You’re about to do it again. Sit down with a spreadsheet, set a revenue goal for 2026 (“Let’s hit $1.2 million!”), break it down by quarter, maybe add some marketing tactics, call it a business plan, and feel accomplished. By March, that plan will be in a drawer, forgotten. By June, you’ll wonder why you’re working harder but not making more money. By December 2026, you’ll be right back here, setting another revenue goal that won’t change anything.
Every December, business owners create plans. Every January, they feel motivated. Every March, reality hits. The plan assumed everything would go smoothly. It didn’t account for the client who didn’t pay, the employee who quit, the supplier who raised prices, or the thousand other things that actually determine whether you make money. So the plan becomes irrelevant, and you go back to reacting instead of planning.
Here’s the real problem. Traditional business plans fail because they focus on the wrong goal. They ask “How much revenue do we want?” instead of “How much profit do we need?” Revenue is a vanity metric. Profit is what pays your mortgage. A business doing $800,000 at 25% profit makes more money and requires less stress than a business doing $1.2 million at 10% profit. But most 2026 business plans will set revenue goals without ever calculating profit goals.
You have three weeks to get this right. If you set a revenue goal without a profit plan, you’re setting yourself up for another year of working harder for the same take-home pay. Maybe less.
The Profit-First Planning Alternative
I’m Ryan Herrst with Media Ace Advisors. I’m a Certified Profit Advisor and author of “Profit Foundation.” I help service business owners earning $250,000 to $5 million annually plan for profit first, revenue second. December is when I have the most conversations with frustrated business owners who just finished another year where revenue grew but profit stayed flat.
I’ve reviewed hundreds of business plans over the years. The ones that fail all have the same structure. Revenue goal at the top. Marketing tactics in the middle. Maybe some expense projections. What’s missing? Any focus on the seven levers that actually determine profit. Traditional business plans are revenue plans dressed up as business plans. They tell you how to grow. They don’t tell you how to keep more of what you make.
The alternative approach starts with a different question. Not “How much revenue do I want?” but “How much profit do I need to take home to make this business worth running?” Then you work backward. If you need $150,000 take-home and your industry standard profit margin is 25%, you need $600,000 revenue. But here’s the key. You don’t just chase $600,000 in revenue. You build a plan around the seven profit levers that will get you to 25% margins, THEN scale revenue.
My father taught me “All because you can, doesn’t mean you should.” Just because you CAN set a revenue goal doesn’t mean you SHOULD, especially if you haven’t figured out how to keep the profit. Profit-first planning is about building a business that supports your life, not consumes it.
Every business has seven profit levers. Leads, conversion rate, transaction size, purchase frequency, profit margins, customer retention, and referrals. Most business plans only address one lever (leads, which means get more customers). Profit-first planning addresses all seven. The result? When you improve all seven levers by just 10%, you create 94% revenue growth and 156% profit growth. That’s not a revenue plan. That’s a profit plan.
Why Traditional Business Plans Fail (The Three Fatal Flaws)
Let me show you the three reasons most 2026 business plans will be abandoned by March.
Fatal Flaw #1: They Start With Revenue, Not Profit
Here’s how most planning sessions go. “We did $850,000 this year. Let’s shoot for $1 million next year. That’s 18% growth. Sounds good.” Then they break it down by quarter, add some marketing tactics, and call it done. What they never asked: “What’s our current profit margin? What should it be? How much do we actually need to take home?”
Here’s what happens when you chase revenue without protecting profit. A business owner sets a goal to grow from $720,000 to $900,000 in revenue. They hit the goal. They’re thrilled. Then they look at their actual take-home pay. Last year they took home $108,000 (15% profit margin). This year they took home $99,000 (11% profit margin). They grew revenue by 25% and their income went down by $9,000. Why? Because their profit margin dropped as they scaled. They added overhead costs faster than they added profit. Their plan focused on revenue growth. It never addressed margin protection. They won the revenue game and lost the profit game.
This happens all the time. Business owners celebrate hitting revenue targets while their bank accounts tell a different story. Revenue growth without profit planning is just buying yourself a more expensive job.
Fatal Flaw #2: They’re Created Then Ignored
Traditional business plans take hours to create and minutes to abandon. You sit down in December, map out the year, print it out, maybe even bind it. Then January happens. A key employee quits. A major client delays payment. A supplier raises prices. Your plan assumed none of this would happen. So the plan becomes irrelevant. You stop looking at it. By March, it’s in a drawer.
The problem isn’t that things changed. The problem is that the plan was too rigid to adapt. It had revenue targets and marketing tactics, but no system for making decisions when reality doesn’t match projections. Profit-first planning is different. It focuses on levers you can adjust in real time. If lead generation slows, you improve conversion. If conversion drops, you increase transaction size. The plan is a living system, not a static document.
Fatal Flaw #3: They Focus on Addition, Not Multiplication
Traditional plans are additive. “Let’s add 20% more leads. Let’s add a new service. Let’s add another marketing channel.” Everything is about adding. But profit doesn’t come from addition. It comes from multiplication. When you improve all seven profit levers by 10%, the compound effect creates 94% revenue growth and 156% profit growth. That’s multiplication.
Here’s the math. If you only focus on leads (addition), you get linear growth. 10% more leads equals 10% more revenue. But when you improve leads AND conversion AND transaction size AND frequency AND margins AND retention AND referrals by 10% each, the levers multiply each other. That’s exponential growth. Traditional plans don’t account for this. They treat each tactic as separate. Profit-first planning treats the levers as a system.
The Profit-First Planning Framework (7 Levers)
Here’s how to plan 2026 differently. Instead of starting with “How much revenue do we want?” start with “How much profit do we need?” Then build your plan around the seven levers that determine profit.
Lever 1: Leads. How many potential customers do you need in your pipeline? Most plans stop here. You’re just getting started.
Lever 2: Conversion Rate. What percentage of leads become customers? If you’re converting 20% now, can you get to 25% by improving your sales process? That’s a 25% revenue increase without spending more on marketing.
Lever 3: Transaction Size. How much does each customer spend? Can you bundle services to increase average sale from $1,000 to $1,200? That’s a 20% revenue increase without adding a single new customer.
Lever 4: Purchase Frequency. How often do customers buy? Can you get them to purchase 4 times per year instead of 3? That’s a 33% revenue increase from your existing customer base.
Lever 5: Profit Margins. What percentage of revenue do you keep after costs? Can you cut 10% from overhead or raise prices 8%? Either move can double your profit without touching top-line revenue.
Lever 6: Customer Retention. How many customers stay with you year over year? Going from 70% retention to 85% means you stop replacing 15% of your customer base every year. That’s pure profit growth.
Lever 7: Referrals. How many new customers come from existing customer recommendations? Referrals cost nothing to acquire and close at higher rates.
Your 2026 business plan should have specific goals for each lever. Not just “get more leads.” But “improve leads by 10%, conversion by 10%, transaction size by 10%…” When all seven levers improve by just 10%, the multiplying effect creates 94% revenue growth and 156% profit growth.
That’s not a revenue plan. That’s a profit plan.
How to Actually Create Your 2026 Profit-First Plan
Here’s the step-by-step process for December:
Step 1: Calculate Your Profit Need (Not Revenue Want). Start with the question: “How much do I need to take home in 2026 to make this business worth running?” Let’s say $150,000. If your industry standard profit margin is 25%, you need $600,000 in revenue to hit that take-home. Now you have a real target. Not “let’s grow 20%” but “I need $600K at 25% margins to take home $150K.”
Step 2: Audit Your Current Seven Levers. Where are you today on each lever? How many leads last month? What’s your conversion rate? Average transaction size? Purchase frequency? Profit margin? Retention rate? Referral count? You can’t improve what you don’t measure.
Step 3: Identify Your Biggest Opportunity. Which lever has the most gap between where you are and where you should be? If you’re converting 15% when industry standard is 30%, that’s your biggest leak. Fix that first.
Step 4: Set 10% Improvement Goals for Each Lever. Pick one lever per quarter. Q1: Improve conversion from 15% to 17%. Q2: Increase transaction size from $1,000 to $1,100. Q3: Boost retention from 70% to 77%. Q4: Generate referrals from 2 per month to 3 per month. By Q4, all seven levers are 10% better. That compounds into massive profit growth.
Step 5: Build Your Action Plan Around Levers, Not Tactics. Traditional plans list tactics. “Run Facebook ads. Send email campaigns.” Profit-first plans list lever improvements. “Improve conversion by implementing sales script, sending follow-up sequence, and creating urgency offer.” Every action ties to a specific lever.
This is how you plan 2026 for profit, not just revenue.
Why December Matters
You have three weeks before everyone in your industry sets their 2026 goals. Most of them will set revenue goals. They’ll chase growth without fixing profit. By March, they’ll be frustrated. By June, they’ll be exhausted. By December 2026, they’ll be right back here, setting another revenue goal that won’t change anything.
You can be different. You can set profit goals first, then build a plan around the seven levers that actually create profit. You can work less in 2026 and make more. But you have to get the planning right in December.
A business doing $500,000 at 30% profit makes more money and requires less work than a business doing $800,000 at 12% profit. The $500K owner takes home $150,000. The $800K owner takes home $96,000 and works twice as hard. Traditional business planning pushes you toward $800K at 12%. Profit-first planning gets you to $500K at 30%.
Fix your plan first. Then grow strategically.
Plan Your 2026 Profit Strategy (Free Planning Session)
I’m currently interviewing service business owners for the second edition of “Profit Foundation,” my book on profit strategies. During these 45-minute conversations, I walk through the 7-Step Pathway to Profit and help you identify which levers have the biggest opportunity in your 2026 plan.
It’s a research conversation for the book, not a business pitch. I share what I’m learning about profit-first planning across different industries. Most people walk away with two or three specific opportunities to build into their 2026 plan before year-end.
If you’d like to participate and receive a free copy of the book when it’s published, you can schedule here: https://mediaaceadvisors.com/contact/
There’s no cost and no sales pitch. These are real research conversations. I’ll show you your seven levers, you’ll see which one to focus on first in 2026, and I’ll get insights for the book. December slots are filling as business owners finalize year-end planning.
Stop planning for revenue. Start planning for profit.
About the Author:
I’m Ryan Herrst with Media Ace Advisors. I help service business owners (annual revenue $250K-$5M, 10 or fewer employees) plan for profit first and revenue second. My approach focuses on the 7-Step Pathway to Profit system that creates sustainable growth without the burnout that comes from chasing revenue goals.