
Final Thoughts
Many firms in professional services spend their energy chasing growth. But the firms that find success focus just as much (if not moreso) on profitability, discipline, and sustainability. Because while high-quality work will always attract clients, what matters most is whether firms put the right systems and culture in place to turn that work into lasting profit.
For organizations determined to break through the growth ceiling, the message is clear: stop relying on short-term wins and start investing in the structures that make long-term success possible.
Want to learn more? Listen to the entire conversation on the The Professional Services Pursuit: Turning Growth into Sustainable Profit: What Top Firms Do Differently w/ Alex Klein and Ramone Param