Why Most Growing Companies Don’t Actually Know Their Margins

Ask most leaders for their margin, and they’ll give you a number. Ask them how that number was calculated, and you’ll get a guess. Margin is one of the most critical indicators of a company’s health, yet it’s also one of the most misunderstood—and most inconsistently measured. In early- and growth-stage companies especially, what’s presented as “margin” often isn’t margin at all.

This gap isn’t caused by laziness or a lack of intelligence. It’s a structural issue. When a business grows fast, its financial systems rarely grow with it. Costs get buried, reporting becomes inconsistent, and teams make decisions based on incomplete information. Leaders are left with numbers that look right until they become the reason things go wrong. Margin erodes slowly, quietly, in the background—until suddenly it becomes the biggest barrier to scale.

True margin discipline requires more than reviewing a P&L.

It demands clean data, consistent categorization, honest cost allocation, and a willingness to confront the story the numbers are actually telling. When you understand your real margins—by product, customer, service line, and channel—you gain a power most growing companies never reach: the ability to make decisions with precision instead of instinct.

This is where strategic finance earns its value. With accurate margins, leaders can price properly, invest with confidence, eliminate waste, and allocate resources where they produce the highest return. Teams stop reacting to last month’s results and start shaping the next quarter’s outcomes. The business becomes intentional instead of accidental.

At Francis Royce, we see margin clarity as one of the most transformative steps a company can take. When leaders finally see their true profitability, the conversation shifts. Strategy sharpens. Performance improves. And the path to scale—once murky—becomes unmistakably clear.

You deserve to know your margins. Not the guess, not the version the software spits out—the truth. And once you have that clarity, everything else becomes easier.