Bill Canady says your profit numbers are fake. When you blend two different business segments, a high-margin core product and a weaker one, the aggregate metrics hide that the weak segment is dragging you down. Real profit lives in the specific customer buying the specific product.
Profit lives at the intersection of a specific customer buying a specific product. That's the atomic unit. And that's where almost certainly no report on your desk in any month that shows you your business is cut that way. Which means the number you're managing to, 32% gross margin, 8% EBITDA, is a blend. And the blend has 2 entirely different businesses inside it. One of them is excellent. Concentrated customers, core products, high margin. Low touch, predictable. If you owned only that business, you'd be at 15-18% EBITDA, and the sponsor would be delighted.
