Maximising Margins: Real-World Strategies for Sustainable Growth with Rude Health
Last month, All Together hosted an insightful online workshop with Tim Smith (CEO) and Jonathan Boudlin (CFO) of consumer powerhouse Rude Health, focused on one of the most critical levers for any growing business: profitability.
Following on from the success of our last session on category creation, this workshop shifted gears to explore how founders can build more resilient, margin-conscious businesses – without defaulting to blunt cost-cutting.
From Growth at All Costs to Profitable by Design
Tim and Jonathan shared Rude Health’s evolution from a modest start-up to a well-established brand, including its acquisition by a Finnish company last year. They reflected on how, after years of fast growth and shifting ownership structures, they made a conscious decision to pause and refocus on sustainable profitability – especially as wider market trends evolved away from investment-heavy expansion models that proved unsustainable as access to capital reduced.
They noted that between 2010 and 2018, Rude Health grew steadily without changing its business model, eventually becoming profitable. But in the years that followed, the team began facing the pressure of changing industry dynamics and rising costs, squeezing growth. Their response? A back-to-basics approach – and to get the whole team involved.
Profitability Is a Team Sport
One key takeaway from the session: improving profitability isn’t the finance team’s job alone – everyone must be involved, and bought in.
Rather than issuing top-down mandates, Tim and Jonathan worked with their team to create a culture of ownership and accountability. Firstly, every new budget request had to be balanced with something deprioritised, helping teams re-evaluate spending habits across every type of spend in the business – nothing went unscrutinised.
Secondly, they introduced a transparent reward structure to clearly align the wider team’s incentives with the company goals – especially during challenging financial periods where tough conversations around compensation were necessary.
Thirdly, they ensured that the team was aware of the progress being made by regularly sharing full ‘warts and all’ updates on P&L performance vs. budget. This enabled the celebration of ‘wins’ (both big and small) and gave the team full visibility of any hurdles the business was facing in real time.
Budgeting from First Principles
The group explored the idea of decoupling budgets from fixed percentages of sales, which can be a good guide, but often leads to wasteful or misaligned spending. Tim and Jonathan shared how they moved away from “last year plus 5%” thinking and encouraged teams to rebuild budgets from scratch – based on making active decisions to link spending choices to business strategy, rather than passive decisions to link spending choices to last year’s spend.
This approach brought more rigour and discipline to the business and helped identify areas where investment could be intentional and therefore effective, rather than based on assumptions or good intent.
Culture, Compensation and Clarity
The final part of the discussion focused on culture, and how to keep teams engaged during tumultuous times.
Tim and Jonathan acknowledged that, particularly in start-ups or scale-ups where resources are tight, compensation often scores lowest in employee engagement surveys. But they argued that honest communication, a clear, transparent compensation philosophy which links pay to performance and visible decision-making go a long way.
While it hasn’t always been viable for Rude Health to offer the most competitive salaries or bonuses in the industry, they’ve worked hard to build an envied culture where performance is recognised, objectives are shared and every team member is bought into helping the business deliver profitable growth – knowing that this enables positive evolution of reward.
These are powerful motivators for teams that understand entrepreneurship and are committed to the bigger picture, although instilling these values into a team must come from leadership communication, training and clearly linking rewards and incentives to business performance and objectives.
5 Key Strategies to Maximise Margins:
1) Building profitability requires proactive, not reactive choices – start early and involve the whole team.
2) Review every line of the P&L and every type of spend – inefficiencies and ineffective spend can be hidden across every element of a business.
3) Be bold but rational about pricing – customers understand value if you take the time to explain it.
4) Rebuild budgets from scratch – don’t just roll forward past assumptions.
5) Culture matters in profitability too – communication and ownership make a huge difference.
This wasn’t a spreadsheet-heavy lecture. Instead, it was an open, practical conversation about the trade-offs, tensions, and tactics that come with trying to grow a business and maintain profitability – a notion every founder in the room could relate to.
A huge thank you to Tim and Jonathan for hosting this session and sharing their invaluable insights on profitability. If more workshops like these, or 1-2-1 sessions with Tim might benefit your business, visit www.alltogether.company to find out more and sign up to join the UK’s most accessible network for founders and CEOs.
