We caught up with the brilliant and insightful Laura Sabia a few weeks ago and have shared our conversation below.

Laura, appreciate you joining us today. One thing we always find fascinating is how differently entrepreneurs think about revenue growth and cost reductions – both can be powerful ways to improve profitability. What do you spend more of your time and energy on?

Focus on Growing Revenue or Cutting Costs?

The majority of time, focus, and energy should go towards growing revenue, but it’s important to maintain a healthy balance between the two.

* Revenue has no ceiling: While there’s only so much cost you can cut, the potential to increase revenue is limitless. Prioritizing revenue growth opens up more opportunities for expansion and sustainability.
* Sustainable growth: Focusing on revenue helps build a business that can grow and scale. Constantly cutting costs, on the other hand, can result in sacrificing quality and damaging the customer experience, which ultimately harms your brand in the long run.
* Knowing your numbers: However, understanding and managing your numbers is essential. This ensures you’re making informed decisions about when to invest in growth and where to tighten up inefficiencies. Rather than cutting necessary expenses, like marketing or skilled talent, you can focus on optimizing spending.

Relationship Between Growing Revenue and Managing Costs
The relationship between the two comes down to how strategically you manage costs and how effectively you grow revenue:
1. Team Members Must Pay for Themselves: As the business grows, hiring more team members is critical, but their role needs to either generate revenue or free up others to focus on revenue-generating activities. This ensures that you’re not cutting costs elsewhere to pay for their salary. When done right, each new hire should add value and create opportunities for growth.
2. Efficiency vs. frugality: Being efficient with costs doesn’t mean sacrificing investment in key areas that can drive growth. For example, investing in the right team members and tools can ultimately save time and money by increasing productivity and allowing you or others to focus on scaling the business.
3. Data-driven reinvestment: You should cut costs in non-essential areas and reinvest those savings into efforts that grow the top line—like bringing on new talent, advertising, or product improvements that directly contribute to revenue.

If you imagine as an example, you run a small marketing agency. You’re at a point where you could either bring on a new account manager or cut back on marketing expenses to save costs. Many business owners might be tempted to cut costs—thinking that’s the easier solution—but the long-term focus should be on growing revenue.

Let’s say you decide to hire an account manager. Initially, it feels like a stretch financially. But after bringing them on, they start managing client relationships, freeing up your time to focus on acquiring new clients. As a result, not only do they pay for themselves, but the agency starts taking on more business than you could have handled alone. Now, instead of cutting costs to save money, you’ve hired a team member who has generated revenue and added value to the business.

If you had cut marketing expenses to save money, you might have stalled growth. Less marketing would result in fewer leads, and the business would start to shrink. In the long run, cutting costs might hurt more than it helps.

This illustrates how hiring strategically—where the new team member either generates revenue directly or frees you up to focus on revenue-driving activities—can lead to sustainable growth. It’s about understanding your numbers and making decisions that align with long-term business objectives rather than short-term savings.

Overall, the focus should be on growing revenue while maintaining a strategic awareness of costs. Bringing on team members who either generate revenue or allow others to focus on revenue growth will lead to sustainable business success, without having to resort to cost-cutting measures that could compromise quality or performance.

Laura, before we move on to more of these sorts of questions, can you take some time to bring our readers up to speed on you and what you do?

Laura Sabia @lauralabs is a dynamic, multifaceted wellness entrepreneur and media professional. Her businesses and content predominantly center on wellness, fitness, and community engagement, consistent with her ownership of fitness studios like Pure Barre and Club Sweat, as well as her involvement in lifestyle magazines in Greenwich and Darien, Connecticut. She shares her entrepreneurial journey, focusing on female empowerment, business strategies, and personal growth and her recent book You Can Thank Me Later, is a guide to help female entrepreneurs thrive in their businesses. She is polished and professional, with a mix of personal insights, motivational quotes, and glimpses into her business ventures, all aimed at inspiring her audience to pursue healthier and more balanced lives.

Sabia’s commitment to promoting a holistic lifestyle is evident, and her Instagram serves as a platform to connect with her audience on topics ranging from fitness to leadership and entrepreneurship​

Can you talk to us about your experience with buying businesses?

During the pandemic in 2020, I acquired a closed gym business in the fitness industry. At the time, I thought it was a great investment as I was buying at the bottom of the market cycle since the government had the industry shut down. However, it ended up being a terrible mistake and learning lesson that not everything is the right acquisition or time.

Here are some general steps I learned along the way and things I might do differently. I have since closed this business and no longer own it.

1. Identifying the Target: This involves researching and finding a business that aligns with your goals, whether for expansion, diversification, or a strategic fit. In my instance, this business approached me and I wasn’t seeking out new businesses to expand my portfolio.
2. Due Diligence: This is a critical phase where you evaluate the target company’s financial health, operational aspects, legal standing, and market position. It includes reviewing financial statements, contracts, and potential liabilities. Liabilities are the most important because they can be hidden and you might learn about them after the fact and could potentially be stuck with someone else’s bad debts.
3. Valuation: Assessing the value of the business is crucial. This can involve various methods such as earnings multiples, asset-based valuation, or discounted cash flow. Understanding the cash-flow as it relates to the monthly expenses is high priority so that you know if you need to keep investing after the initial purchase.
4. Negotiation: This involves discussing the terms of the acquisition, including price, payment structure, and any contingencies. Negotiations often require legal and financial expertise. Making sure that the terms you negotiated are actually in the contract and redlined correctly so that neither side tries to sneak in other items that you didn’t agree upon.
5. Legal Documentation: Drafting and finalizing the purchase agreement, which includes terms and conditions, warranties, and representations. Legal advisors need to be involved in your purchase and do not take on the risk of going at this alone or with an online boilerplate template.
6. Financing: Securing the necessary funds to complete the acquisition, which could involve personal funds, loans, or investor capital. Back to the cashflow comment, you need to know if you will need to continue financing after the initial dead is complete.
7. Closing the Deal: This involves finalizing all documentation, transferring ownership, and making the payment. There might also be regulatory approvals depending on the industry. How will you tell the staff, if any and when does the official transfer over look like.
If you’re considering buying a business or just curious, these steps can provide a solid framework for understanding the acquisition process and protecting yourself against bad investments.

Can you share one of your favorite marketing or sales stories?

In the world of business, it’s often the underdog who emerges victorious, and that’s exactly what happened to me during a tumultuous period with a difficult business partner. Our partnership had soured, and we decided it was time to part ways. We each took over one of our two locations, and our lawyers crafted a settlement agreement to keep things civil. The terms were clear: we would each run our own studios, and we were responsible for only the basics—rent, payroll, and insurance.

Here’s where the story takes a dramatic turn. My former partner’s studio was situated in a bustling plaza, surrounded by high foot traffic and vibrant storefronts. It had everything going for it—visibility, easy access, and a steady stream of potential customers. In stark contrast, my studio was a second-floor walk-up at the back of a building, practically invisible to the outside world. The odds seemed stacked against me; it felt like I was fighting an uphill battle from the get-go.

But instead of succumbing to frustration, I saw an opportunity. I decided to channel my energy into a new venture—a media agency. My plan was to create a magazine that would serve as a powerful marketing tool for my studio. I envisioned every issue landing in the homes of local residents, showcasing not just my studio but also supporting the community. It was a bold move, especially given that my partner had no control over this unrelated venture.

As the magazine began to take shape, I poured my heart into its design and content, ensuring it was engaging and visually stunning. With each issue, I saw my studio’s visibility grow, and it wasn’t long before the influx of new clients started to turn the tide. My once-hidden studio began to be known, not through sheer luck but through strategic marketing and relentless determination.

The real victory wasn’t just in the business success—it was in proving to myself that no matter how dire the situation, a creative approach and resilience could transform adversity into opportunity. The satisfaction of seeing my studio prosper against all odds was the ultimate reward, and it taught me a valuable lesson about turning challenges into triumphs.

Contact Info:

• Website: https://www.embosslife.co
• Instagram: @lauralabs
• Linkedin: https://www.linkedin.com/in/laurasabia/
• Youtube: https://www.youtube.com/@embosslife

Image Credits

Abby Cole Photography