Grow faster, deliver more, expand your firm’s influence. Every professional services leader wants to crack the code to achieving profitable growth.
Partners, CEOs, CFOs and boards are all looking for ways to win new work and take on bigger client projects while taking home higher margins as a firm. Yet behind closed doors, many leaders admit to being frustrated and “stuck” as they struggle to achieve one goal (or neither) at a time.
In today’s dynamic landscape, in which client expectations, competition, and technology are evolving rapidly, achieving profitable growth can seem elusive. However, when key forces are addressed, profitable growth is very achievable despite external pressures.
This article explores how to pull the right profit levers, measure what matters, and apply strategic growth initiatives for long-term success. Addressing the major forces that create change, while you grow, can transform your professional services firm from stable to standout.
Why growing profitably is harder than ever
Any leader who has tried to grow their business will understand the risk of scaling up: growth often comes with shrinking margins, burnt-out teams, and spreadsheets that don’t add up. In today’s market, growing profitably is harder than ever. Competition is fiercer, clients are savvier, and expectations are sky-high.
Beaton research has shown over the past two decades that clients have come to expect more for less. In this environment, many firms find themselves chasing revenue growth at the expense of sustainable profitability – winning the top line but bleeding from the bottom line. While the business takes on increasingly more work, underused talent, inefficient workflows, and outdated pricing models quietly erode new margins.
Being aware of the environment and potential pitfalls is the first step to transforming your professional services profitability from an aspiration into a competitive advantage.
What is profitable growth?
Before any firm can grow profitably, we need to agree what that means – and importantly, how to measure it.
Let’s start with the basics: profitability and profitable growth aren’t the same thing.
- Profitability describes how well your firm performs from current operations and assets. It’s your ability to generate income above operating costs – the difference between revenue and expenses on your profit and loss statement. Think of it as a snapshot in time. Profitability can change rapidly when operating costs and income change, such as when a firm is scaling up.
- Profitable growth, on the other hand, is a long game. It does not only rely on your firm bringing in more revenue – it requires scaling in a way that also improves margins, boosts efficiency, and builds resilience over time. This is a better outcome than growth for growth’s sake. You need to grow smarter, not just bigger.
Profitable growth is about increasing profits over longer periods than a year. This will grow revenue and improve profit margins. Profitable growth is a more desirable outcome than growth for growth's sake.
Growth without profitability is just more work for less reward. Real success lies in expanding your top line while also improving efficiency, leverage and margins.
The profit and growth formula: What it takes
As outline above, profitable growth is not just about increasing revenue – it’s about how effectively your firm converts that revenue into sustainable profits.
To do this, firms need to address the biggest forces that impact profit and growth. Your profit-growth formula should be a tailored mix of margin discipline, operational efficiency, and scalable strategy that addresses these forces.
Establishing clear growth and profitability KPIs can help you track progress and the health of your operations from the outset. Typical ways to do this might include revenue per partner, utilisation, or margin by service line. You need to ensure that growth isn’t just happening but happening well.
To keep track of the complex dynamics at play, we advise a simple but powerful tool: force field analysis.
Using force field analysis to grow profitably
Originally developed by psychologist Kurt Lewin, force field analysis helps firms assess the factors that support or hinder change – in this case, the ability to achieve profitable growth.
The chart below illustrates a force field analysis for professional services firms’ profitability. It shows 10 key forces at play: five driving forces that promote profitable growth (positioned above the mid-line), and five restraining forces that resist it (positioned below).
In the chart, the five forces driving change (green arrows) balance those forces blocking change (red arrows). This results in a steady state or equilibrium in any given period (grey horizontal line).
When the forces driving change exceed the blocking forces, an organisation can grow and become more profitable.
Apply this analysis to your own firm
This analysis helps to visualise the driving forces (the strategic, cultural, or operational factors pushing your firm toward profitable growth) and the restraining forces (the friction points or barriers that hold you back). In the chart, the five green arrows are the forces driving change, and they balance the forces in red arrows blocking change. This results in a steady state or equilibrium in any given period.
If the blocking forces (red arrows) are stronger, pushing back with change forces (green arrows) to move the equilibrium line will be critical for a firm to succeed at growing profitably. If driving forces (green arrows) are stronger, profitable growth is easier to achieve.
This simple chart offers a framework to prioritise action. That may mean amplifying what’s working or reducing the drag from what’s not. The biggest forces you can modify are discussed below.
10 things that affect growth and profitability
Achieving sustainable and profitable growth requires a deliberate focus on the forces that drive success while mitigating the obstacles that hinder progress. Understanding and applying effort to these 10 forces is essential to achieving both profitability and growth.
1. Focusing on target market and profit levers
High-performing firms don’t chase every opportunity – they focus tightly on the right ones. Success comes from zeroing in on your most profitable market segments and pulling the right profit levers that impact clients in that target market.
Define your ideal client profile and focus. Determine whether your firm will prioritise routine or complex work (our research shows either can succeed, depending on your firm’s capabilities, niche and branding). Emphasise your expertise to differentiate from competitors and attract the right clients, while regularly reviewing your pricing model to match. A laser-sharp market focus allows firms to channel time, talent, and capital into areas with the highest return, setting the foundation for sustainable profitability.
2. Maximising the lifetime value of the ‘right’ customers
One of the most overlooked business development strategies is nurturing the clients you already have. Retaining well-matched clients reduces acquisition costs and creates organic growth through repeat business and referrals. Building a key account management strategy is a helpful (and often necessary) first step.
Long-term, trust-based relationships help boost not just revenue, but pricing power. Clients who recognise your value are more likely to invest in high-margin services. They’re also more likely to cross-purchase additional services from your firm, which can be a key ingredient in profitable growth. Beaton research has found cross-selling can lead to happier, more satisfied clients as they streamline their purchasing and source multiple services from one provider who already knows their business.
In a survey of 36,000 clients, we found that the more services a client used from the same firm, the higher the client rated the firm’s performance. Our findings are illustrated in the chart below and explained in more detail here.
3. Measuring customer satisfaction via market benchmarks
Client feedback is one of your firm’s most valuable strategic assets. Measuring client satisfaction – and benchmarking that against your industry competitors – reveals how your customer base is responding to change in your firm. Growth will get noticed. You need to be able to monitor the market reaction and act swiftly to ensure your clients remain satisfied.
Benchmarking is also the surest way to know which aspects of your service to invest in. It can help pinpoint a competitive advantage for your firm to focus on while growing, taking the guesswork out of improvement initiatives. Participating in annual Beaton Benchmarks helps you assess the effectiveness and client reaction to your new growth strategy over time.
Our benchmarking guide explains more.
4. Tracking growth and profitability KPIs
What gets measured gets managed. Having clear growth and profitability KPIs to measure, share and improve upon will give your team a clear view of direction and performance. When everyone understands how they impact profit and growth outcomes, alignment and accountability naturally follow.
Using dashboards and real-time reporting tools to monitor performance can keep your team accountable and ensure responsiveness. A client feedback survey tool like Beaton Debrief provides client feedback at multiple junctures in a relationship and offers objective feedback straight from the people who pay you. This helps your team pinpoint where their work is excellent or could be improved and provides powerful incentive to drive results.
5. Review your business model - including the role of AI
Your business model efficiency is critical to growing profitably. This means delivering high-value services at sustainable cost, diversifying revenue streams, and pricing accurately based on the value provided.
Firms must also continuously evolve – and leveraging AI for efficiency is now almost essential to keep up with your competitors. Working more efficiently leaves you with more time and resources to create more meaningful value for your clients. Essentially, AI can handle repetitive and mundane work while freeing your team up for more complex human work (as discussed in this article). Whether streamlining admin or automating analysis, AI can significantly enhance margins.
First though, ensure your team is educated about the risks and follows a clear AI governance policy (example AI governance policy used by Beaton is here).
6. Understand and navigate Porter’s five forces of competition
According to Michael Porter, a renowned business strategy academic at Harvard, there are five forces impacting competition in business. We list these all together as contributing to the force of competition. These are:
(a) supplier power
(b) buyer power
(c) competitive rivalry
(d) the threat of new entrants to the market
(e) the threat of substitution (the extent to which different products or services can be used in place of your own).
These forces shape how firms compete and whether they can command premium pricing or not.
In highly competitive environments, profit levers like differentiation, innovation, and cost control become essential to maintain sustainable profitability. Benchmarking is useful in this situation to discover your firm’s competitive advantage and guide business growth. As business academic Dr Richard Speed explains:
“Customer benchmarking allows differences between competitors in the eyes of customers to be established. Where these differences align with customer preferences and behavioural intentions, they represent a competitive advantage.” Read his full analysis in this downloadable whitepaper on benchmarking and business growth.
7. Ensure buy in to the purpose of profit
Sustaining long-term profitability isn’t just a finance metric; it becomes a mindset for the entire organisation. When team members don’t understand or buy into profit and growth goals, firms struggle with misalignment, wasted effort, and poor decision-making.
Creating a shared commitment to the firm’s profit and growth formula is vital for cultural and financial success. Clearly communicating the strategy plus everyone’s role in delivering it, while encouraging accountability and rewarding success through transparent growth and profitability KPIs, are useful to building a culture of profitability.
Customer benchmarking allows differences between competitors in the eyes of customers to be established. Where these differences align with customer preferences and behavioural intentions, they represent a competitive advantage.
8. Avoid the trap of increasing output for the 'wrong' customers
Not all revenue is good revenue. Poor-fit clients can stretch your team, lower morale, and often deliver razor-thin margins. They’re also more likely to churn, creating ongoing costs to replace them.
To protect business model efficiency, firms must qualify every new opportunity carefully and invest in relationships that yield long-term value. Establish clear qualification criteria before onboarding new clients and focus business development and marketing efforts on ideal-fit client personas. Your key account management strategy might include having tiered service options to serve lower-margin clients efficiently. Remember, you can always proactively phase out unprofitable clients without harming cash flow.
9. De-commoditise your service mix
Commoditised services lead to one thing: price pressure. When clients can’t tell the difference between firms, they often default to the cheapest option. This squeezes margins and erodes professional services profitability.
Avoiding commoditisation means positioning your firm as a trusted advisor, not just a vendor like any other. Your expertise, thought leadership and ability to understand client needs and offer long-term solutions all play a role in this. Craft a compelling value proposition focused on outcomes that solve problems for the client and shift from transactional to advisory services where possible.
Beaton’s Marketing, BD and CRM Effectiveness Report 2025 found a firm’s ability to proactively resolve issues for clients is the most valuable client relationship management activity – with 94 per cent of clients saying this has a strong or significant influence on the relationship.
10. Get the right people on the bus
“Too many wrong people on the bus” refers to the now famous saying of Jim Collins, author of Good to Great. Collins used the metaphor to show that those not culturally aligned with the firm’s vision and growth strategy hold it back.
In hiring, you must ensure you consider both technical skill and cultural fit. And once inside your organisation all employees should have access to ongoing training that supports the firms growth trajectory. Building a high-performance culture requires clear expectations, accountability and measurable outcomes.
Conclusion: Growth is good – only if it’s profitable
In a competitive and rapidly evolving market, professional services firms can no longer rely on growth alone. The firms that thrive are those that pursue profitable growth – scaling strategically, optimising their business models, and leveraging data, technology, and talent with purpose.
By understanding and actively managing the forces that drive and restrain profitability, you can unlock your firm’s unique profit and growth formula – one that delivers not just more work, but better results, stronger margins, and long-term sustainability.
The path to success isn’t about doing everything – it’s about doing the right things, deliberately.
How Beaton can help
At Beaton, we work with professional services firms of all sizes to drive profitable growth.
Our expertise includes:
- Benchmarking services to identify competitive advantages.
- Client feedback programs to track and enhance business strategy outcomes.
- Growth advisory services tailored to your firm’s unique challenges.
Get in touch to see how Beaton can help your firm grow more profitably.