You ever look at your project reports and think —

“Every project is profitable, but somehow… we’re still not making money as a company?”

If that sounds familiar, you’re not alone.

Most IT services founders fall into this exact trap.

Hey there, I’m Tabish Bibikar, and I coach and mentor software company founders to build scale in their business — without losing focus or burning out in the process.

Let’s talk about a mistake that quietly kills profits — confusing project profitability with company profitability.

Here’s what most founders do —

They look at their delivery dashboard and say,

“Okay, this project made 20% margin, that one made 18%, and this one… maybe 25%. We’re doing great!”

But when they check their P&L at the end of the quarter — the numbers don’t add up.

Because what’s profitable inside delivery may not be profitable for the business.

Here’s why.

Project profitability only measures what happens inside the project.

It looks at things like —

  • Developer hours billed vs. spent
  • Cost of delivery vs. project revenue
  • Resource utilization within that project

But company profitability?

That’s everything.

Your overheads.

Your bench cost.

Your sales and marketing expenses.

Your admin, your finance, your leadership salaries — all those costs that never show up in project budgets.

So even if your project margins look great, those invisible costs can eat up your profits.

Let me give you a real example.

One of my clients was running an average project margin of 25%.

But when we looked deeper, we found that only 70% of their team was billable.

The rest were on the bench or doing internal work.

Add to that their sales salaries, office rent, and software subscriptions — and that 25% project profit actually dropped to just 8% at the company level.

That’s the gap between busy and profitable.

So what’s the fix?

Start tracking profitability at both levels.

Here’s how:

  1. Calculate True Project Margins.Include indirect costs like project management, QA, and rework. Don’t just count dev hours.
  2. Measure Company Overheads.Look at your non-billable staff and monthly fixed costs. Spread those across your total delivery capacity.
  3. Bridge the Two.Your project margins should be high enough to carry your overheads and still leave a healthy profit buffer.
  4. Watch Utilization.A company running at 65% utilization can’t survive on 20% project margins. You’ll need to push one of them up — or both.

When you understand this difference, your strategy changes completely.

You stop chasing every deal that “covers costs,” and start pricing for true profitability.

Because the goal isn’t to run profitable projects —

It’s to run a profitable business.

So the next time you see a green project report, ask yourself —

“Is the company green too?”

Thanks for watching, and I’ll see you in the next one.

Tabish Bibikar

Video By:

Tabish Bibikar

Tabish Bibikar is a seasoned Coach specializing in guiding high-performing software company founders. With nearly three decades of experience in the IT industry, ranging from small firms to multinational giants, Tabish has a comprehensive understanding at both micro and macro levels.

Since 2014, she has coached numerous software companies, including SAAS providers and product development firms, helping them achieve significant milestones such as reaching their first Million and scaling up further. Tabish's expertise in IT business coaching has enabled her clients to consistently generate more leads, increase profits, build and retain exceptional talent, and attract crucial investments.

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