Discounted offers are still earning full commissions—so margin shrinks.
If you’ve built a sales team to help scale your service business, you’ve already made a smart move. Delegating sales frees up your time, drives revenue, and lets you focus on leadership and long-term strategy. But at the $1–5M level, many founders start to notice something that doesn’t quite add up.
Revenue looks strong. The pipeline is active. Deals are closing. And yet… profit feels thinner than expected.
It’s not always easy to pinpoint the issue. You’re paying commissions based on the plan you put in place when the team started. But now the business has grown. The offers have changed. Delivery looks different. And when you start to trace where the money goes, you realize something’s off.
Incentives are driving sales—but they’re not driving profitability.
This is one of the most common hidden issues we see during Financial Wellness Assessments. Not because founders are careless, but because incentive structures often get built early—then left untouched, even as the business model evolves.
Why Volume Isn’t Enough
It’s easy to assume that more sales equals more profit. But as you grow, not all revenue is created equal.
Some offers are lean and scalable. Others are custom and labor-intensive. Some sales close quickly and collect easily. Others require deep fulfillment, additional team involvement, or longer timelines that strain capacity.
If your sales team is earning the same commission rate regardless of what they sell—or whether that revenue actually lands in the bank—there’s a disconnect between effort and impact. That’s not a reflection of their performance. It’s a signal that your comp plan may no longer be aligned with your goals.
This misalignment often creates quiet friction inside the business. Delivery teams are stretched thin by what’s being sold. Margins suffer as commissions are paid out before cash is collected. Sales are happening—but not necessarily supporting your strategic growth.
Where Commissions Quietly Erode Margin
Here’s where things tend to break down. And it’s often below the surface of what standard reports will show:
Commissions are paid on proposal, not collection—so cash flow suffers.
Salespeople focus on legacy offers that feel familiar—but no longer serve the business.
Fulfillment costs have shifted—but commission rates haven’t.
Compensation plans reward volume—but not sustainability or client fit.
Individually, these might not seem catastrophic. But layered together, month after month, they become a drag on profitability—and a source of frustration for the founder who’s working hard to hold all the pieces together.
And here’s the challenge: your bookkeeper likely won’t catch this. Your P&L just shows a “commissions” line. It won’t show you whether the dollars you’re paying out are aligned with profit, delivery effort, or strategic priorities.
This isn’t about micromanaging your team. It’s about giving them (and you) a smarter system to work within.
The Role of Compensation in Sustainable Growth
Compensation isn’t just a way to reward performance. It’s a leadership tool.
It sets the tone for what matters. It shapes behavior. And it protects your margins—if it’s built intentionally.
When we support founders through a Financial Wellness Assessment, we bring a strategic, forensic lens to their current comp structure. We don’t just ask, “How much are you paying?” We ask, “Is what you’re paying helping you move the business forward?”
In some cases, that looks like tying commissions to collected revenue instead of sales booked. In others, it means scaling rates by offer type, complexity, or client lifetime value. We’ve helped clients create flexible bonus structures that reward both volume and strategic alignment—so their team stays motivated and the business stays protected.
Founders love this work because it doesn’t ask them to become compensation experts. It simply gives them the clarity to lead with confidence.
Leadership That Doesn’t Leave Money on the Table
If something in this post rings true, it means you’ve built something worth refining.
You’ve already taken the step of growing a team. Now it’s time to make sure the systems supporting that team are designed for where your business is headed—not where it started.
At TK Solutions, we help founders see the real impact of their compensation systems—on margin, behavior, delivery, and sustainability. We don’t offer a one-size-fits-all playbook. We help you build the version that fits your goals, your model, and your next season of growth.
If your current compensation plan is creating more questions than clarity, let’s take a closer look—together.
Book your Alignment & Opportunity Call today to see if the Financial Wellness Assessment is the right next step. We’ll help you strengthen the foundation of your business so your next hire, next launch, and next season all build toward profit—not pressure.
Let’s make sure every incentive in your business moves you closer to where you want to go.
