When turnover holds growth back: customer profitability lessons for manufacturers

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When turnover holds growth back: customer profitability lessons for manufacturers

A full order book should be reassuring. But when the team is stretched, production is constantly being rearranged and there never seems to be enough margin left to invest, it is worth asking what that order book is actually delivering.

Which customers are helping the business move forward? Which relationships need to change? And what opportunities are being squeezed out by the work already filling the factory?

An interview with Rosehill Group chief executive Dr Alex Celik brings those questions into focus.

The confidence to question existing revenue

In Sheryl Moore’s interview for TheBusinessDesk, published on 26 October 2026, Celik describes moving away from work with diminishing margins, despite giving up around half of Rosehill’s turnover.

The business then explored how its technical capabilities could serve different markets. Today, its applications span areas including transport infrastructure, offshore energy, security and sports surfacing.

The article reports turnover of £37m in 2026, a projection of at least £50m for FY2027 and an ambition to reach £100m within five years.

Those figures describe different stages of the journey. What interests me most is the commercial decision behind it: questioning whether existing work was allowing the business to fulfil its potential.

Read the original Rosehill interview by Sheryl Moore on TheBusinessDesk.

Your biggest customer deserves a closer look

In manufacturing, a customer’s value can become closely associated with their annual spend.

They place regular orders. Their name appears near the top of the sales report. Losing them would leave a noticeable gap.

That relationship may be extremely valuable. But turnover alone cannot tell you how valuable.

Two accounts buying similar amounts can place very different demands on the business. One provides reliable forecasts, accepts standard delivery arrangements and pays on time. Another places frequent small orders, changes specifications and needs repeated intervention from sales, planning and technical colleagues.

The difference may be difficult to see in a headline gross-margin report.

Customer profitability analysis should help make those demands visible. It should also recognise the value of a dependable relationship, future opportunities and the contribution an account makes to covering the business’s costs.

The aim is to understand the relationship well enough to make a better decision.

Follow the work beyond the invoice

A useful review starts with the costs and activities attached to serving an account.

How much time goes into preparing quotations? How often do orders change after acceptance? Are delivery arrangements more expensive than the price assumes? Is technical support occasional, or effectively an ongoing service?

Some costs are easy to identify. Others require a sensible estimate, supported by the people doing the work.

Perfect information is rarely available at the start. A consistent approach, with assumptions made clear, is more useful than a highly detailed calculation nobody trusts.

It also matters how costs are interpreted. Allocating a share of factory overhead to a customer does not mean that overhead disappears if the customer leaves. An account that looks unattractive after an overhead allocation may still make a worthwhile contribution while spare capacity exists.

That is why sales, operations and finance need to review the picture together.

Capacity changes the question

When a production bottleneck is fully occupied, an order uses capacity that another order could need.

The question becomes: what contribution does this work generate from the scarce resource it consumes?

For one manufacturer, that resource might be machine time. For another, it could be specialist engineering, tooling capacity or experienced installation staff.

An apparently healthy order can become less attractive if it repeatedly occupies the bottleneck, creates disruption or delays more valuable work.

Equally, declining an order does not automatically create a better opportunity. Replacement demand may take time to develop, and the business still has wages and other commitments to meet.

Capacity, contribution and the sales pipeline therefore need to be considered together.

Improve the relationship before deciding to leave it

Rosehill’s reported experience is a prompt to review customer economics. It is not a formula every manufacturer should copy.

Often, the first step is a conversation about how the relationship works.

Could smaller orders be consolidated? Would better forecasting reduce disruption? Should additional technical work be priced separately? Are delivery promises or payment arrangements still appropriate? Has the price kept pace with changes in specification and service?

A customer may be unaware of the cost created by the current arrangements. Explaining the issue clearly can open up options that work for both sides.

Where the economics cannot be improved, a planned reduction or exit may be appropriate. That decision needs to account for contractual commitments, cash flow, remaining contribution and a credible plan for the capacity released.

Ask where your expertise creates the most value

A profitability review should also create room to think about future customers.

Manufacturers can become known for a particular product or sector while holding expertise that is useful elsewhere.

That might be knowledge of demanding materials, difficult operating environments, precision processes or complex approval requirements.

A practical starting point is to ask:

Where else does this capability solve a costly problem?

The next step is to test the opportunity. An attractive market may involve lengthy qualification, unfamiliar procurement, additional certification or a service model the business is not yet equipped to deliver.

Diversification is stronger when there is a clear connection between what the business does well and what customers in the new market need.

Five questions for your next commercial review

Use these questions to agree a small number of actions, with an owner and a review date. The value comes from what changes after the discussion.

Make growth worth having

Turnover remains important. It funds activity, supports employment and helps a business invest.

But a growth target becomes more useful when it is accompanied by a clear view of the customers, work and capabilities that will support it.

Before asking the sales team to bring in more, it is worth understanding what the business should do more of.

How clear is that picture in your business?

Fox Healey & Co helps manufacturing and engineering SMEs examine their commercial strengths, identify gaps and decide where to focus improvement. Our free Commercial Performance Snapshot offers a starting point across six areas of commercial performance.

Explore the Commercial Performance Snapshot.

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This article provides independent commentary on publicly reported information. Rosehill is not presented as a Fox Healey & Co client, and no involvement in its decisions or results is implied.