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  • Writer's pictureYaakov Citron

Jon Morris Talks: Prioritizing Business Health Through Financial Expertise Solutions

Welcome to Solo2CEO. We’re here with Jon Morris, Chief Executive Officer of EngineBI and Founder and Chairman of Fiscal Advocate.






Jon, tell me a bit about what you do.

I've been an entrepreneur for most of my adult life, mainly in the marketing agency space. My last agency grew from just me to about 250 people before I sold it in 2020. Now, I help professional service companies focus their time to increase cash, profit, and revenue by teaching them a framework on how to spend their time and money more efficiently.


I want to understand what made you transition from marketing to the financial space. Let's start with why you sold the company.

The first business day of the year is my favorite day; I call it Game Day. I usually spend about six months planning for it. In 2019, I felt unexcited about Game Day, just as I realized that my plan for 2020 was the same as 2019. I took it as a sign that it was time to move on. My original exit strategy was to run the business for 20 years, but as I got married and had a family, what became important to me was diversifying my wealth. The combination of losing excitement for Game Day and wanting to diversify led me to sell Rise Interactive.


What companies are you running now?

I have two companies called EngineBI and Fiscal Advocate.

Engine BI helps you implement the BASE framework. It offers a mastermind program, one-on-one coaching, and a technology solution to integrate the 14 rituals.

Fiscal Advocate, on the other hand, is an outsourced finance department for professional service companies. It helps you take a data-driven approach to running your agency, which is very important for implementing the BASE framework effectively


Tell me more about the CPR Score.

We created the CPR Score, which is like a credit score for a professional service company. Everything we do is focused on helping companies increase their CPR score.

The CPR score stands for the three main metrics that matter for a business’s health - Cash, Profit, and Revenue. It's designed to be a measure of a company’s financial health, similar to a credit score for individuals. If a business has a higher CPR score, it means that there is better business health, leading to increased wealth, job opportunities, and responsibilities for employees.


What is the BASE framework and how does it help increase the CPR score?


BASE stands for Business Planning, Alignment, Scorecard, and Execution.

The BASE framework needs a solid finance department because of the data-driven approach of the framework. For example, one ritual involves budgeting and forecasting, and another involves closing your books monthly for accurate month-end analysis. If you don’t close your books properly, you can't analyze your cash, profit, and revenue effectively. Fiscal Advocate helps with this by providing the necessary financial expertise.


Can you explain the importance of cash flow, profit, and revenue in business growth?

Let's start with cash flow. If you have a lot of cash, you can do exciting things. Building a cash reserve allows for opportunities to grow your business. Also, you never know when a crisis like COVID might hit, so a reserve of cash is a necessity.

For profit, in the professional service space, there are typically expected numbers. If you're doing well, you should have a 20% earnings before interest, taxes, depreciation and amortization (EBITDA). It's important to stay within benchmarks. Profitability is key because no one starts a business to not make money. Profit reflects the health of the organization.

Lastly, year-over-year revenue growth is a critical measurement of a CEO. You need to perform well and increase your wealth if you are competing with multiple companies offering the same business as yours. Your revenue growth can lead to multiple expansions when you sell, typically at a multiple of EBITDA.


What metrics do people often prioritize wrongly over CPR (Cash Flow, Profit, Revenue)?

People often track too many different metrics, making decision-making hard. Most important metrics should be tracked monthly or quarterly because it will not be easy to make meaningful decisions if you perform weekly tracking.

For example, at Rise, we grew quickly and needed to hire aggressively. We tracked metrics like the number of resumes, interviews, and offers to ensure we supported revenue growth. While not directly cash, profit, or revenue, it was connected to revenue by ensuring we had enough staff to serve customers.


How is revenue growth measured within the CPR framework?

For revenue growth, there are only three main numbers to focus on: winning new business, renewal rate, and upsells. For new business, we look at four specific numbers: the number of opportunities (at-bats), win rate, average order value, and the speed of closing deals (velocity). By tracking these, you can understand and improve your performance effectively.


Why do you think your business must focus on financial management?


In my experience, financial management is often overlooked in business. People focus heavily on client acquisition and production but forget the importance of intentional financial decisions. By focusing on what truly matters, I wanted to help businesses make more informed and strategic financial choices, moving away from reactive decisions to intentional, data-driven strategies.


What is the importance of monthly bookkeeping for business development?

Monthly bookkeeping is for business development and not just for tax compliance. You can make informed decisions on cash, profit, and revenue if you have a good month-end analysis. For example, you should know what percentage of your revenue is spent on sales and marketing. If you spend less, you’re at a competitive disadvantage. Understanding these numbers helps you scale and grow effectively.


Why is it necessary to put a budget against a business goal?

If your goal is to double your revenue but you do not want to spend enough on sales and marketing, then you cannot achieve such a significant goal. The secret is to invest properly in your sales and marketing. Goals need to have a budget allocated to them to be realistic and achievable. Without that investment, you’re unlikely to reach your targets.

To grow, you have to allocate a budget for it and measure the impact. The two key numbers in sales and marketing are what percent of your revenue you spend on it and how effective that spend is. Spending money doesn't guarantee it's well spent, so you need to constantly optimize to get higher output from your spending.


What are some common mistakes you've made in your business journey?

For many years, I didn't focus enough on cash or profit, only on year-over-year revenue growth. If I could go back, I'd focus on all three. We grew organically, but I missed opportunities to scale faster through acquisitions. For instance, in 2016, I raised money and saw peers using their funds to buy companies and expand quickly. We invested in technology and grew organically, but they grew faster through acquisitions. Having cash isn't enough; it's about how you use it. Acquisitions can quickly add revenue compared to organic growth.


What is a good gross margin for a professional service company?

Typically, a professional service company should aim for a gross margin between 50% and 60%. If your gross margin is above 60%, you need to check if you’re overworking your team or under-delivering to customers, which could lead to client churn. If your gross margin is between 40% and 50%, you're likely choosing between being profitable and investing in your business, but not both. A gross margin below 40% usually means you are losing money.


How should companies categorize their expenses?

All expenses can be categorized into four groups: sales and marketing, operations and finance, your executive team, and research and development (R&D). Operations and finance include HR, legal, corporate IT, general administrative expenses, and finance. By properly categorizing expenses, it helps in analyzing and managing your costs effectively.


What common mistakes do businesses make with their finances?

The first common mistake is not breaking out revenue by line of business, making it difficult to analyze trends and performance across different segments. The second mistake is not calculating gross margin or gross profit, which is important for understanding the financial health of your business. The third mistake is not properly categorizing expenses, leading to confusion and poor economic management. Lastly, many businesses don’t retain enough cash, even if they are profitable, owners taking all the cash negatively affects the growth of the company.

How would you advise someone to start tracking their business expenditures effectively?

I recommend starting with a month-end analysis. Organize your data to answer important questions, like what percent of your revenue you spend on sales and marketing and your gross margin. Most companies need to learn their gross margin or how to calculate it. The first step is to know your gross margin by line of business, team member, or client. This way you can identify unprofitable clients or lines of business.


What advice would you give to a CEO or entrepreneur of a service business?


Treat your income statement as your boss, as it objectively shows if your numbers are improving or not. Hold yourself accountable to its performance. Another important tip is to avoid being a "business of the living dead," where you make just enough money to stay afloat but never truly profit. Aim for growth and financial health rather than mere survival.


How can someone get in touch with you?


The best way to connect with me is through LinkedIn, where I post regularly and connect with everyone. You can also email me at jon@enginebi.net. For more information about my companies, visit fiscaladvocate.com or enginebi.net.



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