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EP334 Stop Guessing- Use Benchmarks to Fund Profitable Growth · Profit With A Plan

• 0:06
  Marcia Riner | Profit Booster®: Hey, if your business is spending on growth, but you're not actually growing, this episode might hit a nerve. See, most firms under… underfund the areas… hang on, I moved my microphone, and then I got off track.
• 0:20
  Jon Morris: Nowhere.
• 0:21
  Marcia Riner | Profit Booster®: It started to fall when I, when I pulled it closer.
• 0:24
  Marcia Riner | Profit Booster®: Okay.
• 0:26
  Marcia Riner | Profit Booster®: If your business is spending on growth and not actually growing, this episode might hit a nerve. See, most firms underfund their areas that drive revenue, sales, marketing, and R&D, and then wonder why their results stall.
• 0:41
  Marcia Riner | Profit Booster®: In this conversation, financial strategist John Morris breaks down how to budget for real growth, use benchmarks to stop guessing, and make sure that every dollar you, invest in delivers measurable impact.
• 0:55
  Marcia Riner | Profit Booster®: So if you want smarter planning, better decisions, and profit-fueled momentum, then this is the podcast that you've got to listen to.
• 1:06
  Marcia Riner | Profit Booster®: Hey entrepreneurs, if you're working too hard for too little profit, well, welcome to Profit with a Plan podcast, where we help you scale smarter, increase profitability, and build a business that's worth more, whether you keep it or sell it.
• 1:19
  Marcia Riner | Profit Booster®: I'm Marcia Reiner, business growth strategist and profit booster behind Infinite Profit. I've helped countless entrepreneurs to turn their businesses into highly profitable and sale-ready assets, so they enjoy more income now, and a bigger payday later.
• 1:34
  Marcia Riner | Profit Booster®: So join me for practical strategies, expert insights, and proven steps to make your business more profitable, more valuable, and built to last.
• 1:42
  Marcia Riner | Profit Booster®: By the way, today's episode is sponsored by Infinite Profit, where we don't just talk profit, we deliver it.
• 1:49
  Marcia Riner | Profit Booster®: Alright, before we dive in, I've got something special for you. If you're tired of flat revenue or marketing that just doesn't pay off, my new Profit Booster Growth Map might be for you. In just a few minutes.
• 2:02
  Marcia Riner | Profit Booster®: It'll show you exactly how to bring in more qualified clients and plug those profit leaks that are eating away at your cash.
• 2:09
  Marcia Riner | Profit Booster®: Go get your growth map at ProfitBooster.biz and start turning missed revenue into real money.
• 2:17
  Marcia Riner | Profit Booster®: All right, now let's jump into today's episode. John Morris is the CEO of Fiscal Advocate, and a leading voice in finance-first growth strategies for agencies and professional service firms.
• 2:29
  Marcia Riner | Profit Booster®: After scaling his last company from $10,000 to nearly $40 million, John saw firsthand how the right financial systems can transform a business.
• 2:39
  Marcia Riner | Profit Booster®: Today, he helps leaders move beyond guesswork by building clear, strategic budgeting frameworks that support smarter decisions, stronger cash flow, and meaningful investments in sales, marketing, and R&D.
• 2:53
  Marcia Riner | Profit Booster®: Through Fiscal Advocate, John and his team partner with growth-minded companies to align financial insights with real business impact. So every dollar invested has a purpose and a return. So he's here to show us how to really… what really it takes to grow, a fund, or fund a growth that's meant to last.
• 3:13
  Marcia Riner | Profit Booster®: Hi, John, with my thumbs in my mouth, I got through everything. Welcome to Profit with a Plan podcast.
• 3:20
  Jon Morris: Marcia, thank you so much for having me here. Really excited to be here.
• 3:23
  Marcia Riner | Profit Booster®: I love it, love it. Okay, so I always like to start off and figure out why or how you got into this side of the business, because people don't wake up, you know, and get out of high school, go into college, and go, I'm gonna be a financial analyst, right?
• 3:39
  Jon Morris: So, you know, from 1996 to 2020, I was a digital marketer and an entrepreneur.
• 3:46
  Jon Morris: So, today, I am a fractional CFO and an entrepreneur. Nice. And so, it's not like I graduated college and moved into the finance world.
• 4:01
  Jon Morris: I happened into this, because…
• 4:05
  Jon Morris: the secret to Rise's success, how I took it from zero to 40 million, was how I made decisions and how I used financial data.
• 4:14
  Jon Morris: And I really love connecting with other entrepreneurs. I really consider, that that's my kid, like, that's my group.
• 4:22
  Jon Morris: And if I could help them scale and grow and share wisdom, it energizes me. And so, recognizing that this was my secret sauce, I'm now kind of looking to give that secret sauce to the world.
• 4:36
  Marcia Riner | Profit Booster®: I love it, I love it. And you know what, I find that, most…
• 4:39
  Marcia Riner | Profit Booster®: really successful business owners. Rarely… I'm not kicking at the colleges here, but rarely did they have formal training in that lane.
• 4:49
  Marcia Riner | Profit Booster®: they often fell into it because hands-on, working day-to-day, problem-solving, you know, in the trenches kind of stuff gave them that grit that helped them really to thrive. So, I love that this is a natural development for your business, and that you want to share it with the world.
• 5:09
  Jon Morris: Excellent.
• 5:10
  Marcia Riner | Profit Booster®: Yeah, cool. Okay.
• 5:11
  Marcia Riner | Profit Booster®: So, in looking at growth, you know, a lot of business owners, they get distracted, right? Shiny objects come in, they're chasing squirrels, right? They're doing things that
• 5:23
  Marcia Riner | Profit Booster®: probably aren't moving the needle like they want them to. How do you help them see where that time, energy, and more importantly, the investment dollars have to be put?
• 5:36
  Jon Morris: So, the first thing is.
• 5:38
  Jon Morris: You know, and I hopefully won't put your audience to sleep with this, but your income statement tells a story.
• 5:44
  Marcia Riner | Profit Booster®: That's if a business owner looks at their income statement well enough.
• 5:47
  Jon Morris: Yeah, and you don't have to… you have to know how to read it.
• 5:52
  Jon Morris: But, you know… I help people understand the story of their business.
• 5:58
  Jon Morris: And you can very quickly identify what is imported to somebody based on what they spend money on.
• 6:05
  Marcia Riner | Profit Booster®: Hmm.
• 6:05
  Jon Morris: And so, you know, RISE grew at 75% on average every single year over that 16 years.
• 6:14
  Marcia Riner | Profit Booster®: Wow.
• 6:14
  Jon Morris: And…
• 6:16
  Jon Morris: A lot of people who I built friendships with were in the agency world that owned much smaller agencies.
• 6:25
  Jon Morris: And they would always ask me, you know, like, what was your secret? How did you do it? You know, like, they're looking for themselves to figure out how they can do it.
• 6:32
  Jon Morris: And I'd always answer the question with a question. It's like, well, what percent of your revenue do you spend on sales and marketing?
• 6:39
  Marcia Riner | Profit Booster®: Hmm.
• 6:40
  Jon Morris: And the answer I always got, or 95% of the time I got, was, oh, I don't spend anything on sales and marketing. It's all word of mouth, it's all referral.
• 6:49
  Marcia Riner | Profit Booster®: Isn't that terrible?
• 6:50
  Jon Morris: And I would have two typical responses to that. The first one is, so we spend a massive amount, like, the highest percent of revenue we possibly can on sales and marketing is one of our strategies.
• 7:05
  Jon Morris: And so, what I'm telling you is the difference between me and them was that growth was really important to me.
• 7:13
  Jon Morris: You know, I wasn't wishing growth to happen, I was making growth happen. And… You know, so…
• 7:22
  Marcia Riner | Profit Booster®: I think… I think, I think there's a… I want to say it's Dan Kennedy, I could be wrong, that said, you know, the one who spends the most wins, right? Especially on marketing and sales, because that is something that you control.
• 7:35
  Marcia Riner | Profit Booster®: You're spending money to get in front of more of your ideal prospects, rather than building a network and shaking hands with a potential partner, which is not a bad thing, but it's an extra thing, and the primary one is looking at
• 7:52
  Marcia Riner | Profit Booster®: How you get in front of your ideal customers in the most efficient, effective, and, you know, cost-effective kind of way, right?
• 8:00
  Jon Morris: Yep, and so, look, if… it doesn't mean that you have to do it, but…
• 8:06
  Jon Morris: I'm just gonna use… I know the professional service industry, like, that's my sweet spot of expertise.
• 8:12
  Jon Morris: And so if you own a marketing agency, a tech service agency, like, these benchmarks will make sense to you. The average agency, or professional service firm, spends 8% of their revenue on sales and marketing. That's the average.
• 8:27
  Jon Morris: So if you think about this, half spend more, half spend less.
• 8:32
  Jon Morris: If you're in the half-spend less category, You're at a competitive disadvantage.
• 8:39
  Jon Morris: You know, year after year after year, that compounds.
• 8:43
  Jon Morris: Into your brand not being as well known.
• 8:46
  Jon Morris: As your competitors.
• 8:48
  Jon Morris: And so, I want you to have a competitive advantage. And so, what you want to think about is if the average is 8%, how do I spend 16%?
• 8:57
  Jon Morris: You know, how do I have such a large advantage? And I'll get into how you could potentially fund this.
• 9:03
  Jon Morris: But, you know, same thing with R&D. I would say, you know, I've now talked to well into the hundreds, maybe even into the thousands, of marketing and tech service companies.
• 9:15
  Jon Morris: And… I would say 99.5% of them.
• 9:20
  Jon Morris: spend 0% on R&D or innovation.
• 9:25
  Jon Morris: And I'm not talking about innovation with a capital I, like self-driving cars, or the, you know, the next thing to replace the iPad at. I'm talking about innovation with a lowercase i.
• 9:36
  Jon Morris: like, automating your onboarding for clients, you know, or automating your onboarding for employees, or offboarding, or, you know what I mean? Just, like, small things that you can do.
• 9:46
  Marcia Riner | Profit Booster®: that improve your operations or your processes that you do. That's fantastic.
• 9:54
  Jon Morris: And so, you know, I'll give you just two examples with Fiscal Advocate. You know, we build a lot of technology, so we have a full budgeting and forecasting software system. I'm about to launch an AI CFO co-pilot, and I have 5 full-time people. You know, my business has only been around for 5 years.
• 10:13
  Jon Morris: dedicated to building out this technology. Like, that's my R&D budget.
• 10:18
  Jon Morris: I then have, you know, on the sales and marketing side, you know, like, if someone goes to my LinkedIn content, they'll see that I post minimum every Monday, Wednesday, and Friday. Haven't missed a single week since August of the last year, because I have a firm that I'm allocating money to, to help me manage and build that content.
• 10:37
  Marcia Riner | Profit Booster®: Because growth is important to me.
• 10:40
  Jon Morris: And the reason why I innovate is so that I can deliver a better customer… a better experience and better results for my clients at the end of the year than I can at the beginning of the year.
• 10:51
  Jon Morris: And so, these are the metrics I want you to be thinking about, is how do you get more money into those two metrics, your R&D budget and your sales and marketing budget, so that you keep your customers longer, and you're able to win new customers?
• 11:05
  Marcia Riner | Profit Booster®: I love this idea, but let me ask you a question. So, I think when business owners look at that kind of investment, okay, if we're gonna take that 8% median and say we're gonna invest that into our sales and marketing.
• 11:22
  Marcia Riner | Profit Booster®: What kind of return on that investment are they really expecting, and…
• 11:28
  Marcia Riner | Profit Booster®: You know, how do you get them to really believe that that investment will pay off?
• 11:33
  Jon Morris: Yeah, so there's two things. First is getting the money to actually invest in it, and the second thing is spending it intelligently.
• 11:40
  Marcia Riner | Profit Booster®: Right? Yes.
• 11:41
  Jon Morris: If sales and marketing was easy, you know, everyone would be putting more and more money into it. It's hard.
• 11:47
  Jon Morris: Okay, and oftentimes, your first ROI
• 11:50
  Jon Morris: Is to gather enough data to find out if something works.
• 11:54
  Jon Morris: You know, I'm thinking about an event strategy, and I'm gonna go try these 4 events. And you go there, and it turns out that, you know, they were the wrong events completely. And you gotta… you failed. So, that doesn't mean that you stop, it means that you test the next thing.
• 12:11
  Jon Morris: Until you find the thing that works. But I'll get into some metrics, so…
• 12:18
  Jon Morris: You know, if you're investing in sales and marketing.
• 12:22
  Jon Morris: You generally have two types of revenue. It's project-based revenue, or what I call MRR, monthly reoccurring revenue, on the service side of business.
• 12:31
  Jon Morris: And on the monthly reoccurring revenue side, I look at break-even analysis.
• 12:37
  Jon Morris: Meaning, how much did it cost to acquire a customer?
• 12:40
  Jon Morris: And how many months do you have to keep that customer before you break even?
• 12:44
  Jon Morris: If it takes longer than a year, meaning that, you know, you bought this customer, and you're still losing money off of buying them after 12 months, your marketing is not efficient.
• 12:58
  Jon Morris: If it's 6 months or less, you're in the sweet spot of where I want you to be, and if it's 3 months or less, you are best in class. Then my question is, how do you spend more?
• 13:10
  Marcia Riner | Profit Booster®: Yay!
• 13:12
  Jon Morris: On the flip side, I, you know, I do a lot of benchmarking data with my clients, and I have clients that their sales and marketing is awful.
• 13:20
  Jon Morris: You know, and I'm looking into, why is that the case? This is a real story, you know, client was spending, you know, $400,000 on their marketing budget.
• 13:32
  Jon Morris: And 240,000 of it was a chief marketing officer.
• 13:37
  Jon Morris: And, you know, I just said to them, I was like, you've hired way too senior of a person for the size of your budget. Like, you need to have a $2 million budget to justify that hire.
• 13:50
  Jon Morris: What you need is a marketing manager, you know, that's probably $80,000 to $100,000 a year.
• 13:55
  Jon Morris: And so, when you start looking at it, well, it's pretty obvious. Once again, your income statement tells the story, if you structure it properly, of, okay, well, it didn't take me long to figure out that this marketing budget was not well thought out in terms of its allocation.
• 14:11
  Marcia Riner | Profit Booster®: You know, and I think that's really important, to not hire the senior-level team right out of the get-go. Your hiring should be the worker bees first, right? The people that are actually doing the work and implementing, rather than someone that's overseeing and strategizing. There's enough of us fractional people that.
• 14:27
  Jon Morris: Yep.
• 14:28
  Marcia Riner | Profit Booster®: hire at a lower price to do that kind of work. But I think that,
• 14:32
  Marcia Riner | Profit Booster®: The scary part for business owners, or the things that frustrate them the most when they invest in this kind of effort, right? If the initiative is marketing, you know, there's always that 6-month window of them feeding money into the machine to learn that data.
• 14:49
  Marcia Riner | Profit Booster®: for them to start to maybe break even, or start to turn, you know, some results coming through. And a lot of times, business owners, they throw their hands up and say, I'm not gonna do it, or they cut loose at 5 months, right?
• 15:03
  Jon Morris: cut bait too early.
• 15:04
  Marcia Riner | Profit Booster®: Yeah!
• 15:06
  Marcia Riner | Profit Booster®: How do you keep them engaged?
• 15:08
  Jon Morris: it's hard. I mean, I'm just gonna be honest, like, this is what makes business hard, is, you know.
• 15:13
  Jon Morris: Are you giving something enough runway to determine if it's working?
• 15:18
  Marcia Riner | Profit Booster®: And remember, I said that the goal, oftentimes in marketing, is to gather enough data.
• 15:24
  Jon Morris: To determine if something is effective.
• 15:26
  Jon Morris: So, let's just say you hired someone to do search engine optimization for you, which typically takes about 6 months before you start seeing results. And you're like, after 30 days, I don't see, hey, I'm googling, you know, all sorts of words, and I don't see us anywhere. You know, I'll tell you a real story, because I owned a digital agency.
• 15:46
  Jon Morris: We had a home, improvement, like, a home developer as a client.
• 15:52
  Jon Morris: And we're about 4-5 weeks into the engagement.
• 15:56
  Jon Morris: And he calls me up, and he just starts yelling at me.
• 16:00
  Jon Morris: And,
• 16:03
  Jon Morris: And I, you know, I'm big enough that I'm not involved in his projects. Like, I have no idea what's going on with this account. He's like, I'm googling Chicago home development, I don't see us anywhere, what's going on? You know, swearing, I mean, it was… went nuts.
• 16:17
  Jon Morris: So, you know, I'm like, calm down, let me get the team, I'll figure this out for, like, what's going on.
• 16:24
  Jon Morris: So remember, we're only 4 to 6 weeks in to this search engine optimization engagement, and so I get the whole team, I have them on speakerphone, and, you know, what it turns out is what we have done
• 16:39
  Jon Morris: is developed the templates with all of the changes that we recommended for him to do to his website. We have delivered them to his marketing team internally, and they were in the process of reviewing them.
• 16:53
  Jon Morris: So.
• 16:54
  Marcia Riner | Profit Booster®: So they hadn't even done anything.
• 16:56
  Jon Morris: So not a single thing had gone live yet, you know? Oh my gosh. You know, so you hear his voice change, and, like, he changes his demeanor, and, you know, like, I turned to him on, you know, and I was like, you know, the problem here was trust.
• 17:12
  Jon Morris: you know, it's like that, you know, we haven't built the trust yet. I was like, what do I need to do to build that trust? You know, the trust isn't the part of this conversation. The point is.
• 17:21
  Jon Morris: he wasn't having the patience to let this run its course. And I think that that's a really important thing when you make an investment that…
• 17:32
  Jon Morris: you know, it… I speak out of both sides of my mouth, because I want crazy sense of urgency.
• 17:39
  Marcia Riner | Profit Booster®: Yes.
• 17:40
  Jon Morris: But I also don't want you to give up on an investment before it's time. Now, on the flip side, you gotta know when it is enough time. You know, like, you can't let it keep on going and going and going.
• 17:51
  Marcia Riner | Profit Booster®: Exactly.
• 17:53
  Marcia Riner | Profit Booster®: But I think oftentimes, the businesses are… are running from a fearful place, right? So this guy was making an investment probably because he's, you know, 6 months too late for making the investment, you know? And so now he's under, like, some fire, and he's needing… needing, you know, that investment to pay.
• 18:11
  Jon Morris: You know? And…
• 18:15
  Marcia Riner | Profit Booster®: Yeah, so it's crazy. It's crazy what businesses go through. So, marketing is one of those things that you have to do consistently FOREVER, you know, and it's not something you can let off. And I love the idea that, you know, you've got to understand
• 18:31
  Marcia Riner | Profit Booster®: When it's time to cut, when it's time to change, but it's never a time to quit.
• 18:37
  Marcia Riner | Profit Booster®: I think it's something that has to be done all the time.
• 18:39
  Jon Morris: In my opinion, the budget needs to stay there, and the tactics need to change. So, you are just constantly optimizing.
• 18:48
  Jon Morris: You know, and then when you find… I'm gonna give you a good example of something I wish I could go back in time.
• 18:54
  Jon Morris: And do.
• 18:57
  Jon Morris: I sent out an email to 14 web development companies in San Francisco. We just did the digital media, we didn't do any web development at this moment in time.
• 19:05
  Marcia Riner | Profit Booster®: Okay.
• 19:06
  Jon Morris: And the email is really simple. I'm coming to town for a conference. We don't do any web development. Some of our clients are constantly looking for web development companies, and maybe we could help you with the digital media. So it was a partnership relationship. I got 11 meetings out of the 14.
• 19:21
  Jon Morris: And I ended up getting Cisco as a client, the Sacramento Kings as a client, Bacardi as a client, you know, like, a bunch of logos off of that.
• 19:31
  Jon Morris: What I should have done is hired a BDR, a business development rep.
• 19:36
  Jon Morris: to immediately start sending me across the country, you know, with a Coming to Town campaign, and, you know, and… or even just try to get on the phone where I don't have to fly to see them. But at that moment, I was single, I was happy to go fly anywhere in the world to go see things.
• 19:54
  Jon Morris: And… but I missed an opportunity. It's like, I identified a thing that was working, and I didn't add fuel to the fire.
• 20:03
  Marcia Riner | Profit Booster®: You didn't, yeah.
• 20:04
  Jon Morris: And I think… I think here's… here's where a lot of businesses, too, they get… they get afraid, oh my gosh, what if it works and I can't deliver, right? You know, because my infrastructure is not in place. I always like to say growth is that Christmas tree look, right?
• 20:18
  Marcia Riner | Profit Booster®: up, and then you scale out, and you grow up, and you scale out. You can't scale before you grow, otherwise you're making a poor investment in that area. But yeah, fear, again, fear's a big… fear and change are always those devils that sit on our shoulders as business owners and block us from the potential of growth that we should have.
• 20:38
  Jon Morris: Look, I would much rather have that problem of, I have so much business that I don't know how to, you know, build the infrastructure, as opposed to I'm begging people and calling…
• 20:49
  Marcia Riner | Profit Booster®: Right?
• 20:49
  Jon Morris: calling my SEO firm on day two of, like, what's going on? Because I need customers today, instantly.
• 20:55
  Marcia Riner | Profit Booster®: I need them yesterday!
• 20:56
  Jon Morris: Exactly.
• 20:57
  Marcia Riner | Profit Booster®: Exactly. Well, this is great, John, because you're giving us a lot of, like, reality on here, and giving us the reasons why we should be investing, but when we look at investing.
• 21:08
  Marcia Riner | Profit Booster®: When we look at R&D opportunities, right, you know, those are the micro-changes you can do to improve your processes and the way you deliver experiences to your customers. You look at the marketing that's, you know, gosh, needs to be done all the time.
• 21:24
  Marcia Riner | Profit Booster®: how do we invest in sales, right? How do we… what do we do in that space?
• 21:28
  Jon Morris: So, very similar to marketing, you know, I like to say, first, we need to invest in sales and marketing. So that 8% I talk about is combined, and typically, I find it's a 50-50 split between sales and marketing.
• 21:40
  Jon Morris: So, I'm gonna just start with your entire growth plan.
• 21:44
  Jon Morris: What you want to do is pick a number that you're targeting for next year, okay? Let's just say you want to do a million dollars in new business that's going to be recognized in that year, which means that you probably have to sell 2 million, because you don't get to recognize all the revenue you sell in a 12-month period.
• 22:01
  Jon Morris: And then what I want you to do is look at your average order value.
• 22:06
  Jon Morris: And I want you to map out, by month.
• 22:09
  Jon Morris: How many new clients do you need to win?
• 22:12
  Jon Morris: Then I want you to do a reality check, and I want you to go look at how many clients are you currently winning, you know?
• 22:19
  Jon Morris: I had to climb on… they ended up firing me because they didn't like the news I was giving them.
• 22:24
  Marcia Riner | Profit Booster®: Truth hurts sometimes.
• 22:25
  Jon Morris: Yep, they were an $11 million company that wanted to go to $12 million.
• 22:30
  Jon Morris: And when I put their plan together, I told them that they're only going to do 9.
• 22:34
  Jon Morris: And so, they fired the messenger on that, but the main reason was they had 3 7-figure accounts, and they lost all 3 of them.
• 22:45
  Jon Morris: And they were winning 2 new customers a month.
• 22:50
  Jon Morris: And an order… and their average order value was, like, $100,000, $120,000.
• 22:55
  Jon Morris: In order to get to 12 million, they would have to go from winning 2 clients a month to 7 clients a month.
• 23:04
  Marcia Riner | Profit Booster®: That's a huge jump.
• 23:05
  Jon Morris: And we were in January of the year, so the year started already, and they're like, well, we just hired a salesperson. And I was like, that's great, but that person's gonna take 3 to 6 months just to get up to speed. You know, so it's not like they're coming with a pipeline of an immediate opportunity.
• 23:21
  Marcia Riner | Profit Booster®: And every month you lose makes it harder and harder for the year.
• 23:24
  Jon Morris: So… So I like, I like that reality check.
• 23:30
  Jon Morris: Then what you have to figure out is, you know.
• 23:33
  Jon Morris: you know, how are you going to generate the leads from the marketing? And then, what role do you want your salespeople to be? Like, there are closers, there are hunters, there are sales operations people, and so you want to make sure you're investing in sales, but you've got to figure out what's your pain point. You know, I'll give you fiscal advocate as an example.
• 23:52
  Jon Morris: I happen to be, I think, a very good closer, you know, when I get an opportunity. I have a fairly high win rate, I think I'm good at building trust, and the trust is real, and I… you know, but my problem right now
• 24:06
  Jon Morris: is… I'm doing about 80 different things. You know, doing a podcast interview with you. Right before this, I was talking to a client. I had two client meetings this morning. I… I don't have the time, because of all the things I'm doing running this business, to be out…
• 24:24
  Marcia Riner | Profit Booster®: the closer.
• 24:25
  Jon Morris: At an event.
• 24:26
  Jon Morris: Actually, I have the capacity to do the closing. I don't have the capacity to do the hunting.
• 24:33
  Jon Morris: So, what I need is someone who is…
• 24:36
  Jon Morris: Literally playing golf four days a week with prospects, going to dinners at nighttime, flying to events and conferences and networking, and, you know, they live out of a hotel room with a bag in hand. That, to me, is one type of salesperson. They're the relationship salesperson.
• 24:55
  Jon Morris: I happen to have enough capacity, but at some point, I won't have enough capacity where I'll need to hire a closer, and I'll need someone who can
• 25:01
  Jon Morris: really develop the right strategy for the client, where the client's gonna trust them, that they're creating the right solution, and that they can deliver on what they're promising. And so, sales is, you know, multiple facets in terms of what type of role you need to hire for.
• 25:16
  Marcia Riner | Profit Booster®: I think that's across the board, though. That's a really accurate statement, but it is across the board. When you're looking at, you know, your investment in marketing, your investment in the R&D, your investment in your operations, right? You look at where the gaps are that are going to make the biggest headway.
• 25:34
  Marcia Riner | Profit Booster®: And you look at what your capacity, or the team's capacity is, and then that's where you start to fill the gaps, rather than just…
• 25:41
  Marcia Riner | Profit Booster®: In your earlier example of hiring the chief marketing, you know, director, you hire the person that can actually do the work that's having the gap that will make the biggest impact.
• 25:52
  Jon Morris: Yep.
• 25:53
  Marcia Riner | Profit Booster®: And I think that's what a lot of people miss. They just… they… they look for, you know, someone to fill it all. And especially in today's AI space, you know, they're trying to cut back and, you know, hire one that can do everything, rather than.
• 26:06
  Jon Morris: Yeah.
• 26:07
  Marcia Riner | Profit Booster®: Three that are more specifically aligned for what they need to do.
• 26:11
  Jon Morris: And I generally recommend doing an inch wide and a mile deep in terms of your strategy. You know, I'll just give you an example. You are my third podcast today.
• 26:21
  Marcia Riner | Profit Booster®: Oh my goodness.
• 26:22
  Jon Morris: I do 5 a week.
• 26:23
  Jon Morris: And my thoughts behind it are…
• 26:28
  Jon Morris: that most of the people I talk to might have, like, a very good audience, but don't have a massive audience. You know, it's not like I'm getting onto the front page of the Wall Street Journal, you know, or on their podcast. But if you can aggregate multiple podcasts, you can get decent volume.
• 26:44
  Marcia Riner | Profit Booster®: Yes.
• 26:45
  Jon Morris: But my business is a small business, I don't have a massive media budget. So, this is a strategy I deployed where I am using, you know, one team member a fraction of their time to help me secure these meetings. It's one play.
• 27:00
  Jon Morris: that we're scaling, and now we're going to bring 2 or 3 other employees, and we're going to start scheduling them. And so that's an example of, I found something that works, and now we're going to scale it across the organization.
• 27:12
  Marcia Riner | Profit Booster®: I love that. So is this something, this kind of strategy, or, or, insights that, that we're talking about here?
• 27:22
  Marcia Riner | Profit Booster®: I'm hearing that there's a lot of nuances that are involved in it. Is this easy for a business owner to sit down and look at, or do they absolutely need guidance from someone like you?
• 27:34
  Jon Morris: So…
• 27:36
  Jon Morris: It all depends on, obviously, who's internal. I'd love to say, yes, they have to go talk to me, but I'm going to give an honest answer. The first thing is, you have to organize your income statement to be able to answer questions really quickly. So, somebody has to be an expert at doing that.
• 27:53
  Marcia Riner | Profit Booster®: And be able to read and analyze what they're reading, right?
• 27:56
  Jon Morris: Yep, so I'll just give an example. I want to be able to know what percent of your revenue do you spend in sales and marketing? How profitably are you servicing your customers? What percent of your revenue do you spend on your back office? What percent do you spend on your executive team? What percent is your profit relative to revenue? Like, these are things that I want to instantaneously be able to answer.
• 28:16
  Marcia Riner | Profit Booster®: Yes.
• 28:16
  Jon Morris: So, you need somebody who knows how to organize all of your expenses and all of your revenue in a way that makes that very readable.
• 28:26
  Jon Morris: The second thing is, you then need to know, well, is that good or is that bad? Right?
• 28:32
  Marcia Riner | Profit Booster®: That's the benchmark, yep.
• 28:34
  Jon Morris: you know, if I tell you that you're spending You know, 23%
• 28:40
  Jon Morris: on your back office, so HR, legal, corporate IT, general admin, and finance, is that good or is that bad?
• 28:46
  Marcia Riner | Profit Booster®: Depends.
• 28:47
  Jon Morris: It depends, but I can tell you, like, in the professional service space, the benchmark is 15%.
• 28:53
  Marcia Riner | Profit Booster®: That's it, yeah.
• 28:53
  Jon Morris: So if you're spending 8% more, I'm gonna challenge you on how does that help you grow faster?
• 29:01
  Jon Morris: Versus if I got you down to, you know, 10%, and I gave you 5% more to sales and marketing.
• 29:07
  Jon Morris: And so, now, once you know these numbers, you know, there's not that many numbers, then you can start making really cool strategic decisions on how you live by those numbers.
• 29:18
  Marcia Riner | Profit Booster®: So it is doable, but it's advisable that you get people that understand the information that they're talking about, and where those… where that lies. Is that good or bad, right?
• 29:28
  Jon Morris: say that most of the times, having a really good CFO or fractional CFO is going to make you more money than it's going to lose you.
• 29:38
  Marcia Riner | Profit Booster®: Right.
• 29:38
  Jon Morris: There are two elements, you know, this is a real story. I was talking to a company yesterday. Companies in debt, they're losing money, and they've been losing money all year long.
• 29:53
  Jon Morris: But they had a massive cliff in their revenue in August.
• 29:58
  Jon Morris: And their expenses have actually gone up since August.
• 30:02
  Jon Morris: And I was talking to the person yesterday.
• 30:05
  Jon Morris: And, you know, it's not an existing customer, it's a prospective customer.
• 30:09
  Jon Morris: And, you know, they share their financials, and I'm looking at this, and I'm like, they need to cut $45,000 a month instantly.
• 30:19
  Marcia Riner | Profit Booster®: Yikes!
• 30:20
  Jon Morris: And, you know, I was like, well…
• 30:22
  Marcia Riner | Profit Booster®: like an Amazon cut, right?
• 30:24
  Jon Morris: Yep. But I mean, the reality is that, like, they're not gonna survive if they don't do it, and so having a financial steward
• 30:32
  Jon Morris: So there's two things I think that fractional CFOs do really well. The first thing is you need to be a financial steward, okay? The financial steward is going to give you the insights you need to cut $45,000, you know, of your expenses.
• 30:49
  Jon Morris: And oftentimes, they'll just throw that report over, and they just let it be. And then they'll be like, well, I did my job, I told them they gotta make the cuts, and they'll go back to closing the books. The second thing, which I think is probably equally, if not more important, is sense of urgency.
• 31:04
  Jon Morris: So, my comment to the guy was, I want you to have these cuts done by Friday.
• 31:09
  Jon Morris: And now, I don't know if it's realistic to cut that much of, you know, based on his total expenses in 4 days.
• 31:17
  Jon Morris: But what I was trying to do is be like, this is your number one priority. You know, like, you need to clear your schedule.
• 31:25
  Jon Morris: You need to do nothing but figure out who you're letting go, what other cuts you're going to do, how you're gonna go assign people to clients to take care of them, but you don't have a healthy business right now. You have a not-for-profit. I want to turn you into a for-profit business.
• 31:40
  Marcia Riner | Profit Booster®: Yeah, exactly, right? And you're not getting the tax deductions of the non-for-profits, so you better change something. In your expertise, would you have, or could you, once they engage you, help him know what to cut, and where to look, and how to shift? Absolutely.
• 31:58
  Marcia Riner | Profit Booster®: At the same time, raise the other side, so the revenue goes up, so that you're not just… you're not just cutting, you're working on a teeter-totter to make the whole thing go up.
• 32:07
  Jon Morris: So, in their scenario, it's a marketing agency.
• 32:12
  Jon Morris: And all I know is that his payroll is not unbundled. It's one line item, but that's… and, you know, typically, you want your payroll to be 55%
• 32:26
  Jon Morris: Of your total revenue?
• 32:28
  Marcia Riner | Profit Booster®: In a service company like.
• 32:29
  Jon Morris: In a service company, his was 85%.
• 32:31
  Marcia Riner | Profit Booster®: Okay.
• 32:32
  Jon Morris: Okay, so I can tell you that he needs to cut his payroll, but you want to unbundle it. So, you want to put everyone who does client work in the client work bucket, everyone who does the sales and marketing in the sales and marketing bucket.
• 32:44
  Marcia Riner | Profit Booster®: Which is data management!
• 32:46
  Jon Morris: Yeah.
• 32:47
  Marcia Riner | Profit Booster®: It is 100% data management, and if you had the right person in the front end that was able to manage your data properly, you could see and then make those decisions, right?
• 32:58
  Jon Morris: That's what you'.
• 32:58
  Marcia Riner | Profit Booster®: leading to, rather than just having it all bundled in payroll.
• 33:03
  Jon Morris: Now, I feel very confident if he was to work with us, he would go from losing lots of money to probably making, you know, $500,000 to $700,000 a year.
• 33:19
  Marcia Riner | Profit Booster®: Wow. I had a client last year that was losing a million and a half dollars.
• 33:24
  Jon Morris: This year, they're making a million and a half dollars.
• 33:26
  Marcia Riner | Profit Booster®: Well, see, that's the value of having the right person in the right role.
• 33:31
  Marcia Riner | Profit Booster®: And, you know, you don't have to hire them as a key employee, as the CFO on deck and pay them, you know, $180,000, $200,000 a year. You can hire a fractional that can work on a specific project for a period of time to adjust the money and make sure that the decisions and the data are giving you the right direction to go into.
• 33:54
  Jon Morris: Exactly.
• 33:55
  Marcia Riner | Profit Booster®: I mean, that's totally doable, right?
• 33:57
  Jon Morris: Totally doable. Let me take it a step further.
• 33:59
  Jon Morris: I've looked at all my clients between $0 and $20 million in revenue.
• 34:04
  Jon Morris: And only 2 of them, you know, I'm talking about, you know, 40 to 50 clients.
• 34:11
  Jon Morris: have had a CFO, an internal CFO, and it was very similar to that CMO example I gave you. Way overpaid.
• 34:19
  Jon Morris: And the ones that had that CFO that were way overpaid were the ones where their financials were in the worst shape.
• 34:27
  Jon Morris: When you hire, you know, it's just too expensive, and they were just building too much infrastructure, and they weren't adding any value. I found the ones between 0 and 20, really, when you get… find the right fractional CFO.
• 34:43
  Jon Morris: that they're the ones who are being much better financial stewards. I would say, after you get over 20 million, you can start hiring, you know, well-functioning CFOs that are going beyond controller-type duties and really acting as a CFO.
• 34:57
  Marcia Riner | Profit Booster®: Right.
• 34:58
  Marcia Riner | Profit Booster®: Right. John, this has been brilliant. It really opened the eyes of the challenges that businesses are having, because you know the business owner's got his head down, he's putting out fires, chasing customers.
• 35:10
  Marcia Riner | Profit Booster®: Trying to make things work, but then if he just, like, takes… he… if they just take a breath, look back, look at the data, and figure out where those changes might need to go.
• 35:21
  Marcia Riner | Profit Booster®: then they could invest in the right direction to grow both sides, the revenue side as well as managing the costs, so that they're profitable, right? I mean, isn't that the whole goal here?
• 35:32
  Jon Morris: I mean, and it's not just the profit, which is a huge part. It's the emotional component of being, you know, like, you can sleep at night when you're profitable.
• 35:42
  Marcia Riner | Profit Booster®: Less stress.
• 35:43
  Jon Morris: best, all the time, you know? I love it. When you're wondering how you're going to make payroll, and wondering how you're gonna pay the next vendor, and all the things that go along with it.
• 35:54
  Marcia Riner | Profit Booster®: I agree. Well, thank you so much for coming on and putting a bright, shiny light on this conversation, especially as we're in the new year and trying to get these things off and going. I think this is super important.
• 36:05
  Marcia Riner | Profit Booster®: But John, where can listeners find out more about you and Fiscal Advocates so that they can…
• 36:11
  Marcia Riner | Profit Booster®: Get some help, maybe get some guidance and direction and more information.
• 36:15
  Jon Morris: I'll give you 3 different ways. So the first one is, you can follow me on LinkedIn. I, post minimum of 3 times a week. It's generally providing lots of value of ways to think about strategic planning and finance management.
• 36:27
  Jon Morris: Second one is you can go to Fiscaladvocate.com, and in our resource section, there's an e-book I wrote that talks about my approach to finance, there's several blog posts, and then we also put all podcasts that I do on there as well.
• 36:44
  Marcia Riner | Profit Booster®: Nice.
• 36:44
  Jon Morris: And then the third one is, send me an email. I would love to hear from you. J-O-N at fiscaladvocate.com.
• 36:52
  Marcia Riner | Profit Booster®: Easy peasy.
• 36:53
  Jon Morris: You know, and yes, I think it's so important to have some guidance in that space, because that's really.
• 36:58
  Marcia Riner | Profit Booster®: Where you're going to be able to make those good decisions, and as a CEO of a company, that's your job, is to make those good decisions. And you know, as many of us are wearing 57 different hats, you know, maybe you can take off a couple of those hats to someone that they can help and guide you in the right spot, so that's really cool.
• 37:17
  Marcia Riner | Profit Booster®: All right, listeners, thanks for tuning in today. I hope you picked up some valuable insight and actionable ideas that'll help you make your business more profitable. And I know that this… this… having this, this idea of where your data is, and how you can make those decisions, and
• 37:33
  Marcia Riner | Profit Booster®: Where you can make those investments in sales and marketing and R&D to really flip the switch on your company, and make this year a great one. So, yeah, definitely go see John's stuff.
• 37:43
  Marcia Riner | Profit Booster®: Alright, before we go, if you're ready to bring in more of those right clients and keep more of the money you've earned, go grab the free Profit Booster Growth Map. It pinpoints 3 top moves that you can grow your revenue and stop your profit leaks fast. You can get it anytime at ProfitBooster.biz.
• 38:01
  Marcia Riner | Profit Booster®: And while you're at it, don't forget to subscribe! You don't want to miss future shows. You can always find Profit with a Plan on any of your favorite podcast platforms. And we're looking forward to more great profitable strategies on next week's show. So until then, make your plans and profit with them! Thanks so much, John.
• 38:20
  Jon Morris: Thank you.