A TEST INSIDE THE INTENSIVE AND MENTORING
Does this move raise your margin, or only your revenue? The margin-first scaling test.
The margin-first scaling test is a decision test Ivanka Menken uses in the Scaling-Is-Subtraction Intensive, a 90-minute session at AUD $1,500 ex GST, and in Cash-Tight Growth Mentoring at AUD $1,500 a month. Founders of $500K to $3M businesses list the scaling moves they are weighing and rank them by their likely effect on gross margin, not revenue. The moves that only add revenue drop down the list, and the stop list gets easier to write.
Send the three moves you are weighingThe whole test, in one line
Does this raise margin,
or only revenue?
THE SAME LIST, TWICE
Rank by revenue, then by margin. Watch what moves.
The moves that climb are the ones that change the price or the margin on every job after them. The ones that sink are usually volume bought with a thinner margin, and they are where the stop list starts.
An example list, not a rule. Tap a move to see why it changes place.
The Margin-First Lens · a framework by Ivanka Menken
THE TEST
Three questions for every move
Ask them in order. A move that fails the first two has to earn its place on the third.
- 1
Does it raise the price of the work, or the margin on it?
- 2
Does it add work you can deliver without adding cost at the same rate?
- 3
If it only adds revenue, what will it cost in cash and attention before any margin arrives?
SOUND FAMILIAR?
When growth is busy but not more profitable
- ×Revenue is up and margin is flat
- ×Every new client seems to cost more to serve
- ×We said yes to work we should have priced higher
- ×I cannot tell which growth idea is worth the effort
- ×Cash gets tighter the more we sell
WHERE IT IS USED
Where the test is used
The same question in three places, so it becomes a habit rather than an exercise.
Gross margin, metric 2, and newest-work price against a year ago, metric 3, are reviewed with Ivanka at month 3 and month 6.
Personable, but straight to the point. Ivanka helps you identify the bottleneck in your business and supports you while you execute on your plan. Every session is a combination of strategy, execution and mindset.
Business owner
FREQUENTLY ASKED
Questions about the margin-first test
What is the margin-first scaling test?
The margin-first scaling test is a simple ranking Ivanka Menken uses with founders: take every scaling move you are weighing and order it by its likely effect on gross margin, not on revenue. Moves that raise price or margin rise to the top. Moves that only add volume sink, and they are usually the first candidates to stop.
Why margin and not revenue?
Because the chain behind most cash pressure starts with price. Thin prices leave thin margins, and growth on thin margins uses cash faster than it brings it in. Ivanka Menken uses the margin-first scaling test to break that chain where it starts, so growth leaves money in the bank rather than taking it out.
How is it used in the 90-minute Intensive?
Before the Scaling-Is-Subtraction Intensive you send your current list of moves and to-dos. In the session Ivanka Menken runs the margin-first scaling test across that list during the signal from noise step, so the stop and keep list you leave with is ordered by margin, and the first irreversible step is a margin move.
How is it used in mentoring?
In Cash-Tight Growth Mentoring and 1:1 Mentoring, Ivanka Menken applies the margin-first scaling test to each fortnight's commitment: does this raise margin, or only revenue? Over six months the answers show up on the monthly scorecard in two numbers, gross margin and the price of your newest work against the same work a year ago.
What if I do not know my margin?
Then that is the first fortnight's work. Ivanka Menken does not need perfect accounts to run the margin-first scaling test, only an honest estimate of what each kind of work costs to deliver. Your accountant can firm up the figures later. A rough margin you watch every month is more useful than an exact one you never look at.
Is it an extra cost?
No. The margin-first scaling test is part of how Ivanka Menken runs the Scaling-Is-Subtraction Intensive, AUD $1,500 ex GST for 90 minutes, and Cash-Tight Growth Mentoring, AUD $1,500 a month ex GST for six months. There is nothing separate to buy, and it never requires sharing your accounts with anyone but your own accountant.