Episode 262: Making the Most of Your Profit Margin with Ciara Stockeland

By Sarah Walton | January 7, 2025

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Have you ever made a boatload of money in your business and had nothing to show for it? You're hitting high six figures, but you're not taking a salary. If you have started to run a business and chased the ever elusive, “ more sales, more sales, more sales!” chances are what's happened with those increased sales is increased expenses.

What that means is you're actually not making money in your business, and it can feel horrible. The emotional toll of that feeling like a fraud, feeling like you're hiding, feeling like if anybody really knew … this is a really common experience in business.

Today’s guest Ciara Stockeland is going to break this down for us in a way no one else ever has. Ciara is a speaker, author, 4x Ironman and Fractional CFO for inventory-based businesses. Her vast experience in both retail and wholesale industries led her to launch the first to market wholesale subscription box for boutique retailers, which she built and sold within 18 months. Most recently Ciara has launched the Inventory Genius, a consulting program for inventory-based business owners.

She has twice had the opportunity to testify before two U.S. Senate Committees regarding the “joint employer” standard for businesses and its effect on small businesses and franchises. Additionally, in 2015 she represented small businesses at a White House Summit on Worker Voice and again in 2018 for a Summit on Economics.

Launching a boutique franchise

Ciara is a third generation entrepreneur, born and raised in Fargo, North Dakota. She started her first business at 13, and moved to retail to open a maternity baby store in 2006. She built up a boutique business and franchised it.

With the second location, the expenses grew too. A second location meant more stuff, which meant the need for a forklift, and a forklift driver. On it went. At the time, Ciara was getting national recognition, which included speaking at the White House for small business advocacy.

“On the inside, I felt like a fraud. I was like, I feel trapped. I don't know what to do with all this debt. This is out of control,” says Ciara.

To make matters worse, Ciara noticed on social media that one of the franchisees had rebranded the store. When they started looking at what was going on, there was a group of franchisees who were running two point of sale systems and not paying royalties. Ciara filed lawsuits for trademark infringement and breach of contract.

“We won on paper, but we lost everything,” says Ciara. “And so in a year's worth of time, I went from being at the White House speaking on behalf of small business to being on my couch with no business, no team having to move because we lost our home, everything.”

Understanding topline revenue vs profit

Ciara asked herself what she could have done different, and she looked at the numbers.

“I wouldn't have pushed so hard to grow topline revenue, but instead I would have focused on profitability and paying myself, I probably wouldn't have sold franchises to the wrong people,” she says.

Reading your profit and loss and balance sheet

This time, she says she wasn’t answering the phone 24/7, she was going to pay herself from Day 1, and she wasn’t going to buy into the lie that she couldn’t be profitable for five years. She was going to build something and sell it quickly. It took 18 months. She did a wholesale subscription box for retailers.

For a while, Ciara resisted the idea of consulting and coaching, but then she met a boutique owner, Lisa, who had lost her husband. He was the numbers guy. Ciara knew she could help.

Ciara says it’s uncommon to walk into a room of entrepreneurs and hear them brag about profit, because most don’t know the numbers. They might say they had a million dollar launch, but they don’t tell you it cost them $7.5 million.

Reading your profit and loss and balance sheet

When you understand what your profit and loss statement and balance sheet are saying, you have all the pieces of the puzzle.

Ciara breaks down the profit and loss into sections. The different between your sales and cost of goods sold is your gross margin, and once you subtract all your expenses, what you have left is your profit.

“When people come to me and they're like, ‘oh my goodness, I owe money on taxes here because I was profitable, but I don't have $100,000.’ Where is it?” says Ciara. If you have debt, and if your debt is more than your profit, you're in trouble. That’s a common mistake, she says.

The balance sheet shows your snapshot in time; all your assets and what you can turn into cash, and your liabilities, what you owe others.

“Looking at [the numbers] gives us reality. And when we have reality, we can make a plan,” says Ciara. “If we don’t look at it, we can’t move forward.”

No one surrounding you on your team should ever make you feel dumb or belittle you, about not knowing something.

Making the most of your margin

When it comes to profitability goals, most people either try to increase sales, or cut expenses. But if you don’t have the foundation for more sales, your whole business could collapse, and cutting expenses won’t actually help your business grow.

Ciara likes to focus on margin instead. Whether you are product or service based, understanding how the cost of goods affects your revenue will tell you what levers you can pull to make changes in your business – whether it’s increasing prices, cutting expenses, changing where your purchase inventory. Everything.

“There's always options,” says Ciara. “We can not sell as much. We can sell more. We can pay less for our sales. There's lots of ways to slice and dice those five categories. And I think understanding those buckets, sales, cost of sales, margin, expenses, profit. What can I do in each of those buckets to move the needle in the right direction?”

Ciara says 20% net profit is a good goal to plan around. Set the sales goal. Look at what the margin is. Look at the expenses. Look at the bottom line. Does it meet the 20% goal?

“That's the process. We push, we grow, we get fatigued, we change something. We learn, we push, we jump ahead again,” says Ciara. “It's okay to know that there's seasons in our business to people that work for you, even employees.”

The people that start with you are usually not the people that can take you all the way. Ciara says she had amazing people who started with her, but she got to a point where she needed specific people (a bookkeeper and operations manager).