“Tabish, everything looks on track—clients are happy, deadlines are met… but somehow, I still don’t seem to be making much money.”
That’s what a founder told me last week. And honestly, I’ve heard this same thing from so many software founders.
Hey there, I’m Tabish Bibikar, and I coach and mentor software company founders to build scale in their business without burning out or losing margins.
And here’s the truth. The real problem isn’t weak sales or bad clients.
It’s operational inefficiency—hidden leakages inside delivery that quietly eat away your profits even while projects look perfect.
Let me break down the five biggest ones.
Leak #1: The “One More Thing” Favor
The client says: “Can you add just one more small section in this report?”
You agree—it feels harmless.
But it takes that 30 extra hours. At $30 an hour, that’s $900 gone. You never billed for it, so your margin just shrank.
Leak #2: Sneaky Change Requests
The client asks: “Can we tweak this feature?”
You say yes, because anyways you were working on that feature, only now it’s going to be different, you think it’s Okay as it won’t delay delivery.
But now a senior architect at $100/hour replaces a junior at $35/hour. Over 20 hours of effort now cost $1,300 extra, that’s clearly profit gone. Same revenue, but costs quietly doubled.
Leak #3: Using the Wrong People
Your senior dev—$75/hour—is fixing small bugs a $30/hour engineer could handle.
For every 40 hours, that’s $1,800 overspent. Multiply that across projects, and margins keep shrinking—without you realizing it.
Leak #4: The Waiting Game
The Development finishes on Wednesday. QA starts Monday. Five idle days.
A team of 5 at $500 a day each—that’s $12,500 in payroll burned with nothing produced. Dashboards still show “green,” but profits bleed.
Leak #5: Hidden Rework
Bug fixes, rewrites, retests. They hide inside “normal hours.”
A $10,000 feature ends up costing you $13,000 to build. The client still pays $10,000. You quietly ate the $3,000 loss.
And here’s the part most founders miss.
They think, “If the project is Time & Material, why should I worry about hours? I’m billing for the time anyway.”
But that’s not true.
If you’re not measuring effort properly, you’ll never know how much extra work is slipping in versus what you’re billing for. And in Fixed Price projects, it’s even worse because every extra hour eats directly into your profit margin.
Now don’t get me wrong. I’m not saying you hold your client accountable for every single minute you put in. There’s always some give and take—that’s how strong client relationships are built. Of course, you’ve got to be empathetic.
But if inefficiencies go untracked, they quietly become part of your culture. And once inefficiency becomes culture, that’s when margins collapse—no matter what model you’re working on.
So here’s the bottom line:
Meeting deadlines means your project survived.
Meeting profit margins means your business survived.
Thanks for watching, and I’ll see you in the next one!
