Why Your £5M+ Firm’s Profits Are Slipping - And How to Turn It Around
By Brad Wright, Business Coach for Engineering, Manufacturing, and Construction Leaders
You’ve built a £5M+ engineering, manufacturing, or construction business in the UK - a mark of real success. Your order book’s healthy, your reputation’s solid. So why does the bottom line feel tighter than it should? You’re not alone. I’ve seen this with dozens of established firms: profits erode even when revenue holds steady.
The culprits? Supply chain disruptions, a shrinking pool of skilled talent, and the quiet cost of doing business as usual. These aren’t signs of failure - they’re challenges of success. Here’s why they’re hitting you now, and how to take back control.
1. Supply Chains Are Draining Your Cash
Disruptions aren’t new, but they’re biting harder. Material costs have climbed 15% since 2022 (ONS, 2025), and delays - think transport disruption, tariffs, equipment failures, supplier shortages or quality problems - can stall projects by weeks.
The Impact: A £7M manufacturing firm I coached lost £150k last year to late deliveries they couldn’t bill for. Construction owners tell me similar stories: subcontractors waiting for drawings, lifting gear or materials push deadlines and attract penalties.
The Solution: Stop reacting - start negotiating. Lock in secondary suppliers now, even at a small premium, to avoid bigger losses later. One client cut delays by 30% by building a tighter, local supply network. Review your terms too - net 60 might be generous, but it’s costing you.
2. Your Workforce Is a Ticking Clock
The UK’s skills shortage is real - construction alone needs 225,000 new workers by 2027 (CITB, 2025), and engineering firms are losing talent to retirement faster than apprentices can fill the gap.
The Impact: A £10M fabricator I worked with saw output dip 30% because their best welders left, and new hires needed six months to catch up. Overtime’s a temporary fix, but it’s eating your margins.
The Solution: Invest in retention and training now. Offer your top performers clear career paths and upskilling - not just pay bumps - to keep them. Partner with local colleges for apprentices; one client halved onboarding time with a tailored program. It’s not cheap, but losing talent costs more.
3. Winning Work Comes at a Hidden Price
Bigger contracts are tempting - public sector deals. working with main contractors or high-value manufacturing orders - but the admin and compliance load can choke your team. And forget about getting paid on time in full to programme.
The Impact: A £12M construction firm I advised won a £3M project, only to lose half the profit to rushed bids and unforeseen regulatory requirements. More work doesn’t always mean more money.
The Solution: Streamline your tender process. Assign a dedicated bid manager to nail the details - scope, risk, contingencies. One owner I coached boosted their win rate by 23% just by slowing down to get it right. Quality bids beat quantity every time.
4. Business as Usual Is Costing You
Success breeds complacency. Processes that worked at £3M start creaking at £5M+. Margins shrink when you don’t spot the waste.
The Impact: A £6M engineering firm I helped found 25% of their machine time went to setups - fixable with a £50k upgrade they’d delayed for years. Small leaks sink big ships.
The Solution: Audit your operation yearly - as a minimum. Walk the floor, talk to your team, find the friction. Test one fix at a time - new kit, better scheduling, tighter stock control. That £50k upgrade? It paid back in four months with £120k in extra output.
Your Action Plan to Protect Profits
Here’s how to start today:
Map the Leaks: Track where cash is slipping - supply delays, overtime, rework. Pinpoint the biggest hit.
Fix One Thing: Pick a quick win - say, a new supplier deal or a training tweak - and test it in 30 days.
Lead the Charge: Show your team you’re serious. Share the goal, track the result. One client rallied their crew to save £80k in 90 days by cutting waste together.
This isn’t about drastic change - it’s about sharpening what’s already working. I’ve guided UK owners to reclaim £200k+ in profit without upending their firms. You can too.
Take the Next Step
If your margins aren’t matching your effort, let’s dig into why. I work with engineering, manufacturing, and construction leaders to turn challenges into cash. DM me for a no-nonsense chat about your business.
