The “Reinvesting Profit” Myths You’ve Been Told — And the Truth Behind Them

By Andy Mulholland

He has a background in leading a top real estate team for over a decade and an understanding of the critical role of clear financials, Andy, along with his wife Ellyn, a seasoned real estate CFO, co-founded Simple-Numbers.

The Real Estate Team OS recently interviewed me about how small business owners approach growth. I recalled a conversation that I had with different real estate business owners because it was about scaling. One of the things they mention about growing their business is “reinvesting profits”, which I didn’t like. The reason is not because investment is bad, but because that phrase often covers up a deeper problem.

Profit in a small business is not just a number because it’s the money that keeps your family secure. It’s what allows you to pay yourself, show up for your kids, and sleep without stress. When someone says they’re reinvesting everything, what I often hear is, “I spent more than I should have, and I’m hoping it pays off.”

While this may work in a large public company because they have the flexibility to do so, it doesn’t work for a business owner who has to pull money from savings to cover payroll. I’ve met with team leaders who were in tears because they thought they were doing the right thing by pouring every dollar back into the business. They thought it would lead to growth. Instead, it led to burnout, instability, and regret.

The pain of overspending hits hard and fast. You feel it in your bank account and in your personal life. You miss time with your family, and you question your decisions, which leads you to chase the next win, hoping it will fix everything.

Here’s a better way to think about it. First, look at your numbers. If you have 50% gross profit and you want to keep 20% net, that leaves 30% for operating expenses. If your spending exceeds that, you are not investing. Instead, you are gambling because you are betting on a future outcome that may never come.

Growth should support your goals, not derail them. Profit gives you control. Without it, you’re stuck. Not because your business isn’t making money, but because it is not making the kind of money that lets you live freely.

You do not need to chase scale at any cost nor match someone else’s success path. What you need is a model that aligns with your goals, be relentless with your numbers, and protects your income. If that’s unclear or feels out of reach, feel free to schedule a strategy session with me today. I’ll be happy to provide the clarity you need to ensure you are on the right track. Remember, there is always a better way to grow, and it starts with protecting what matters most.