Cashflow in der Beratungsfirma verbessern

0:00I sell financial planning to people 55 and older. Last year we did 12 million in revenue. We would like to be at 100 million in revenue in 4 years. And what's stopping us is money, specifically cash flow. >> Okay. So, what are you doing to acquire customers right now? >> What's that? >> How How are you acquiring customers right now? >> Uh YouTube and podcast. YouTube and podcast. >> Okay, so you have organic, so you're And it's your podcast or you doing podcast circuits?

0:26>> Uh it's my podcast, my partner Ari's podcast. >> Okay. Yeah, what's up? >> Um so you guys have organic following, you've got listeners, you've got watchers, cool. Um why is cash flow limiting the business? What's the model? You sell like 1% of AUM or like what's the >> 1% Yeah, tearing down from there, but starting at 1%. >> Okay. >> Uh we grew it from 30 team members to 64 last year, so we're just reinvesting all the profits back into growing quickly to bring on more clients.

0:56>> How many clients you have? >> About a thousand. >> How many clients per uh per manager, account manager? >> Uh no one's capped out yet because our fee advisors are new, but it'll probably cap out around 125 to 125 or so. >> What's the average assets under management per >> Two and a half million. >> Okay. Um so you said 125 so what's that? 250 million is managed per So that's 250,000.

1:24>> or so would be the cap, which is about two and a half million of revenue from that advisor. >> That can't be right, that's 10%. >> 300 >> right, my bad. I I carried an extra zero. You're good. Um he's like, "I'm a wealth advisor. I would know." You're good. So, okay, two and a half million per Okay, so that I mean that that that math maths. And it's just that they're all under underutilized right now? >> Um not underutilized, it's just we hire a lot up front and it takes six to eight months for that advisor to payback on that advisor to essentially break even. And so we front-loaded so much of that that the answer is probably just maybe slow down a little bit, but it's how do we balance the opportunity that's in front of us with we're turning away more leads than we would like to just because of

2:06>> From your organic? >> From organic. >> Yeah. >> So the the unit economic economics all make a ton of sense. It's just how much growth is too much growth before we >> Well, the nice thing is that this is totally excel sheetable, which you probably have already done. And so you're probably right at throttling at like the absolute fastest you can grow in terms of hiring and on-ramping and all that stuff. Um the only way to grow faster would be one of two ways. So way one would be that you basically develop a sales motion that gets people to pay upfront to become a customer, and that's where you could have some sort of like $10,000 plan or you know, whatever um that you could then credit towards their first year of services that they get from you, but that would accelerate the cash flow cycle for you. And so that would pull cash forward. So that'd be like way number one. Uh the other way is that you would raise money off of equity so that you could go faster. And this is such a a classic venture play of like we have a big opportunity, we're growing really fast, we need these people so that we can capture it, and our returns on capital are still really good. That's fine. It's just that you'll have to it'll be one of those two, or you'll grow at the rate that you're currently at, and then you'll be able to continue to grow faster as you make more money, and you'll the rate of growth will be limited by the there's a metric that I would find in there, but it's basically like that growth rate will be pinned to number of new customers on-boarded and activated or at, you know, assets that come in.

3:25>> Is there a framework to think through what's the How do you not grow so fast that you risk the whole business by go it's recurring revenue, so I think that risk is very small, but is there a net income number that if you're falling below that it's you're you're kind of being stupid? >> Yeah. By percentage or absolute? >> Percentage. Like if you fall below 10% net income. >> So you ask a really good question. Um it's actually just like you would say to your customers, it's about your tolerance for risk, which is entirely individual. If you ask Elon, he would say go negative a billion and then you're good to go, right? I know I'm being very serious. And on the other hand, there's some people you've got Dave Ramsey who's like never lose money.

4:03And like both of them are successful entrepreneurs, obviously to different degrees. Um, and so it's a risk-reward uh question. I would say that if you are bootstrap, which it sounds like you are, then you can't go below zero cuz you won't have money, right? But it's basically throttling that line and like that padding is just how confident you are in your projections. >> Mhm. >> And how much you want to take out now to buy the yacht, right? From the I mean really, like it it really is that. And so that number is kind of Well, so if you stopped growing today and you fully utilized all of the uh account managers that you have, what would top line and what would EBITDA be?

4:43>> We could get to top line of about uh 45 to 50 million. >> Okay. >> And EBITDA would be a little over half of that. >> Okay. And that's right now. And so that's kind of like what you'll be pacing in like 12 to 18 months, something like that. >> years, yeah. >> Okay. Um Okay. Uh I don't think there's anything wrong with your business. I think it's just like an expectation setting thing, which is that every point that you give up in margin, you'll recapture in growth and you also increase in risk.

5:13>> Mhm. >> Me personally, um I as much as I am an entrepreneur um I'm actually relatively risk averse. Um I don't I don't I like this framework from Keith Cunningham, which is what's the upside, what's the downside, and can I live with the downside? >> Mhm. >> And if you can't live with the downside, I don't do it. >> Mhm. >> Even if it's small. And so uh if you think that there's a chance that you going Let Let's say you, you know, increase your rate of growth by 30%. If Do think that that doubles the likelihood that you lose the whole business and then your reputation gets smashed?

5:50Is that worth it? >> Mhm. No. >> Right. And I see it as an like if you have a big like you say like there's this opportunity in front of me and so I'll give you something that Leila says to me a lot. Um, she's like that door isn't closed. It'll stay open and it'll only get bigger. >> Mhm. >> And so like the bigger you get, the more proof you have, the more that opportunity is going to still be there. But the converse of that is that if you have shitty service, reputation goes down, that door can close. And so I think the biggest risk that you take on by growing too fast is reputational even more than fiscal.

6:23Is that like your quality of service drops and then that lead flow dries up and then all of a sudden you're stuck with all these guys that are half utilized. And then you're not making any money. >> Yeah. >> And and and you you miss both. And so I think that's that's probably the greater opportunity that I'd be mindful of. Um, but basically it's like this is yours to not [ __ ] up. And so I would just say like then don't [ __ ] it up. >> Great. >> Does that make sense? >> It does. Thank you. >> Yep. If you're a business owner and you are not growing as fast as you'd like, I'd like to give you a free gift. So my team and I put together the $100 million scaling road map, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly where they got stuck and how they got past it. And so we broke it into these 10 stages and we made this little kind of quiz thing where if you put in your business information, it'll tell you where you're at and the most important part for you, what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources and finance. And so no matter what you're struggling with, someone else has already struggled with it and solved it. And so I'd like to give you this thing absolutely free. You can go to acquisition.com/roadmap, plug in your business information and if you want us to actually help you deconstruct the business and you're trying to scale, we'd love to help you out. On the thank you page, you can just book a call with my team and we will look at the business, see if we can help and if we can, we'll invite you out to Vegas and we'll do this in person live.