AI for Profitability: How It Could Have Saved a £10M UK Agency

I had a difficult phone call recently. It was with a friend from near High Wycombe, a man who, by any external measure, was a success. He'd spent the better part of a decade building a respected professional services agency from the ground up. It had reached a turnover of nearly £10 million.

And he had just walked away from it.

Not sold it for a fortune. Not retired to a beach. He’d wound down operations, handed off his clients, and walked away from the stress and the brand he’d poured his life into.

When I asked him why, his voice was flat, exhausted. "The business was making a 1% profit," he said. "After all the work, all the risk, all the sleepless nights, the business itself was barely breaking even. It wasn't a business anymore; it was a treadmill to nowhere. I had to get off before it killed me."

Does this feeling look familiar? High turnover can hide the dangerous reality of a critically low profit margin, a story all too common for UK business owners.

His story has been weighing on me ever since. Because it’s not an isolated incident. It's a tragedy playing out across Britain. His struggle highlights why the conversation about AI for profitability is no longer theoretical—it's about survival. His business didn't have to die; it just needed a different set of tools.

The Diagnosis: Why a Low Profit Margin Becomes Fatal

My friend's story, as personal as it is, reflects a national trend. The UK's Insolvency Service has been charting a stark rise in company insolvencies, with numbers now consistently exceeding pre-pandemic levels. The main driver is a surge in 'Creditors' Voluntary Liquidations' (CVLs) — which, in plain English, is when directors like my friend look at the books and make the tough decision to call it a day because the business simply can't pay its debts (Source: The Insolvency Service, Quarterly Statistics).

It’s no mystery why. Reports from the Federation of Small Businesses (FSB) read like my friend's diary: a relentless battle against soaring overheads, stubborn supply chain costs, and softening customer demand (Source: FSB Small Business Index). This is the reality behind the statistics. It's the classic "Squeeze."

• Cost Creep: Rising National Insurance, wage floors, unpredictable energy costs, and fragile supply chains that make a 90s dial-up connection look like a model of reliability.

• Expectation Inflation: Today's customers expect an Amazon-level experience from a ten-person team. They demand instant responses and personalised service, all while resisting price increases.

  
  

This combination creates a high-revenue, high-stress, zero-profit environment. My friend’s response was to work harder, which is like trying to outrun a bear. Eventually, you just run out of energy.

The Alternative Path: A Practical Guide to AI for Profitability

Here’s the part that haunts me. What if there was another way? When I talk to owners in this position, I mention AI, and I often see their eyes glaze over. I get it. The last thing anyone needs is another tech evangelist promising a revolution, especially when you're just trying to figure out how to pay the VAT bill.

But this isn't about revolution. It's about relief. For a business on the brink, AI isn't a "nice-to-have" vitamin. It's the strong medicine that can treat the specific symptoms causing the failure.

Pillar One: Stop the Financial Bleeding (Radical Cost Reduction)

First, he needed to plug the holes. So much of his payroll was being spent on non-billable, repetitive work.

• Imagine if his team could have instantly saved thousands of hours on admin. The UK insurance firm Ageas did exactly that. They used AI to summarise customer calls, saving 56,000 work hours a year—the equivalent of freeing up nearly 30 full-time staff members to focus on valuable work. (Source: Google Cloud Case Study)

• What if his operational costs could have been slashed? UPS uses its AI platform (ORION) to optimise delivery routes, saving over 100 million miles and 10 million gallons of fuel annually. The same principle applies to any business with a field team, optimising schedules to cut travel time and costs. (Source: UPS Corporate Reports)

  
  

Pillar Two: Boost the Bottom Line (Intelligent Revenue Growth)

With costs under control, the focus can shift to active growth. This is the true power of using AI for profitability—not just saving money, but making more of it.

• Instead of just chasing more turnover, what if he could have made every sale more profitable? The sales enablement company Highspot used a conversation intelligence AI called Gong to analyse their sales calls. The result? Their sales team increased their average deal size by 64%. They weren't just winning more; they were winning bigger. (Source: Gong.io Case Study)

• What if he could have kept more of his hard-won clients? Landmark research from Bain & Company shows that a mere 5% increase in customer retention can boost profits by 25% to 95%. AI tools can predict which clients are at risk of leaving, allowing a business to intervene before it's too late. It’s the difference between protecting your revenue and constantly trying to replace it. (Source: Bain & Company, "The Loyalty Effect")

How He Could Have Started: A Low-Risk Prescription

This isn't an all-or-nothing gamble. The tragedy is that he could have started small.

1. Use the Tools You Already Own: Microsoft 365, Google Workspace, your CRM—they all have powerful AI features built-in now. He could have started there, at almost no extra cost.

2. Pick One Painful Problem: Instead of trying to "implement AI," he could have targeted his single biggest headache. Was it the time spent creating proposals? Was it qualifying new leads? Solve one problem, prove the value, and use the savings to fund the next step.

3. Demand a Business Case: Any real AI solution should come with a clear ROI. He could have asked a simple question: "If I spend £X, how many pounds will I get back in savings or new profit?"

Your Next Chapter: Getting Started with AI for Small Business UK

My friend's £10 million business is gone. The stress broke him, and a critically low profit margin made the fight unwinnable. His story is a powerful cautionary tale, but it doesn’t have to be your reality.

The first step isn't some grand, expensive project. It's simply understanding where you are and what’s possible. It’s about swapping that feeling of dread when you look at your accounts for a bit of clarity and, dare I say it, optimism.

Ready to find out where you could be saving time and making more money?

Start your AI adoption journey with Extra Mile AI by taking our free 5-minute AI Readiness and Opportunity Assessment.

It’s probably the most profitable five minutes you'll spend this week. And it certainly beats staring at that spreadsheet again.