Bill CanadyCEO & Founder, The 80/20 Institute · Be a Great CEO: Learn how to Fix it, Grow it, & Sell it.

Unprofitable Business Is Draining Your Profits! Here's How To Fix It #shorts

1 Sept 2026 · 1 min

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In this short, Bill Canady explains how a loss‑making business unit attached to a profitable one can dramatically lower overall EBITDA—from an expected ~12% down to 8% when the two are averaged. He emphasizes that the financial loss is only part of the problem; the bigger issue is that management’s attention gets spread evenly across both units, forcing leaders to focus on a poorly performing segment and detracting from the growth of the profitable side. The hidden cost, therefore, is the misallocation of managerial resources caused by uneven profit distribution.

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The other one is a business that loses money on nearly every transaction, and it is bolted to the first one and is consuming the first one's capacity to do it. Average them together and you get 8% EBITDA and a board asking reasonably, why isn't it 12%? Now, the cost of not knowing isn't just the money you lose on the bad transactions, although that's real. The larger cost is that you allocate management's attention evenly across the profit, across the business where profit is distributed widely even. The larger cost is that you allocate management's attention evenly across the business where profit is distributed wildly unevenly.