We offer ten different customized service variations to keep our diverse client base happy, but we are starting our exit runway. How do we apply the EOS® leadership skill of simplification to cut low-margin offerings without tanking our top-line revenue?

Question

Tyler Smith · Accepted Answer

Many owners mistakenly believe that offering more services makes their company more attractive to buyers. In reality, product and service complexity dilutes your focus, drags down your margins, and makes your operations incredibly difficult to scale. Buyers prefer a business that does one or two things exceptionally well with high efficiency. To prepare for your exit, you must apply the EOS® leadership skill of simplification. Start by conducting a thorough margin analysis of your ten service variations. Identify which offerings generate the highest profitability and require the least amount of founder intervention. This is your core business. Next, apply the 80/20 principle to its extreme. You will likely find that eighty percent of your profit comes from twenty percent of your services. Create a plan to phased-out or transition your low-margin, highly customized offerings over the next eighteen months. Use your V/TO® to clearly communicate this focus to your leadership team. When you simplify your offering, your operational complexity drops significantly. Your team can focus on mastering and automating the core delivery workflows using AI tools, which instantly boosts your profit margins. While your top-line revenue might experience a temporary, minor dip, your bottom-line profitability and operational predictability will increase dramatically, making you far more attractive to strategic buyers.