Business Finances Masterclass with Jon Morris

Business owners, do your numbers drive action or confusion?

Let's navigate the landscape of essential financial metrics every agency should monitor, guided by our digital marketing veteran guest, Jon Morris. With a rich background founding EngineBI and Fiscal Advocate, Jon brings a wealth of experience to the discussion.

Dive into his insights on how he steered his initial one-man startup to a 250-employee success story, utilizing a financial framework known as the BASE scorecard. He breaks down the core metrics of cash, profit, revenue, renewals, and gross margin.

Jon also discusses how agencies can use these metrics to make tangible improvements through strategies like reducing churn, optimizing sales & marketing spend, and focusing R&D.

Don't let your agency's financial data be a source of perplexity. Tune in to gain insights and empower your business with a clearer understanding of the crucial metrics that drive success.

Specifically, this episode highlights the following themes:

• Importance of financial planning, alignment, and execution in a business.
• The necessity of reducing churn and investing in sales and marketing.
• Success stories from using Jon's financial scoring system

Links from this episode:

• Know more about Jon Morris: https://www.linkedin.com/in/jonmorrisramsayinnovations
• Learn more about EngineBI: https://enginebi.net
• Learn more about Fiscal Advocate: https://fiscaladvocate.com

Want to give your podcast the boost it needs to stay ahead of the competition? Check out honestpodcasts.com and take the first step toward achieving your podcasting goals!

And if you have a guest in mind who you think would be a great fit for this show, drop me a line at hello@honestpodcasts.com. 

Transcript

Jon Morris [00:00:00]:

One of the people who worked for me once said, you know, John, we don't necessarily have the best of the best. We have the best of what we can afford. Generally, if you're a smaller agency, you're not hiring, let's just say the Steve Jobs of the world as they are. Steve Jobs, you are hiring the Steve Jobs of the world when they're 22 years old and you have identified a hidden talent that will grow into be a superstar. You. You.

Travis Albritton [00:00:28]:

Welcome back to the Honest Marketing podcast, where you learn proven strategies to grow your business without selling your soul. I'm your host, Travis Allbriton, and today is just a business finance masterclass with my new friend, John Morris, who founded and grew his digital marketing agency from just him to over 250 employees before he had an eight figure exit. And now he has built software and does financial coaching for agency owners and business owners that want to scale and understand how a clear financial picture can unlock the ability to do that. So if you've ever been intimidated by running your own books or looking at your accounting reports and trying to figure out what's a good goal, what's a good growth goal, what's a good profit goal, we go through all of those in specifics in this episode. I was personally taking notes throughout the whole interview, and we'll remove that in the audio so you won't hear me typing away. But just a fantastic masterclass on how to run your business financially that I think everyone listening to will really appreciate. Definitely make sure to stick around to the very end where I'll give you my number one takeaway from our conversation with John. But here it is.

Travis Albritton [00:01:34]:

Let's dive in. Well, John, thank you so much for coming on the Honest Marketing podcast. Super excited to have you here.

Jon Morris [00:01:40]:

Travis, couldn't be more excited. Should be a lot of fun and hopefully I can pass on some decent insights and not put anyone to sleep.

Travis Albritton [00:01:47]:

No, I have no doubt. I have no doubt about that. So why don't we start off just to give anyone listening a little bit of context of who you are and your background, specifically in digital marketing and the agency world.

Jon Morris [00:01:59]:

Yeah, so I actually have been in the digital marketing and agency world since the mid 1990s. My last agency I found in 2004 called Arise Interactive. I grew from just me to about 250 people before selling it. Now I've launched two new businesses. One is called Engine BI, which is decision making software for marketing, communications firms, all types of agencies, really, to help you channel your time, to increase your cash, your profits and revenue, and help you understand where your problems and where you need to focus your time and energy. And then I have another business called Fiscal Advocate, which is a fractional CFO company specifically designed to help agencies. So now that I'm out of the agency world, I am still very much in the agency world.

Travis Albritton [00:02:49]:

Yeah, you've shifted from being like a practitioner into being a coach and sharing the things that you've learned, which is why I'm really excited that you're here, because you haven't just lived it, but you've also formulated the things that have worked into packages that are explainable so that I can personally benefit from our conversation. So I'm super excited about that. And I think the best place to start, though, is really telling that story of rise interactive, your first agency, because I think the origin of how you ended up starting it is really fascinating. But then I also would love to hear some of the things that you did to differentiate it from the slew of other digital marketing agencies that were popping on the scene in the early 2000s with the rise of SEO and then with social media coming out. And now it's like everyone and their brother seems to have a digital marketing agency. So I'd love to hear the things that you did early on to differentiate yourself, to allow you to scale from just being yourself to 250 employees.

Jon Morris [00:03:48]:

Absolutely. So a couple of things. One, the business was founded. I went to University of Chicago for business school. They have an annual business plan competition called the New Venture Challenge. I entered the competition. I took second place. I won $10,000, and that was the seed money to start the agency.

Jon Morris [00:04:06]:

And I actually had no interest in starting an agency. I really just wanted to win the competition. But when I did well in the competition, then I was thinking to myself, well, maybe I have something here. So I decided to continue to pursue it. But there are a few things that we did that I believe really helped ensure that I could scale the agency. I didn't realize it, but I now teach people what I call as the base framework, and it stands for business planning, alignment, scorecard and execution. And I followed the base framework without knowing that it was a framework. So start with business planning.

Jon Morris [00:04:50]:

Every June or July, I would actually start planning for the next year. And I always wanted to put up a big number relative to the current year, and I would start thinking about the investments I would need to make in order to incrementally improve. So I took budgeting and forecasting really seriously. I have a line that it can't be a goal unless you put budget against it. And so I was adamant about making sure that we really thought about what are the investments we want to make, and we actually pursued those investments. The second one, which is alignment, is, I believe, one of the most important and not talked about aspects of running an agency is making sure that the leadership team is aligned, the organization is aligned, and to be honest, one of the hardest decisions you need to make is to let people go. My number one reason to let somebody go would be if they were not aligned with the direction of the business. And don't get me wrong, I actually believe in organized disagreement.

Jon Morris [00:05:55]:

I don't want yes people, but when you have someone who doesn't believe in where you are strategically or philosophically headed, and they start getting other people to not agree with where you're headed strategically and philosophically. So I really worked on Alignment quite a bit. The scorecard, there are really only a few numbers that matter. It really is only cash, profit, and revenue. And I had very clear understanding of what my gross margin needed to be, what was considered a good growth rate, what was considered a good profit number. And so understanding these benchmarks really helped drove a lot of my decisions. And then the last one was execution. And it started with, I had a belief that everyone had to be an A player.

Jon Morris [00:06:42]:

I just finished the Steve Jobs book by Walter Isaacson, and Steve Jobs had a line saying that a players like working with a players. And in 2006, I fired 50% of the people I hired, and everyone thought I was nuts, but I knew exactly what I wanted. And my thoughts were that if you take your first ten employees, they all have to be all Stars. Like, one bad employee is 10% of your workforce. And so I was very adamant about hiring the best of the best. 2006 is actually when I created. But I created an analytics exam that had a 22% pass rate. You could not even interview if you failed the exam.

Jon Morris [00:07:26]:

And so I was looking for highly analytical people. So those quality of people plus really solid processes led to great execution. So kind of like, those were kind of some of the fundamental things. But what I would say that differentiated us is granularity. And it started off with Excel, and we would have these Excel pivot tables that just were substantially more granular, allow you to come up with insights at a much faster rate. It was almost like code. We would lock the data source, and a lot of people would try to reverse engineer our reports, and they just weren't able to do so. And they would ask if we'd unlock it.

Jon Morris [00:08:13]:

I'm like, no, that's our intellectual property. You don't get access to that page, but then eventually turned into software. But the idea is that we had these much more robust, much more granular reports, and then we had these highly analytical people. And so I would say that that was for a long, long time, our core differentiator. At the end of the day, though, our vision was to be the leaders in leveraging data to help brands make smarter marketing decisions, which is a very long, fancy way of saying we were data driven. But what I always explain to people is, you have to pass the second question test. So if I say our differentiator is data driven, and you say your differentiator is data driven, how am I more data driven than you? And so when you think of the word data, what type of data are you talking about? Media data, Customer data, consumer data, pricing data, inventory data, the list goes on of different types of data. We were very specifically focused on media data.

Jon Morris [00:09:15]:

And the way we developed all of our systems is that we could identify more waste quickly and we could redeploy that media from those wasteful areas to scalable, positive ROI areas at a much faster rate. Put that in perspective, and then I realize this was a very long winded answer. Rise Today has 55 people in its innovation team dedicated to building its own proprietary technology that's all focused on leveraging media data insights and implementing them.

Travis Albritton [00:09:46]:

Yeah, that's quite a few. Shows that it's still a priority. I want to circle back to two things. The first one is there's always that gap where, hypothetically, you want to build the team, you want to have the A Team, you want to be able to put the right people in the right seats, exit executing the daily operations as the founder in order to have that more leadership Vision. But there's the funding gap of building the revenue to be able to build that team. And so I'd love to hear what were the things that you did to really manage your time well, or the leverage of your time in order to bridge that gap to the place where you could start bringing those team players know.

Jon Morris [00:10:30]:

One of the people who worked for me once know, John, we don't necessarily have the best of the best. We have the best of what we can. So, you know, generally, if you're a smaller agency, you're not know, let's just say the Steve Jobs of the world as they are. Steve JObs, you are hiring the Steve Jobs of the world when they're 22 years old, and you have identified a hidden talent that will grow into be a superstar. And so one of the fundamental things I talk about is your leadership team. And there are four major positions. There's ahead of sales and marketing, ahead of client service, ahead of operations or administration and finance, and ahead of R and D. That's what your leadership team should look like.

Jon Morris [00:11:20]:

However, if you are small one, you might hold one of those four seats initially. You might hold all four of those seats initially. The second thing is your titles might not be C suite for all of them. If you're a small company, it might be you have a manager level or a director level or a VP level. And so you're going to have to identify that you're hiring the most talented person you can that you could afford. You also might want to look at other markets outside of the US so where you can get more for your money and hire more senior people. And so those are some of the strategies and ways to think about it for sure.

Travis Albritton [00:11:58]:

Now I want to dig into a little bit the business planning and the scorecard elements of your base framework. So when you said that you start planning for the next year in June and July, I had a momentary internal gasp of that's a long time in the future. But when you kept talking about it, it wasn't necessarily that you were just taking six months to figure out the plan, but it was making sure that you also projected into the next year all the things that you would need to actually be able to see those goals and those plans come to fruition in the way that you imagined that they could be or know that they could be. So when you're thinking about the next year and you're building those business goals, what is a good strategy versus a bad strategy? Or how do you formulate good goals that are well informed versus ones that you just kind of throw on a whiteboard because they look good but they're not really attached to any kind of tangible reality. Does that make sense?

Jon Morris [00:12:54]:

I think it makes sense. So I'll answer that to the best of my capabilities. First thing I want to talk about why June or July? Most people don't realize this, but especially if you're a retainer based agency, the next year starts around October. And let me explain what I mean by that. If you can win a client in January, then you're going to get twelve months worth of revenue. If you win a client in February, you get eleven months worth of revenue. So winning a client in January is one twelveth more valuable at the minimum than any other client. And it goes up and up as more time goes on.

Jon Morris [00:13:35]:

But typically you are dealing with a 30 to 60 day sales cycle. So that means that you have to win your leads to win a client in January, you have to start attracting leads in December, November or October. So there's not that much time. If you start your planning now, November 9 for next year, you lost an entire really crucial time period to think about. How do you increase your volume of leads so that you could get more clients in January? So by planning in July, that gives you three to four months of thinking, what do I need to do to ramp up leads in Q four so that I could have a great Q one the next year? So that's one of the things that I want people to think about. The second thing is, if you take the framework of just focusing on three metrics, cash, profit and revenue, and I'm going to talk about revenue for a second, there are only three numbers that matter for revenue. There are only two numbers that matter for cash, and there's only two numbers that matter for profit. And so the three numbers that matter for revenue is new business upselling and renewals.

Jon Morris [00:14:54]:

The number one goal should always be to start with renewals. So you should know what your churn rate is, and you should know what your attrition rate is. And I'll explain the difference between the two churn rate is if you take, let's just say, all the clients that you had that were existing customers on January 1, and then by December 31, how many of them did you lose? That would be your churn rate. So the number of loss versus the total number of customers you had at that moment in time. But imagine some of them were on two year contracts and weren't up for renewal. It makes it look like you might be doing better than you actually are. So attrition is how many clients that are up for renewal did you actually not win? That is, to me, a more important number that you need to gauge. And so if you have a leaky bucket, your business is going to be really difficult to grow.

Jon Morris [00:15:59]:

And so that, to me, is the starting point of your strategy is what are you going to do to make your service better so that you constantly are reducing churn? You're not going to get rid of churn. Some companies might go out of business. I had a client of mine. It was my largest client going into 2009, and its parent company was part of the whole financial disaster. And I actually think they were doing well, but they were gone. And I started the year off 40% down in revenue by just losing that one client. And so that's one element to think about, the second thing that I want people to think about is you really need to know the metrics of how much you need to spend in each bucket, in each area. For example, if you want to grow fast, you better be spending money in sales and marketing.

Jon Morris [00:16:56]:

You don't want to be the best kept secret. And one of the things I explain to people is if you do cold call outreach and you're saying, hey, come buy from me, and they're not ready to buy from you, you probably aren't going to get a sale. But when they are ready to buy from you, they're going to sit there and think about who are the three to four companies that can help me? And they might ask a friend, but for the most part, they spend like 30 seconds thinking about it and they're like, oh yeah, these are the companies I want to think about. And if you're going to get coffee, most people probably think about Starbucks. If you're thinking about going to buy some tool for your home, you're thinking about a Home Depot. So iT's no different for selecting your agency. And so you need to make sure you're investing in your sales and marketing accordingly. Did that help answer the question, Travis?

Travis Albritton [00:17:46]:

Absolutely. And I want you to dig into the other pieces of the scorecard too, the cash and the profit. Because the know, as a business owner, that's the thing I'm always trying to figure out what are the right things to keep track of and to pay attention to that are not just numbers on a spreadsheet, but they actually can drive action and decision from them. Right?

Jon Morris [00:18:07]:

So let me walk into the three. So for the revenue side, I said that it's winning new business, upsells and renewal. But then underneath winning new business, there's three metrics that matter. There is your average order value, there is your win rate, and there's how many at bats you get. So just from a revenue standpoint, you have to figure out, am I doing a good job at winning new business? And it might be that you are pitching all the time, but you're not winning a single deal. Or it might be that you are pitching all the time, you're winning all these deals, but you're winning what I call as mice. They're like hundreds of dollars a month and so they don't move the needle. Or it just might be that you just don't have enough at bats.

Jon Morris [00:18:50]:

And most people have an at bat problem, that they need more opportunities. So that's one element to look at. Then when it comes to upsells, it's pretty much the same metric. How many opportunities did you get? What was your win rate and what was the average order value? And then for retention, it's all about what's your churn rate and what's your attrition rate? And you want to look at it in two different ways. Literally, how many clients did you lose and then how much revenue did you lose? So that's the revenue side. On the profit side, there are two numbers that matter. The first number is your gross margin. Now, what I have found, talking to a lot of agency owners, is they do not know what their gross margin is, or they think they know what gross margin is, but they don't really know what it is.

Jon Morris [00:19:39]:

I would say 95% of the time there's confusion on gross Margin. So I'm just going to explain it real quickly. When you take all of your revenue and subtract, pass through. So if you have $30 million in revenue, including media, and then let's just say 27 million of it is media, your revenue is $3 million. Then you take all what I call cost of service. So all of the people, the freelancers, the technology, the travel and entertainment, and any other ancillary expenses that relate to doing client work, you subtract that from that net revenue, that $3 million, you want your gross margin to be 50% or greater. If it is less than 50%, let's just say it's between 40 and 50%. You will have to choose between making money or investing in the business.

Jon Morris [00:20:39]:

If it is less than 40%, you have about a 90% to 95% chance that you will be losing money. So this is a huge number that you need to understand. The second one is your SGNA. This stands for your selling, general and administrative expenses, and it relates to all of your expenses that are not client related. So your sales and marketing, your operations and finance, your executive team, your R and D budget, et cetera, that number should be 30% of your revenue, and specifically 8% for sales and marketing, 15% for Operations and finance, and 7% for your executive team. And although I mentioned R and D, I generally have R and D on the balance Sheet, and I recommend 5% of your revenue should go to R and D. 77% of the companies I benchmark spend zero. So most people do not spend money on R and D.

Jon Morris [00:21:33]:

So that's the profit side. And then on the cash side, there are two buckets. The first is what I call working capital, or your operating cash. This is to make sure that you have enough money to pay your bills, your employees, and your taxes. You should have a bank Account with a minimum of one month's payroll, plus 35% of your last three months profits if you have that in the bank, and that's a minimum. So you never go below that number. YOu will always have enough money to pay your employees, your taxes, and your bills. The second one is your savings account.

Jon Morris [00:22:10]:

This one should be your monthly overhead. So, however much cash is going out the door on a monthly basis, I want you to have a minimum of two times that number. So if you have $100,000 in cash going out the door in the month of November, I want you to have $200,000 in cash at a minimum. Most of the companies that come to us initially do not have close to that. And what I explain is that is okay, but over a twelve to 36 month process, I want us to slowly put cash away to get you to that number. That becomes your rainy day fund, but it also becomes your investment fund, where cool, unique opportunities will come your way. And if you don't have any cash, you can't take advantage of it. So those are the three buckets and the seven metrics that go underneath those three buckets.

Travis Albritton [00:23:03]:

This is great. This is like a master class in financial wellness for a business, which is, for anyone listening that has ever run a business or currently runs a business. This is like the best kept secret that everyone wishes they knew five years before they ever learned it, where you're just trying to solve problems, right? You're like, you have a problem, I got a product or service, let's make this happen. And you're just, like, always in execution mode. You're always trying to stay on top of things. And unless you have, like, a fractional CFO, which I want to talk to you a little bit about what that looks like, then it can feel like I don't really have time to look at the books. I just know that we're still figuring out a way to do okay. So everything must be great.

Travis Albritton [00:23:46]:

And so I really appreciate you breaking down the numbers, the percentages. I was taking notes the whole time so I can go back and look at my books after the fact to make sure I'm at least in the ballpark and now have some tangible goals to works towards.

Jon Morris [00:23:59]:

Travis. Let me tell you, though, the hardest part of running an agency is it is so easy to see the numBers. It is really hard to sometimes implement those numbers. Let me give you an example. I want you to be at a 50% gross margin. You're at a 43% gross margin, and your web development group is not doing well. They're in the 30s. Unless you have amazing pipeline, what that means is that you need a reduction in force, and that means you're going to have to fire people.

Jon Morris [00:24:35]:

And that is really unfun. Oftentimes these are people you love, you have emotional attachment to. A lot of people hire friends and family members. And so what I always explain to agency owners is, this is the worst part of the job, but it is a requirement of the job, and you need to be able to do it in a non emotional way or you're not going to flourish. And so it requires soul searching, and it requires people to really look within and answer the question, do they have what it takes to do the job? And if the answer is no, that's totally fine. But then you got to put someone in place who does have the strength to do the job.

Travis Albritton [00:25:20]:

Yeah, that's definitely the worst part of being a business owner, is like, yeah, when things are great, everyone's getting paid, everyone's getting fed, this is wonderful. We're making NC, and then you have to make those tough decisions. So I'm right there with you. It's never fun. But if you want the business to survive, if you want to survive, if you want the rest of the team to be able to continue to operate at a high level, that's just part of it, unless you're always going, which is pretty rare. So I want to pivot now to your software product, NGBI, which you've built specifically for helping marketing agencies and communications agencies with being able to not just see their numbers, but be able to make actionable decisions from them internally in order to grow. What are the core things that you, when you were developing the software and thinking about your own needs and the things that you encountered as an agency owner and the needs that you hear about as you consult and coach with agency owners. That really became core elements of NGBI to make it truly not just actionable, but integrated and integral to the success of agencies that start to tap into the potential of using it.

Jon Morris [00:26:38]:

So the idea came to me when I was at rise, and every three months we would meet with a business coach, and every three months he would say the exact same thing. He's like, the numbers and the insights you guys have is just amazing. He's like, I work with a lot of other agencies, and no one else has these insights. And he kept on saying, it's a business within itself. And so when I left Rise, and I didn't know what I wanted to do next, that just kept on resonating with me. And so a lot of this was based on the insights that we were putting together on a regular basis at rise that I thought would be valuable to the industry. And it's evolved. So I keep on talking about cash, profit and revenue.

Jon Morris [00:27:22]:

We're about to launch something called the CPR score. And we've come up with a way of scoring every single agency based on how much cash they have relative to monthly overhead, based on their profit as a percent of revenue, and based on their year over year revenue growth, that there is a calculated CPR score and then there is going to be benchmarking that goes along with that score. But what we're trying to do is a couple of things. I'm trying to have the least amount of numbers possible. If you notice, before now, I have one score that's broken up into three scores, which broke it up into seven scores. And I'm trying to make it so that if you don't like math, if you're scared of numbers, there's not that many to look at. And I want it to literally be like, just like you're driving, you have a red light or a green light, and you know what to do. I want people to be like, oh, I got a cash problem, or I got a revenue problem.

Jon Morris [00:28:19]:

And so it's all about focusing time and energy. It's based on numbers. It's based on putting it into a granular framework, like, you have to do the work, but it'll allow you to spend your time so much more intelligently so that you can ultimately increase cash profit and revenue?

Travis Albritton [00:28:36]:

Are there any stories of clients that have come in fully bought in to the methodology, fully bought into the scorecard that you're providing them, and implementing those to drive tangible change in their business. Are there any stories or examples that come to mind?

Jon Morris [00:28:49]:

There are multiple stories. One of the things that really frustrates me about my product is it's not one of the things where people are very open to admitting that, hey, my books were in shambles and I was losing money, and now I'm not. But I'll give you an example. I have a client of mine who's on the platform for six months. He is in the platform every single day, and you can literally see a night and day difference of profits going up, revenue going up. I have another client. We started off, I mentioned you, we have a fractional CFO company. I have a client that's on the platform, but also started with the fractional CFO company.

Jon Morris [00:29:32]:

They were in debt. They were not closing the books. They had no idea what their financials were, and they came in. We cleaned everything up for them. I have something called the 2050 30 20 role, which is 20% year over year revenue growth, 50% gross margin, 30% SG, and a 20% profit. They are a perfect 20 50 20 company now. Over this year, they have paid off half their debt, and they now plan on being completely debt free one year from now. And so it is a complete turnaround of their business.

Jon Morris [00:30:15]:

They're growing, they're scaling, they're winning huge clients. And so it's a really cool feeling. One of the examples I like to talk about why I enjoy this business so much is when I was at rise, I had a client that was a massive Fortune 500 company. They did amazing work with us. They paid really well. The people were wonderful. It's like your dream client. And one of the things I think about is if a new CEO came in and not only fired us, but stopped doing everything that we were doing in its entirety, they would still be a massive Fortune 500 client.

Jon Morris [00:31:00]:

Where the impact, I don't know how significant the impact is to their overall business, to people's lives. When I tell you the story of the person where we are a year away from taking them out of debt, that they're now profitable, that they're growing, this is a wonderful human being. This is someone I really enjoy working with. And it just feels so much more rewarding to work with. Let's just say 1 million to $10 million businesses where you're dealing with the owner and you see the impact that it has to them as an individual, 100%.

Travis Albritton [00:31:34]:

Now, you mentioned the fractional CFO business. Break that down a little bit for me. What do you do? Who do you serve? And then what problems are you solving at that fractional CFO level? Like at a high level, you need a CFO, somebody with that strategic vision for your financial future. But you're not in a position where it makes sense to have that person full team on your leadership team. But there's a certain amount of back and forth and integrating and things like that. So tell me a little bit about the service, what you do, and also the things that whenever you jump into that role in a business, in a company, what are the first couple of things that you're hitting to help them see immediate results from working with you?

Jon Morris [00:32:12]:

So when you think about a finance department, there's actually four different groups as it relates to agencies. So one group is tax. We don't work with tax at all. The second group is financing. So this is like securing debt, loans or raising equity. We don't work in that area at all. The next one is what I'll call as accounting. So this is one of the things we call is IAAP, which is invoicing AR accounts payable and payroll.

Jon Morris [00:32:47]:

And so you want to make sure that your employees always are getting paid on time. Your invoices are going out, you're collecting your cash, you're handling all those. What I call is conducting transactions that you have to just make sure that that's being operated smoothly. The next one is under your accounting, is your record keeping. And this is closing the books. But if you do it right, it's actually very strategic. So a couple of things that people don't really understand is you can't compare actuals to anything. If you don't close the books on time.

Jon Morris [00:33:23]:

And if your data is not organized in a certain way, you can't answer anything either way. So, for example, if I ask what your revenue is and you have it jumbled with your media, you might not be able to tell me. If I ask you what's your revenue by line of business, but you only have it as one line item that says sales, you're not going to be able to tell me. So, closing the books is how you organize your chart of accounts. And then the next one is how quickly do you close them? So at rise, we close them on the fourth business day. And a lot of companies, I have a client right now that was closing it once a year and just doing it for tax purposes. Some people close it once a month, but it takes them 30 days. So we want you to close it by the 10th business day, at a minimum.

Jon Morris [00:34:09]:

Then you get into the final group, which is your FP, and A, which is financial planning and analysis. This is the team that does your budgeting, your cash flow analysis, all of the insights that come along in your business, and they are really tied to that record keeping component, where if you're putting a budget together, one of the things you want to do is compare your actuals to what you originally projected to do. And so the main way I could say it is it's the infrastructure to answer questions that give you the insights to your business.

Travis Albritton [00:34:47]:

I think it's a good way to say it for sure. I think it's a good way to sum it up. Now, where can people go to learn more about you to learn more about engine bi to learn more about your fractional CFO service. If they're interested in working with you or having a conversation about what that would look like for them, where's the best place to send them?

Jon Morris [00:35:03]:

So a couple of things. If you follow me on LinkedIn, I do a post every Monday, Tuesday, Wednesday, Thursday, Friday on how to grow your agency. I talk a little bit about financial aspects and I talk a little bit about decision making every single day. The second thing is, if you are interested in the technology, and we also have a mastermind program that teaches that base framework, you can go to Enginebi. Net and you can sign up right then and there. And if you're interested in the fractional CFO, you can go to fiscaladvocate.com and those will probably be the best three sources.

Travis Albritton [00:35:38]:

Perfect. Well, John, thank you so much for breaking down the financial benchmarks that every business owner and agency owner needs to pay attention to giving us really specific goals for what a healthy business looks like. And really, I think just for me personally and I think for everyone listening, really just clarifying a lot of things that as a business owner can feel vague, can feel abstract, can feel like I don't really have a grasp on it. I think the last 35 minutes have been just exceptional for providing clarity and insight into what a path forward needs to look like. So really appreciate you sharing everything that you did.

Jon Morris [00:36:07]:

I'm so happy to hear that. And Travis, I loved being on the show, so I really appreciate you having me.

Travis Albritton [00:36:12]:

So my number one takeaway from my conversation with John was at a high level. I really did not appreciate why having really intense clarity around your financial picture, how it impacts and relates to all the other aspects of growing your business, the downstream effects of sales and marketing, which is why we're here, why we're talking about sales and marketing here on the podcast. And so I know I'm personally going to be going back, looking at my financials, looking at where I'm at, looking at my numbers to make sure that if I'm not in the ballpark for where I need to be, I have a path to get there and can put together a plan to get there so my business can be healthy, so it can be thriving, and so that I can reach the goals that I set for it. So I hope that you got a lot out of that episode. I certainly did. Make sure to go follow John over on LinkedIn. His LinkedIn profile is linked in the show notes below for your convenience to go and learn even more from him and definitely check out the different things that he is involved with, whether it's his software or his mastermind or his fractional CFO services. I think you'll get a lot of value from that.

Travis Albritton [00:37:11]:

Well, I hope you enjoyed another interview here on the Honest marketing podcast. And until next time, be honest.