Jon Morris: If You Want to Grow, Budget for It

Jon Morris founded Rise Interactive in 2004 and grew it from just himself to a little under $40 million in revenue before selling it. Now he runs Fiscal Advocate, helping service-based companies use their financial data to grow cash, profit margin and revenue. His question for every owner who says growth is all word of mouth: "How come I'm the only marketer that believes in marketing? ... If you want to grow, you can't wish it to happen. You have to budget for it to happen."

Read the full episode recap, with Jon's scorecard and diagrams: Jon Morris: If You Want to Grow, You Have to Budget for It.

What Jon and Jeremy cover

• The service-firm scorecard: 20% profit, 20% growth a year (you double every 3.8 years) and a 50 to 60% gross margin.
• Why the average agency spends 8% of revenue on sales and marketing, and why Jon wants clients on the half that spends more.
• A client with a 60% blended gross margin where paid search subsidized a social media line that was losing money.
• Growth company or lifestyle company: two $5M clients, one happy at $6M with 25% EBITDA, one aiming for $100M. Jeremy compares Raven Tools under Jon Henshaw with what happened after it was sold.
• Putting 5% of the budget toward lowercase-i innovation, and what GEO means for SEO agencies.
• Sales is three jobs: hunters, sales operations and closers. Why cold-calling BDRs rarely win net-new clients, and the golf-playing outside rep who won Rise's insurance business.
• Inbound leads are gold: track response time, then qualify from MQL to SQL to opportunity with BANT (budget, authority, need, timing).
• Referring out bad-fit leads on commission: "If the phone is ringing, why not monetize it?"
• What a CFO actually is, and why a true CFO hire usually waits until $20 to $50M in revenue.

Resources Jon mentioned

• His ebook on budgeting, forecasting and gross margin: Decision-Making Science for Agencies
• Fiscal Advocate's financial planning and analysis service and their webinars on benchmarks for professional services firms
• Jon posts on LinkedIn at least three times a week

Related episodes

Jeremy's Raven Tools story is the backdrop to his conversation with Jon Henshaw. Jake Melendy covers speed-to-lead, Karen Aucoin makes the case for referring work to competitors, and Sal Tirabassi explains fractional CFO services. More in the small business marketing that actually works collection and the interview archive.

Host: Jeremy Rivera. Guest: Jon Morris, CEO, Fiscal Advocate.