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EP339 Growth by Subtraction - The Strategy Most Founders Miss · Profit With A Plan

• 0:00
  Marcia Riner | Profit Booster®: Oh, God.
• 0:04
  Marcia Riner | Profit Booster®: Hey, what if the real reason your company isn't growing faster has nothing to do with the effort.
• 0:11
  Marcia Riner | Profit Booster®: Everything to do with the strategy.
• 0:13
  Marcia Riner | Profit Booster®: See, a lot of businesses hit a product-market fit and see early momentum, but then growth suddenly stalls.
• 0:21
  Marcia Riner | Profit Booster®: The instinct is to add more. More marketing, more offers, more tactics, but the approach often creates complexity instead of progress.
• 0:31
  Marcia Riner | Profit Booster®: In this episode of Profit with a Plan Podcast, we're talking about why many growth stage companies get stuck in the mindset shift that changes everything. Growth by subtraction instead of growth by addition.
• 0:45
  Marcia Riner | Profit Booster®: And today, you'll hear how to build a real growth plan before jumping into execution, why strategy comes before tactics if you ever want your company to scale to be strong, and a cash flow asset. So join me on today's Profit with Plan podcast.
• 1:05
  Marcia Riner | Profit Booster®: Hey entrepreneurs, are you 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.
• 1:18
  Marcia Riner | Profit Booster®: I'm Marcia Reiner, business growth strategist and the 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.
• 1:33
  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.
• 1:41
  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.
• 1:48
  Marcia Riner | Profit Booster®: And before we dive in, I've got something special for you.
• 1:51
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• 2:07
  Marcia Riner | Profit Booster®: Go get it for free at, profitbooster.biz, and start turning missed revenue into real money.
• 2:15
  Marcia Riner | Profit Booster®: Alright, let's jump into today's episode. My guest today is Yarin Gaun. He's an entrepreneur turned investor with a long track record of building and scaling companies.
• 2:27
  Marcia Riner | Profit Booster®: Yarin launched his first business just at 14, and no, it wasn't a lemonade stand. And he built it… he built into the Israelis' largest e-commerce platform for military goods before successfully exiting the company.
• 2:41
  Marcia Riner | Profit Booster®: After relocating to the U.S, he served as an entrepreneur in residence at a venture capital firm, where he focused on helping distressed startups stabilize and grow.
• 2:52
  Marcia Riner | Profit Booster®: Today, Yarin works closely with founders of growth-stage companies, helping them turn promising businesses into strong cash-flowing assets using the same strategic framework the private equity firm relies on.
• 3:05
  Marcia Riner | Profit Booster®: He, has mentored over 400 businesses through SCORE and the University of Chicago's Polsky Center, and he's passionate about giving founders access to growth playbooks that are usually reserved for elite investor networks. So, welcome to Profit with a Plan, Yarin.
• 3:24
  Yarin Gaon: Hi, Marissa, I'm happy to be here, thank you for having me.
• 3:26
  Marcia Riner | Profit Booster®: Absolutely, I love it. I'm super excited to talk about this. Planning is always in the heart of my soul, and I find that, you know, a lot of business owners get trapped in planning, so having this kind of conversation of planning, turning it into execution the right way, I think is going to be super interesting.
• 3:46
  Yarin Gaon: I'm excited. Planning is usually a nice-to-have activity, something you do maybe once a year, if you're… maybe once a quarter if you're running on EOS, but at a certain point, it becomes the highest leverage activity you can do. So before you spend your capital, or your effort, or your energy.
• 4:03
  Yarin Gaon: pause and plan, and you'll be much more successful. That's at least my… my frame of thought. I think you share the same.
• 4:12
  Marcia Riner | Profit Booster®: Exactly, hence profit with a plan, isn't it?
• 4:15
  Yarin Gaon: That's right.
• 4:15
  Marcia Riner | Profit Booster®: Yes!
• 4:16
  Yarin Gaon: It's in the title.
• 4:17
  Marcia Riner | Profit Booster®: I know, I know, it's great, though. So, why don't people plan? I mean, I think that's the thing, is they go running and chasing squirrels and shiny objects, and they don't really step back and go, how's this gonna work, and what am I gonna, you know, what am I gonna expect out of it?
• 4:35
  Yarin Gaon: Yeah, it's… it's…
• 4:37
  Yarin Gaon: It's a really interesting question, why don't people plan? They know conceptually that they need to, but it always gets pushed to the, like, the nice-to-have when we have some time, and there comes a point where, if you don't do it, it becomes very expensive not to.
• 4:53
  Yarin Gaon: Why… My thinking is that a lot of founders
• 4:59
  Yarin Gaon: build their businesses using hustle, right? They are in hustle mode. I want to do more.
• 5:05
  Marcia Riner | Profit Booster®: They wear it like a badge, right? Yeah, it's like I'm a hustler. And it's great, and hustle is a great tactic, it's also a great strategy for a certain size, right? As you start…
• 5:16
  Yarin Gaon: It's all about action. You want to take action, you want to see what works, you try different products, different type of customers. You say yes, you chase opportunities.
• 5:25
  Yarin Gaon: And there comes a point where business grows, and you found that initial, what we call, product-market fit, where you have some paying clients, and things are working, where this hustle mentality is actually hurting them.
• 5:38
  Marcia Riner | Profit Booster®: Because…
• 5:39
  Yarin Gaon: because we'll talk a little bit more about growth by addition and growth by subtraction, but they keep applying the mindset of, let's do more. More products, more clients, more lines of services. And as business grows, it becomes harder and harder to actually manage.
• 5:57
  Yarin Gaon: And because You're growing, but you're still relatively small.
• 6:02
  Yarin Gaon: You actually become mediocre.
• 6:04
  Marcia Riner | Profit Booster®: Amazing.
• 6:04
  Yarin Gaon: you do.
• 6:05
  Yarin Gaon: So, it dilutes your effort when you try to do too much. Does that make sense?
• 6:11
  Marcia Riner | Profit Booster®: A thousand percent, you know, so many people go chasing, well, hey, they're doing this, so we have to add this to our books, and I think the problem that I think happens, that they don't realize until they're underwater with it, is that they keep adding to their plate.
• 6:27
  Marcia Riner | Profit Booster®: But they don't necessarily have the structure or the ability to scale to manage that, and then they're just… now they're working 60 or 80 hours a week trying to maintain that more factor, which is terrible. Yes. Terrible, terrible.
• 6:45
  Yarin Gaon: So, what do they… what do most founders do at that stage?
• 6:50
  Yarin Gaon: they turn into fixing operations, right? They feel like, I'm working 60 hours a week, something in my operations is not working, I need to put more processes in place. I need more SOPs, I need to put EOS in place, I need better meetings. They don't think to themselves.
• 7:07
  Yarin Gaon: Maybe I'm just doing too much.
• 7:10
  Yarin Gaon: So, not managing what is, but thinking, okay, what of everything I do, right, profit is an average, right? It's an average of all of our activities. Some add a lot to profit, some actually take away from profit.
• 7:24
  Yarin Gaon: That planning, that pause that needs to happen at some point, where you decide, okay, so.
• 7:29
  Yarin Gaon: what am I spending my time on? It's not just me as an individual, but now there's a team, there's a business.
• 7:36
  Yarin Gaon: is the missing piece, right? They try to fix it with systems, but it's not a system problem, at least not at that stage.
• 7:45
  Marcia Riner | Profit Booster®: planning problem. It's really a priority problem.
• 7:48
  Marcia Riner | Profit Booster®: Mmm.
• 7:49
  Yarin Gaon: Planning is a byproduct of setting priorities, it's…
• 7:52
  Yarin Gaon: what are we doing, and what are we deciding that we're not doing? And that's usually the hardest part.
• 7:58
  Marcia Riner | Profit Booster®: Let's take things off our plate. Hi, no!
• 8:02
  Yarin Gaon: Because, please.
• 8:04
  Marcia Riner | Profit Booster®: I was gonna say, that's… that's a really interesting perspective, is that they're… that they're so busy going, what am I doing, right? But they're never going.
• 8:12
  Marcia Riner | Profit Booster®: maybe we shouldn't be doing this, right? And that downsizing factor, but… but I think where people, what I hear, and what I see. Maybe I don't often hear it, but I see it.
• 8:24
  Marcia Riner | Profit Booster®: is the fear mindset, right? They're like, but if I don't do what my competition's doing, or I don't do the latest, greatest thing, and add AI to my skill set, then I'm behind, or I'm lost. And it's that fear that they're gonna miss out.
• 8:42
  Yarin Gaon: There's two things that happen here, in my opinion.
• 8:45
  Yarin Gaon: One is that fear, and that fear, in my opinion, is based on not being clear on their core competencies or strategic advantages.
• 8:54
  Yarin Gaon: If you know, as a business owner, to articulate what makes this business unique, what are the core competencies that make the secret sauce, you would not chase hype.
• 9:06
  Yarin Gaon: You don't need to chase hype, because it's outside of your core competency, it's not where the value's being generated, really. So that's one. And the second is a lot of business owners chase revenue.
• 9:17
  Yarin Gaon: Because revenue is easy to measure, right? It's very hard to say, whoa, I just got this amazing offer, secured it, it's a lot of money, but they view it from the lens of revenue, or sales, and not from the lens of profit, or EBITDA. And if you start viewing stuff from the lens of profit.
• 9:36
  Yarin Gaon: it becomes much easier to say, hey, this is… this looks like an opportunity, but when I actually look at it from a profit lens, it's not really a great opportunity for my bottom line, and it's a shift.
• 9:49
  Marcia Riner | Profit Booster®: That's a fantastic shift and way to look at things, because they don't. That is such a common, you know, problem that they do look at the revenue. Oh, top line, top line, top line, but then they don't realize what they had to do to get that, you know, to close that deal, to make, you know, to deliver on that opportunity.
• 10:08
  Marcia Riner | Profit Booster®: Right? That they didn't realize that they had 3 people working on it instead of 2 people, or even 1 person, and all those things add up, that they're going, wow, we made all this money this year, but then how come I don't have any left in my pocket?
• 10:22
  Yarin Gaon: Yeah.
• 10:24
  Yarin Gaon: Yes, so common. And it's not because…
• 10:27
  Yarin Gaon: they don't want to make profit, it's because there's a… it's a mixture of a mindset shift that needs to happen, and a little bit more tools that help them see where profit is coming from, to really be confident saying no.
• 10:43
  Marcia Riner | Profit Booster®: So let's talk a little bit about growth by subtraction, growth by addition. Yeah, please.
• 10:47
  Yarin Gaon: The idea here that as companies grow from 0 to 1, 0 to 2, they grow by addition, right? The hustle. I'm adding more stuff. More product lines, more services, more segments. I'm just trying. I'm trying to see more people, more staff, more overhead. I'm trying to see what works.
• 11:05
  Yarin Gaon: Right, I'm trying to find this elusive, what we call, product-market fit, where there's this value generated, and I'm able to capture it.
• 11:11
  Yarin Gaon: But As we grow, That strategy breaks, because everything starts to be…
• 11:19
  Yarin Gaon: complex and expensive. So, when you are at a $5 million, Stage, or revenue.
• 11:27
  Yarin Gaon: Adding more stuff is expensive, your decisions, because…
• 11:33
  Yarin Gaon: You have limited amount of resources.
• 11:36
  Yarin Gaon: And you're deploying them on multiple different bets. Bets, quote-unquote beds.
• 11:41
  Yarin Gaon: Too many things.
• 11:42
  Yarin Gaon: Too many things to manage, and it costs… there's… cost is attention, cost is capital, cost is energy, there's… there's a lot of output that goes into serving these multiple lines of products or services.
• 11:55
  Yarin Gaon: And the shift is, in order to get from that, to break the ceiling, right, I want to get from 5 to…
• 12:02
  Yarin Gaon: 20.
• 12:03
  Yarin Gaon: The idea is not to add more. The instinct is to add more. More product line, more type of segments, more type of clients.
• 12:12
  Yarin Gaon: But the strategy, or the key strategy of doing that, truly, is doubling down.
• 12:18
  Yarin Gaon: It's to understand
• 12:20
  Yarin Gaon: what is the engine here, truly? So, we do a bunch of stuff in this business, and we serve multiple types of clients, and we sell multiple type of stuff, but what is actually moving the needle
• 12:32
  Yarin Gaon: Profit-wise, not revenue-wise. And if you are able to articulate this, you will double down
• 12:39
  Yarin Gaon: And you will start saying no in confidence, and that is the key for growth. You hyper-focus on a very small thing that you do extremely well, and that is the key, because otherwise you become mediocre at a lot of different things, instead of becoming excellent at one thing, not forever.
• 12:57
  Yarin Gaon: But until you reach the next stage, where you can start expanding.
• 13:01
  Yarin Gaon: The problem is they just expend too early in their life cycle as companies.
• 13:07
  Marcia Riner | Profit Booster®: I get it now, I totally see it, because, you know, as a business owner and an entrepreneur, you want to… you want to add more things to it, because it gets kind of boring. Oh, I only deliver vanilla pudding. That's it. It's vanilla pudding. We do vanilla pudding like nobody does, right? But then you want to kind of go, hey, I'd like some chocolate, or maybe some, you know, pistachio, or something else in there, right?
• 13:29
  Marcia Riner | Profit Booster®: And because we get bored, right? But that doesn't… it doesn't mean that you can't and you won't add those, but what I'm hearing is that you're securing the vanilla pudding market first.
• 13:43
  Marcia Riner | Profit Booster®: Correct. And you're getting really, really good, and you're gonna be known that you are the king of vanilla pudding. I don't know where I got on this vanilla pudding.
• 13:51
  Yarin Gaon: I know, but it's okay.
• 13:52
  Marcia Riner | Profit Booster®: some pudding.
• 13:53
  Yarin Gaon: Is he?
• 13:54
  Marcia Riner | Profit Booster®: But then you can expand later when the opportunity arises for you to say, hey, the market fit says I need to add chocolate.
• 14:02
  Yarin Gaon: Yes. They… a lot of companies think that they got to 2, 3, 4 million dollars in revenue. I tapped it. It's like, I'm done. Right.
• 14:11
  Marcia Riner | Profit Booster®: what's fiddle anymore.
• 14:13
  Yarin Gaon: No, like, I sold as much vanilla as I can, and no one wants to buy more vanilla. I need to start offering chocolate.
• 14:19
  Yarin Gaon: But that's not the right approach, because if you are playing in the US,
• 14:23
  Yarin Gaon: Two, three, four million dollar business is a baby business.
• 14:26
  Marcia Riner | Profit Booster®: Baby.
• 14:27
  Yarin Gaon: Baby, baby. So, I look at this from an investor perspective, from a risk perspective, it's much, much less risky
• 14:35
  Yarin Gaon: to take a model that works, and replicate it in different markets, or to expand that model that I know that works, then to try to experiment with other business models, or other lines of product, or other types of segments is just more unknown.
• 14:52
  Yarin Gaon: But I know that something is working, so how far can I take what is working and replicate it?
• 15:00
  Yarin Gaon: Does that make sense?
• 15:01
  Marcia Riner | Profit Booster®: Absolutely. So, let me ask you a question. So, like… like you mentioned, you know, early-stage companies, right, they're… they're throwing spaghetti on the wall and seeing what sticks. They're… they're… they're trying different things to figure it out. When do you suggest that they start to…
• 15:18
  Marcia Riner | Profit Booster®: reduce the trial and error, and really dial in that product line that they're working on. Because oftentimes, that's not going to happen right out of the gate.
• 15:27
  Yarin Gaon: It's not. It's different for each company. That's why we have a range, right? I can't put a number at $2 million, or at 3. But…
• 15:36
  Marcia Riner | Profit Booster®: And your third month! That's right.
• 15:38
  Yarin Gaon: Usually, when that happens is, It's a combination of a couple of things.
• 15:42
  Yarin Gaon: You have consistent revenue that comes from a consistent base.
• 15:47
  Yarin Gaon: Meaning that you know that something is working consistently. And consistently is the key word here, because we're trying to replicate, really, we're trying to identify what is working, and double down on it.
• 16:01
  Yarin Gaon: in order to understand what's working, we have to have some sort of consistency. So would you know that you have a…
• 16:07
  Yarin Gaon: Business that is working, consistently, and is cash flow positive, which is important, because if it's not cash flow positive, it's not really…
• 16:15
  Marcia Riner | Profit Booster®: It's not working.
• 16:16
  Yarin Gaon: Sorry to say that, it's not. If you're burning cash to acquire customers, and it does… if you're in the red, your business model is not baked yet. Yes. But when you're in the black, and something is working, profit is coming.
• 16:29
  Yarin Gaon: But complexity is also creeping, and there can be.
• 16:32
  Marcia Riner | Profit Booster®: Hmm.
• 16:33
  Yarin Gaon: Either from your margin is getting lower, or it can be emotional, meaning, like, me as a founder, it becomes super hard for me to manage the operation that I've created.
• 16:45
  Yarin Gaon: It can become from, like, we are about to expand, so there's needs to be some sort of, like, friction point that happens. That's a good opportunity to pause.
• 16:55
  Yarin Gaon: And take a reflection moment and say, okay.
• 16:58
  Yarin Gaon: From everything that I've built, and I've built a bunch of stuff inside a $2 million business is doing a bunch of stuff.
• 17:04
  Yarin Gaon: Where is the juice?
• 17:06
  Yarin Gaon: Really.
• 17:07
  Marcia Riner | Profit Booster®: Where is the juice?
• 17:08
  Yarin Gaon: And almost, like, in…
• 17:20
  Yarin Gaon: Well, we got, we got out.
• 17:22
  Marcia Riner | Profit Booster®: There you go, we love technology, yeah, so… so where's the juice? And… and I have a quick question for it before I forget. So, that… or… or maybe a statement.
• 17:32
  Marcia Riner | Profit Booster®: when you… when you start to look at these problems, right, it doesn't always mean January 1st, or if you're smart and planning October for January 1st. It means right then, when that friction is coming.
• 17:47
  Marcia Riner | Profit Booster®: That's when you're gonna take that pause and look at your company, right?
• 17:51
  Yarin Gaon: If you're smart. And I please, I urge businesses, if you hear us, Pause.
• 17:58
  Yarin Gaon: There is an inherent incline to run, because we are founders. We're building, we're hustling, we're running, running, running, running, running, running, running.
• 18:07
  Yarin Gaon: At some point, Find an excuse to pause.
• 18:12
  Yarin Gaon: Because the pause and the realignment is where the value is. So you don't want to just scale your inefficiency. You don't want to scale everything you have currently.
• 18:23
  Yarin Gaon: Find what you love doing, and what's producing a lot of… not revenue, profit.
• 18:30
  Yarin Gaon: And then scale that. It's logical, hard to pause.
• 18:35
  Yarin Gaon: But that's where the juice is. That's what profit equity does. Buy your company, and they strip all the nonsense, and they find the core, and they scale the core. They don't scale the whole business, because a lot of the business is irrelevant.
• 18:50
  Yarin Gaon: You want to find the.
• 18:51
  Marcia Riner | Profit Booster®: baggage.
• 18:52
  Yarin Gaon: Yes, it's just… it's like debt, not debt in the sense of capital, but, like, it's stuff that you've built, or you made a decision once, 5 years ago, to acquire…
• 19:02
  Marcia Riner | Profit Booster®: Still hanging on your back.
• 19:04
  Yarin Gaon: Correct, and it's weighing your profit down, because profit is an average game, right? So, it's just simple math. If you can find what's weighing you down…
• 19:12
  Marcia Riner | Profit Booster®: So, hang on just a second, because that's my next question. So, you come from the M&A world and the venture capital world, where you're looking at hard numbers, and you're looking at percentages and averages, and what is the competition doing, and what should we expect in this area, but a lot of business owners
• 19:31
  Marcia Riner | Profit Booster®: Know their thing.
• 19:32
  Marcia Riner | Profit Booster®: They know…
• 19:34
  Marcia Riner | Profit Booster®: They know how to sell their thing, or a couple things, and they don't really get into the finances, so in the numbers and simple math may be simple to you, but it may be incredibly overwhelming to the business owner. So, what could we do to maybe simplify that in a way that they can go.
• 19:54
  Marcia Riner | Profit Booster®: Okay, I'm feeling the friction. I'm gonna take a pause.
• 19:59
  Marcia Riner | Profit Booster®: How do I do that, right?
• 20:01
  Yarin Gaon: Fair enough. It's fair enough. So let's… let's… I just…
• 20:04
  Yarin Gaon: Before I went to M&A, I was a founder myself. So, I built 4 companies, I'm…
• 20:11
  Yarin Gaon: I've felt it as a founder more than I felt it as a VC, because I wasn't in the investing part of VC, I was in the distress. So, the question is how you take that information and you put it in a digestible format. So, I want to share with you how I did this.
• 20:26
  Marcia Riner | Profit Booster®: Great. I believe that.
• 20:29
  Yarin Gaon: If there's a company that
• 20:31
  Yarin Gaon: has… okay, rephrase. At a 2, 3, 4, 5 million dollar stage, what usually I see are companies with strong founders and some team around them, so they can execute. They can make stuff happen, they can sell, they don't have an execution problem.
• 20:47
  Yarin Gaon: And I also see, a lot of times product-market fit, meaning there's product that people love buying, and repeatedly… happy customers.
• 20:55
  Yarin Gaon: The missing piece is clarity.
• 20:58
  Yarin Gaon: Specifically around their finance, strategy, and operations. So let's talk about finance specifically.
• 21:05
  Yarin Gaon: I believe that if you help founders just put their information in a more digestible format.
• 21:11
  Yarin Gaon: They will make smarter decisions, just by putting the information in a different format.
• 21:17
  Marcia Riner | Profit Booster®: Just being able to see it.
• 21:19
  Yarin Gaon: If you see, it's the first…
• 21:22
  Yarin Gaon: first step of making smarter decisions is to have a little bit more understanding of what the number… it is a numbers game at the end of the day. Business is people plus math. So, it is an… it's a mixture, right? So, you need to understand the math. But today, looking at a profit and loss statement.
• 21:40
  Yarin Gaon: It doesn't tell you the story, it tells you a revenue story, it doesn't tell you a profit story, so…
• 21:45
  Marcia Riner | Profit Booster®: Mmm.
• 21:45
  Yarin Gaon: What I built is I built, like, a canvas. I call it a financial clarity canvas. It's one page, and you basically put your finances
• 21:54
  Yarin Gaon: into this bucket, but it starts making sense. Because all of a sudden, if you put in your… there's a calculator on an Excel spreadsheet that you can play with, but what it gives you is
• 22:06
  Yarin Gaon: your P&L But broken into a revenue stream, or a type of customers, or…
• 22:11
  Marcia Riner | Profit Booster®: Product A, product B.
• 22:14
  Yarin Gaon: And when you start dissecting this, you start seeing themes.
• 22:18
  Yarin Gaon: Those themes are worth, because now we know which revenue stream will generate the most profit, not revenue, which revenue stream is the least profitable. Where in my funnel is it breaking? Is it the acquisition cost? It's too expensive? Is it my conversion? What should I fix?
• 22:35
  Yarin Gaon: Just by having this information presented in a little bit more digestible way.
• 22:42
  Marcia Riner | Profit Booster®: It's, like, 50% of making smarter decisions, because…
• 22:46
  Yarin Gaon: Founders are rational people. They don't want to make dumb decisions, and it's not from… it's because they're… it's just…
• 22:54
  Yarin Gaon: hard. It's hard to present this in a way that makes sense, that you can drive action.
• 22:59
  Marcia Riner | Profit Booster®: Yes, to somebody like us, who are business owners that are action takers and go-getters, right? Rather than they're not number crunchers, where someone who is skilled in the number crunching area can go, oh, I can read all this stuff here, and you're going.
• 23:14
  Marcia Riner | Profit Booster®: What?
• 23:15
  Yarin Gaon: Yeah.
• 23:15
  Marcia Riner | Profit Booster®: Right?
• 23:16
  Marcia Riner | Profit Booster®: Which they know, right? And that's why they focus so much on revenue and miss the profit line, because they don't know how to read the data that's in front of them. And we're not saying business owners are dumb, because we're not. It's just, like you said, if you spread it out in a digestible manner, then you could start to see where things are broken and where the clarity comes in.
• 23:37
  Yarin Gaon: Yes, and a lot of times, they leave it for their bookkeepers or accountant to do. It's not their job, they don't know how to do this. It is your job, as a business owner, to… really, you've built a machine at the end of the day. It's a machine, it's a series of processes and a machine.
• 23:54
  Yarin Gaon: Take a look at what's working, what's not working. And you have to be the one that does the analysis, because when you do the analysis.
• 24:02
  Yarin Gaon: you can really get into the insights. A bookkeeper would not give you insights. No. Insights are, oh, I thought that I'm serving this customer type, but I'm actually losing money on that customer type.
• 24:15
  Yarin Gaon: That's not something a bookkeeper would give you. You don't need a bookkeeper, and you don't… Pause.
• 24:23
  Yarin Gaon: Put it in a digestible format.
• 24:26
  Yarin Gaon: And just…
• 24:29
  Yarin Gaon: make data-driven decisions. I know it's, like, a super vague term, data-driven decisions, but at the end of the day.
• 24:35
  Yarin Gaon: If we don't have some sort of data, we're just making guesses.
• 24:39
  Marcia Riner | Profit Booster®: Yes, and that's where you get in trouble.
• 24:41
  Yarin Gaon: Yes.
• 24:42
  Marcia Riner | Profit Booster®: That's where you get in serious trouble, especially around this kind of information. But I love that if you just break it into simple things, how many product lines do you have?
• 24:52
  Marcia Riner | Profit Booster®: Right? Okay, product, service, well, I deliver these 3 services. Okay, well, where's the revenue on each? What are your cost of goods sold on each, right?
• 25:03
  Marcia Riner | Profit Booster®: What's the average cost that you have to fill in, whether you sell one or none, right? It's not that hard, but when you have a digestible…
• 25:12
  Marcia Riner | Profit Booster®: Like you said, your spreadsheet that really breaks it apart, then you can go.
• 25:17
  Marcia Riner | Profit Booster®: Oh, I never knew that, because I didn't see it before. Now that you see it.
• 25:23
  Marcia Riner | Profit Booster®: You can make a decision.
• 25:25
  Yarin Gaon: Correct.
• 25:26
  Yarin Gaon: And I'll give you another tip.
• 25:28
  Marcia Riner | Profit Booster®: Please.
• 25:28
  Yarin Gaon: Most business owners only look at cost of goods sold.
• 25:33
  Yarin Gaon: So, they look at how much it cost me to deliver, and then they take the gross margin.
• 25:39
  Marcia Riner | Profit Booster®: Yep. What?
• 25:40
  Marcia Riner | Profit Booster®: And then they go, profit!
• 25:44
  Yarin Gaon: There are a lot of overheads.
• 25:47
  Yarin Gaon: that only exist because you have this type of product, or serve this type of client, and they hide in the overhead, and you're never gonna see them in your gross. I'll give you an example. Let's say that I have a store, and I have an e-com channel, e-commerce channel, and I have a brick-and-mortar store.
• 26:06
  Yarin Gaon: And let's say that I compare my sales from my e-commerce store and my brick and mortar.
• 26:14
  Yarin Gaon: Utility bills.
• 26:16
  Yarin Gaon: Only exists in a brick-and-mortar location, so it's an overhead that hides
• 26:22
  Yarin Gaon: But if you don't attribute it to the specific channel, you will never see it.
• 26:27
  Yarin Gaon: Or, there's someone who needs to be by the counter all day.
• 26:31
  Yarin Gaon: There's labor that only exists because you have a brick and mortar, or there's different costs that hide… there are different costs that hide in your overhead.
• 26:43
  Yarin Gaon: That only happen because you are delivering on a specific type of service, or having a specific type of revenue stream.
• 26:52
  Yarin Gaon: And people forget.
• 26:54
  Yarin Gaon: And when you add it, you get true profit.
• 26:57
  Marcia Riner | Profit Booster®: And all of a sudden, it's like, oh…
• 27:00
  Yarin Gaon: I thought this store was super profitable, but if you take utility and insurance and labor, maybe the e-commerce is 3 times more profit. You don't know.
• 27:09
  Marcia Riner | Profit Booster®: And we're not telling you to go e-commerce, but we're.
• 27:11
  Yarin Gaon: We're not.
• 27:12
  Marcia Riner | Profit Booster®: that you have to look at your fixed operating costs.
• 27:16
  Marcia Riner | Profit Booster®: And blend them through the rest of your company in a way, or the rest of your product line, to see where those numbers come in. I had a similar client that had the same problem. She kept saying, oh, well, it's just labor and products to deliver this service, and I'm like, no.
• 27:32
  Yarin Gaon: excuse me.
• 27:33
  Marcia Riner | Profit Booster®: got this, this, this, and that hanging out back there. Where does that fit in? So now, where she thought that she had all this money and revenue coming in, when you filtered in all those other things, her profit margin was down significantly. And she… that's why she didn't have the money in her pocket at the end of the month.
• 27:53
  Marcia Riner | Profit Booster®: You know, and I think that's where… that's where your accountants are incredibly important, bookkeepers are incredibly important, tax people are incredibly important, the financial space is really important.
• 28:06
  Marcia Riner | Profit Booster®: But you have to understand that the role that that person is providing for the company, and understand what the data you need back to make decisions, you've got to have somebody doing that data properly for you, whether it's you, a spreadsheet.
• 28:22
  Marcia Riner | Profit Booster®: AI, right? Or a CFO, maybe, is in that role. But you have to have that kind of data analysis so you can make clear decisions. I mean, it's hard to harp on it, but it's the reality of running your company.
• 28:39
  Yarin Gaon: Especially if you want to grow profitably. If you just want to grow sales, go sell more. No problem. Go find more sales, and you will grow.
• 28:46
  Marcia Riner | Profit Booster®: So is the more.
• 28:48
  Yarin Gaon: Yeah, you will grow more, you will have a bigger business, it'll probably be much more complex to manage, it will probably be less profitable as you grow.
• 28:56
  Yarin Gaon: But if you want to grow profitably and self-fund your growth.
• 29:00
  Yarin Gaon: Then, you have to identify what is actually providing
• 29:04
  Yarin Gaon: Profit and value at the end of it.
• 29:07
  Yarin Gaon: And if you're able to identify, which is not rocket science, I wanna, like, articulate this. It's not rocket science, you need to pause.
• 29:14
  Yarin Gaon: You need to pause, you need to do a little bit of work, and kind of step away from your business and work on the business, not in the business, but, like.
• 29:23
  Yarin Gaon: Pause for a moment, start with beta. Again, the belief is, would… Clarity around some data.
• 29:32
  Yarin Gaon: you will make smarter decisions. It's the key… it's the beginning of smarter decisions, more prof… when I say smarter, I mean more profitable decisions. It's just based them on facts, not on assumptions.
• 29:44
  Marcia Riner | Profit Booster®: Right.
• 29:45
  Marcia Riner | Profit Booster®: And garbage in is garbage out, so those… to be accurate.
• 29:50
  Yarin Gaon: And that's why I hire a good bookkeeper that actually knows…
• 29:53
  Marcia Riner | Profit Booster®: Exactly.
• 29:53
  Yarin Gaon: how to put the information. But their job is to put information and catalog it, not to analyze it. It is your job.
• 30:00
  Marcia Riner | Profit Booster®: Yes, love it.
• 30:02
  Marcia Riner | Profit Booster®: Yeah, and we can go on and on and on about this topic to help business owners to really look at
• 30:08
  Marcia Riner | Profit Booster®: what they're doing in a manner of saying, this is where you should be doubling down, and investing your time, energy, and effort into this lane, but you can't do that without all of the other stuff around it, which I love that you keep saying the word pause.
• 30:25
  Marcia Riner | Profit Booster®: Like, I have in my calendar every week an opportunity to pause and go and reflect back on my week, right? What did I do right? What did I do wrong? What could I… where did I miss? What gaps, holes? Where am I going next week, right? We should all do that on some scale.
• 30:41
  Marcia Riner | Profit Booster®: And like you said, if it's a bigger company and we're gonna pause quarterly where we have enough data.
• 30:47
  Marcia Riner | Profit Booster®: That's what we should be doing, is taking that pause and looking at the data so we can make decisions going forward. It's such an important step, and I know so many people miss that.
• 30:58
  Yarin Gaon: If they miss it, here's a tip. If you miss it and you don't find a time, connect the pause to an external event.
• 31:04
  Yarin Gaon: Something happens. So either you are trying to build something new, or you are about to maybe get a loan, or you're about to hire someone. Any external event that is happening is an excuse to pause.
• 31:20
  Marcia Riner | Profit Booster®: forgive.
• 31:22
  Yarin Gaon: Two days. Pause for 2 days.
• 31:24
  Yarin Gaon: Close your phone, 2 days, And just walk through the steps.
• 31:29
  Yarin Gaon: And… come up with better decisions.
• 31:32
  Marcia Riner | Profit Booster®: Love it. So where can listeners find out more about you and how they can pause?
• 31:37
  Yarin Gaon: Yeah, so basically what we talked about today is the financial component. We talked about clarity, and there's financial clarity, strategic clarity, and operational clarity. Most companies focus on operational clarity, right? That's EOS, that's, like, processes, meeting, KPI, scorecard.
• 31:53
  Yarin Gaon: The real value comes, in my opinion, at specific stage, from the strategic clarity.
• 31:59
  Marcia Riner | Profit Booster®: And that happens. After you get the numbers.
• 32:02
  Yarin Gaon: Before you decide what you're going to do.
• 32:04
  Yarin Gaon: Right? So I basically took all my learnings and I put them into a private equity playbook. A playbook. Basically, a series of steps that if I came into your company and I bought your company as private equity, this is what I would do to make it more profitable and to increase its value.
• 32:21
  Yarin Gaon: And instead of pushing it down their throat, I'm opening it publicly, it's publicly available for free. So, you can just take it, it's at playbook.fractional.partners.
• 32:32
  Yarin Gaon: And it's basically a step-by-step
• 32:35
  Yarin Gaon: It's open, you can do it yourself, you can do it with your team, or you can do it with me leading it, that walks you through the process of
• 32:43
  Yarin Gaon: How do I get financial clarity? How do I understand, really, where profit is coming from? Then.
• 32:48
  Yarin Gaon: what exactly are we doubling down on? Who is our single segment for the next 12 months? What is our single revenue stream? What are our core capabilities? And creating this one-page source of truth that we call Strategic Clarity Canvas. And only then we end up with the operation, which is what needs to happen next quarter.
• 33:07
  Marcia Riner | Profit Booster®: It's…
• 33:07
  Yarin Gaon: available, it's free, because I feel knowledge should not be gated… should not be gated.
• 33:13
  Yarin Gaon: There's no secrets. There is no secret. So anybody that sells you secrets, there aren't any secrets. They're just… no. They are activities.
• 33:23
  Yarin Gaon: and things that needs to happen to increase the profitability of your business and the value of your company. It's not rocket science.
• 33:30
  Yarin Gaon: Follow the steps, you can do it yourself if you need me.
• 33:34
  Yarin Gaon: you can… I can help with that. I basically facilitate this as companies grow, and I help them implement this, but they can do it themselves. And just better decisions plus clarity equals growth, profitable growth. It's not rocket science, it's pretty…
• 33:51
  Yarin Gaon: Simple but not easy equation.
• 33:53
  Marcia Riner | Profit Booster®: But it's simple once you know how to do it, and it sounds like this playbook is giving you the step-by-step path on how to do this.
• 34:01
  Yarin Gaon: Yes.
• 34:02
  Marcia Riner | Profit Booster®: Love it. Yes. Love it.
• 34:04
  Marcia Riner | Profit Booster®: Alright, thanks so much for tuning in today. I hope you picked up some valuable insights and actionable ideas that'll help you make your business more profitable. And the word is profitable!
• 34:14
  Yarin Gaon: Profitable, profitable growth!
• 34:16
  Marcia Riner | Profit Booster®: sales profitable!
• 34:18
  Yarin Gaon: Next time you come into a sale, ask yourself, what is the actual profit I'm gonna take out of it? That is a question. We're not in the sales business. We're in the profit business.
• 34:28
  Marcia Riner | Profit Booster®: Love it. Exactly, exactly.
• 34:31
  Marcia Riner | Profit Booster®: Great, great, great information. Alright, so before you go, if you're ready to bring in more of the right clients and keep more of what you earn, go grab my free Profit Booster Growth Map. It'll pinpoint the top 3 moves to grow your revenue and stop the profit leaks fast. It's all what we're talking about, and it's definitely something that'd be very easy and supportive of Yaren's playbook, so I would encourage you to go get both of them. You can go grab
• 34:56
  Marcia Riner | Profit Booster®: of mine at ProfitBooster.biz.
• 34:58
  Marcia Riner | Profit Booster®: And 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. Looking forward to more profitable strategies on next week's show. So until then, make your plans and profit with them. Thanks so much, Yarn.
• 35:16
  Yarin Gaon: Thank you for having me.