Mike AndesFounder, Augusta Lawn Care and Homeworks · Founder of Homeworks and Augusta Lawn Care

Your Profits Are Getting Cut In Half 😡

14 Apr 2026 · 1 min

Watch on YouTube

1:29

In this video, Mike Andes warns business owners that inflation is silently eroding their profit margins. He explains that a typical 10% net‑profit business loses roughly half of its profit each year when faced with a 5% annual inflation rate because core expenses—fuel, labor, insurance, software, trucks, rent—rise in tandem. Andes illustrates the point with a simple $1 million revenue example, showing how a 5% cost increase consumes $50,000 of a $100,000 profit. He then highlights wage inflation, noting that entry‑level hourly wages for command‑center staff have risen from $14 in 2019 to $22 today—a 57% increase—further squeezing margins. The core message is that failing to raise prices means owners are effectively surrendering profits to rising costs, not out of kindness but due to self‑deception about their margins.

Chapters

Inflation already raised your prices. You just pretended that it didn't. Fuel, labor, insurance, software, trucks, all of that's gone up massively. And not raising prices, it's not that you're kind when you don't raise prices. It's lying to yourself about your margins. If you have a 10% profit margin business, which means on $1 million in revenue, you make $100,000 in profit. That's 10% profit. If there's inflation of of 5%, which on average the past 5 years, we've had about 5% inflation, meaning that things go up in price. Your fuel, your insurance, your labor, all of that. On average, let's say it goes up 5%, meaning half of your profits got ate away by inflation. If inflation's 5% a year and your net profit margin is 10%, half of your profits are getting eaten away every year just by inflation. In fact, our starting hourly wage for command center back in 2019, 2020 was $14 an hour. So it was before COVID so 2019. That's about 5, 6 years ago. Now the base pay, the starting wage entry level is $22 an hour. That is a 57% increase in just wages, let alone rent and insurance and everything else that goes into running a business. All of these things basically almost doubled the cost of labor per hour. And so if your prices aren't going up, you're simply relinquishing all of your profits to inflation because the cost of everything continues to rise whether or not you increase your prices.