In our last post, we broke down the basics of gross profit and why it’s such a vital number for solopreneurs and small teams. But even when you have a solid handle on your main costs and pricing, it’s surprisingly easy for small expenses to quietly eat away at your gross profit. Stop the leaks.

These hidden “leaks” can happen in any business—whether you sell products, services, or both. The good news? Once you learn where to look, you can start patching these profit drains and protect your margins.

Where Does Gross Profit Leak Away?

1. Unnoticed Supplier Price Increases
If you haven’t checked your supplier invoices lately, now's the time. Vendors may raise prices a little at a time, and those increases slowly eat into your margin unless you adjust your prices or negotiate better deals.

2. Increased Waste or Shrinkage
This could mean more ingredients tossed at the bakery, unused materials in your project business, or wasted billable hours in a service setting. Even “a little here and there” adds up fast.

3. Unbilled Extras in Services
Did you spend extra hours on a client project but forget to charge for them? Or include small add-ons “just to be nice”? When you consistently underbill, you’re cutting directly into your gross profit.

4. Shipping and Fulfillment Surprises
In product businesses, rising shipping costs or packaging changes can sneak in and quietly reduce what you keep from every sale.

Patch the Leaks & Protect Your Profit

Regularly reviewing your true costs—even the small stuff—can make a huge difference. Consider a quick “gross profit checkup” each month:

Compare supplier prices to previous months.
Audit invoices or timesheets for uncharged extras.
Track waste or overages.
Adjust your pricing and processes as needed.

Remember: Knowing your gross profit means more than having the right numbers. It’s about keeping what you earn and building a healthy, resilient business—one where small leaks don’t drain big dreams.

Want more tips on protecting your margins or a checklist for your next profit review? Drop your questions below!

Keep IT Sunny~