The Financial Treadmill Effect™ – Why Growth Isn’t Always Progress
- James C Foo Leong
- Jun 21
- 2 min read
The Financial Treadmill Effect™ in Action
You’re sweating. The numbers say you’re going faster. But you’re still in the same place.
I once came across a business owner who had just achieved record-breaking sales. The whole team was celebrating.
But when he reviewed the numbers?
The profit barely moved.
This is what I call the Financial Treadmill Effect™.
You’re running hard, but profit isn’t keeping pace.
All motion, no progress.
Let's hear from the Legend
Warren Buffett put it this way in his 2007 shareholder letter:
“The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money.”
When you’re on the financial treadmill, more sales don’t necessarily help.
You’re burning energy… but not getting ahead.
What Causes the Financial Treadmill Effect?
Costs creeping up with revenue: This often happens when indirect costs—like staffing, systems, or delivery logistics—scale alongside growth but without equivalent efficiency gains.
Discount-driven growth: You’re chasing volume, but giving away margin.
Inefficiencies hiding in a growing business: New hires, tools, or logistics might be duplicating effort rather than adding value.
Three Practical Takeaways
1. Run the "One-Touch" Audit
Ask: What are we doing that takes too many steps or people to complete?
Look for anything that could be simplified, automated, or removed—especially in areas like invoicing, procurement, or internal reporting.
2. Measure Profit per Effort, Not Just Total Profit
Are you working twice as hard for just 10% more return?
If last quarter’s profit increased by $10K but it required 300 extra hours of team effort, that’s a treadmill moment in disguise.
3. Stop and Reset Before You Scale Further
Before scaling, take a breath. Fix what’s not working.
You don’t need fancy tools. Even a simple “If we started this from scratch, what would we keep?” reflection can help rebuild smarter.
If you’re feeling like your team is working harder than ever—but still not feeling the lift in returns—pause and look down.
You might be on a treadmill.
The good news? You can step off the Financial Treadmill Effect™.
And when you do, you move forward with intention, not just static motion.
Reflection Prompt:
What’s one area of your business—or role—where you could create more financial impact?
I support leadership teams and organisations in transforming how they engage with finance, especially those without a finance background. Through keynotes and company-wide rollouts, I help non-finance teams build the confidence and capability to connect numbers to business decisions, with clarity, without jargon, and always with impact in mind.
James
The Financial Storyteller
Ready to turn financial confusion into clarity?
👉 If Once Upon a Balance Sheet resonates with you, we can change the way you see numbers.https://www.financialstorytelling.com/onceuponabalancesheet
