Peak Growth Agency was drowning in debt and losing money on every client. Then they made 5 brutal changes—and became profitable in 90 days.
Agency: Peak Growth Agency Founders: Sarah & David Chen Service: SEO & content marketing Revenue: $900K/year Profit: -$300K (losing money) Situation: On the edge of bankruptcy
How they got here:
Sarah and David started Peak Growth in 2020. They grew fast:
"We thought we were crushing it," Sarah says.
But they had a terrible secret: They were losing money on every client.
The math:
They'd been funding losses with credit cards, business lines of credit, and personal savings.
"In February 2024, we looked at our bank account: $12,000 left," David says. "We had $45,000 in payroll due in 2 weeks. We were done."
The crisis: $300K in debt, burn rate of $25K/month, 6 months of runway left. They had to turn it around or shut down.
Sarah and David hired a business consultant (last-ditch effort).
What he found:
Mistake #1: Terrible pricing
Mistake #2: No client fit
Mistake #3: Overstaffed
Mistake #4: Expensive overhead
Mistake #5: No financial visibility
"We were terrible business owners," Sarah admits. "We were great at SEO but awful at running a business."
Timeline: 90 days to break even, 12 months to profitability
The hard truth: 8 of their 22 clients were losing money.
The decision: Fire them all. Immediately.
The conversations:
"Hi [Client], we're restructuring our service offerings.
Unfortunately, we can't continue at the current pricing.
New rate: $8,000/month (up from $2,000).
If that works, great. If not, we'll help transition to another agency."
Result:
It was terrifying, David says. "But keeping those clients would've bankrupted us in 4 months."
The math: 13 employees at $65K average = $780K/year = too much.
The decision: Lay off 5 people.
Who they kept:
Total: 7 people
Who they let go:
Monthly savings: $27,000
"Worst day of my life," Sarah says. "But it was layoffs or everyone loses their job in 6 months."
Old pricing:
New pricing:
How existing clients responded:
Net result:
"We were terrified they'd all leave," David says. "Most stayed. The ones who left were the problem clients anyway."
What they cut:
| Expense | Before | After | Savings |
|---|---|---|---|
| Office lease | $6,000/mo | $0 (went remote) | $6,000/mo |
| Software (unused tools) | $4,000/mo | $800/mo | $3,200/mo |
| Conferences/events | $3,000/mo | $500/mo | $2,500/mo |
| Marketing/ads | $2,000/mo | $0 (focused on retention) | $2,000/mo |
| Misc (snacks, perks) | $1,500/mo | $200/mo | $1,300/mo |
| Total | $16,500/mo | $1,500/mo | $15,000/mo |
Going remote was the hardest decision.
"We loved our office," Sarah says. "But we loved not going bankrupt more."
What they started doing:
Weekly cash flow meetings
Monthly P&L reviews
Per-client profitability tracking
Monthly financial forecasting
"We were flying blind before," David says. "Now we know exactly where we stand every single week."
| Metric | Before | After 90 days | Change |
|---|---|---|---|
| Revenue | $75K/mo | $66K/mo | -12% |
| Labor costs | $65K/mo | $38K/mo | -42% |
| Operating expenses | $35K/mo | $5K/mo | -86% |
| Net profit/loss | -$25K/mo | +$23K/mo | Break-even! |
"First profitable month in 18 months," Sarah says. "We cried."
| Metric | Before | Month 12 | Change |
|---|---|---|---|
| Revenue | $900K/year | $1.5M/year | +67% |
| Clients | 22 | 18 | -18% (but higher quality) |
| Average contract value | $3,400/mo | $8,300/mo | +144% |
| Team size | 13 | 10 | -23% |
| Revenue per employee | $69K | $150K | +117% |
| Profit margin | -33% | +22% | +55 points |
| Annual profit | -$300K | +$330K | +$630K swing |
| Debt | $300K | $150K | -50% (paying down) |
Path to debt-free: 18 more months at current pace
"We went from 6 months from bankruptcy to profitable in 90 days. It required brutal honesty and hard decisions. But it saved our business—and our marriage."
What Sarah & David learned the hard way:
1. Revenue ≠ Profit "We were obsessed with hitting $1M revenue. But we were losing money on every dollar. Vanity metric."
2. Growth without profitability = death "We thought we'd 'figure out profitability later.' That almost killed us. Profit first, then scale."
3. Not all clients are good clients "Cheap clients are expensive. They take the most time, complain the most, and kill your margins."
4. Fancy offices don't make you successful "We thought our cool office made us look legitimate. Clients didn't care. It was pure ego."
5. Know your numbers "If you don't know your profit margin per client, you're gambling with your business."
If you're losing money:
Stop the bleeding
Right-size your team
Raise prices
Implement financial discipline
Focus on retention
Timeline: Expect 90 days to break even, 12 months to be solidly profitable.
Current state (24 months after crisis):
The mindset shift:
"We used to say yes to everyone," David says. "Now we say no to most people. We're picky about clients, pricing, and projects. And we're 10X healthier for it."
"Going through that crisis was the best thing that happened to us," Sarah adds. "We learned to run a real business. Not just a lifestyle hobby that bleeds money."
If you're struggling:
Don't wait until you're at $12K in the bank. Fix it now.
The hard truth: You probably need to fire clients, cut expenses, and raise prices. Today.
It's scary. But bankruptcy is scarier.
"We waited too long," Sarah says. "If we'd made these changes a year earlier, we wouldn't have gone into debt. Don't make our mistake."
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