Most business owners do not need prettier dashboards. They need financial reporting that helps them make better decisions, faster.

In this episode of Leaders & Legacies, Craig talks with Salvatore Tirabassi about what founder-led and family-owned companies often miss in their finance function. Sal explains why useful reporting starts with a single source of truth, not another spreadsheet or visual layer on top of messy data.

The conversation centers on bringing private-equity-grade finance to businesses that are not ready to hire a full executive team. That means practical reporting, forecasting, calculators, and workflows that help owners see what is really happening in the business.

Sal also makes the case that reporting should not consume the month. When the process is built correctly, owners spend less time compiling numbers and more time analyzing what the numbers mean.

Craig and Sal get into the metrics owners should understand cold: minimum cash, revenue, EBITDA, customer acquisition cost, customer lifetime value, employee tenure, and turnover. These numbers are not just finance trivia. They shape hiring, growth, cash decisions, and the owner’s ability to see risk early.

They also discuss why a missed acquisition-cost target should not end with vague disappointment. The better question is where the funnel broke, what caused the miss, and what needs to change before more money gets poured into the same system.

Want to learn more about Salvatore Tirabassi's work? Check out his website at https://cfoproanalytics.com/.

Connect with Salvatore Tirabassi on LinkedIn at https://www.linkedin.com/in/stirabassi/.

You can also reach Salvatore directly at stirabassi@cfoproanalytics.com.

Think you'd be a great guest on the show? Apply at https://podcast.allies4me.com/podcast-guest/.

Want to learn more about Craig Andrews' work at allies4me? Check out his website at https://allies4me.com/.

Key Points & Timestamps

• 00:08:06 - Sal explains how CFOPro+Analytics gives founder-led and owner-operated businesses access to private-equity-grade finance capability without hiring a full-time executive team.
• 00:11:53 - Sal describes the value of a single source of truth that supports reporting, forecasting, calculators, and workflows.
• 00:13:37 - Craig and Sal discuss why monthly reporting should take hours, not days, so leaders can spend their time analyzing instead of compiling.
• 00:16:26 - Sal outlines the numbers owners should understand, including minimum cash, revenue, EBITDA, customer acquisition cost, customer lifetime value, employee tenure, and turnover.
• 00:20:27 - Sal explains why customer acquisition cost and lifetime value are fundamental building blocks for understanding growth, payback, and risk.
• 00:28:28 - Sal warns that pressing the growth gas pedal can expose channel limits and hidden inefficiencies.
• 00:33:23 - Sal explains why acquisition-cost misses should be diagnosed through the funnel instead of treated as vague marketing disappointment.

Transcript

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Today I want to welcome Salvatore Tirabassi. I don't know if I pronounce that right, but that's my question.

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Good job.

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He is the founder and managing director of CFO Pro and Analytics.

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Sow, as he goes by, works with founder-led and family-owned businesses in the $3 million

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to $100 million revenue range, helping term financial data into operational decisions.

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It brings a rare blend of capital and operating perspective with a background as a partner

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in growth, equity, and venture capital funds, plus deep experience in strategic forecasting

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and capital management.

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Sal, welcome.

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Hey, how are you?

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Good to see you.

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Good to see you.

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I've been looking forward to it.

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Anyway, one of the things we were talking in the green room, and there's one thing you

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mentioned, just kind of casually mentioned, but I've gotten no more, it had something to

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do with some professor at Harvard.

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Oh, yeah.

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Yeah, it wasn't a professor, it was the senior common room at Elliott House at Harvard where

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I was an undergrad, and at least I think it was called the senior common room, but during

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senior week, it was pretty rowdy times, I think, in general, like senior week, there's

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a lot of stuff going on just before graduation, and a lot of people don't know this, but

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underneath the river houses at Harvard, if you've ever been to Cambridge, are tunnels

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that literally connect all the buildings, and the food services people use that to move

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food around from the central kitchens, et cetera, and a couple of my roommates were

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explorers of the tunnels over the years, and they knew where they all went.

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I actually maybe was in one for about five minutes, so I just wasn't that interested in

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exploring, but one of my roommates named Matt, who was a diver, he's a smaller guy,

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think of a very flexible gymnast diver, he had explored it all, and he had discovered

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that there was a way to get into the senior common room, which is a club that retired professors

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would meet in to drink and socialize, and they had a full bar in there.

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And so he showed up, I would say it was like 10 days left in senior week, and he showed

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up in the dorm or wherever we were, and he said, hey, I just figured out that I can get

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into the senior common room, and we can basically just like start using their booze.

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So we kind of mapped out a plan, and the plan was actually that the senior common room,

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because they served food in there, and he discovered this with one of my other roommates,

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he was small enough and flexible enough to fit into the dumb waiter, which if you don't

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know what a dumb waiter is, it's one of these food elevators that's like literally very small,

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and he would cram himself into the dumb waiter, and my other roommate said, where does this

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dumb waiter go? And he went up into the senior common room, and he discovered like that's

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where all the booze was stashed. So systematically, he just went in there every day, and literally

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over the 10 days with like all the partying and stuff that was going on at school, we literally

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emptied out the entire senior common room bar day by day by day, like just having party

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after party. And it went, I remember it went like from high quality stuff that, you know,

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young people like to drink, like if you're mixing drinks or whatever, all the way to the

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end, the only stuff that was left was like port wine, and just other stuff that we had

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no interest in, but we ended up just using all of it. So will he go in and lower it back

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through? Yeah, he would lower it down. He'd go in, he would, he sometimes he'd come back

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down and he'd be like, what do you guys want? What should we get? Then he'd go back up and

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then he would load it up, lower the dumb waiter down, you get a bunch of booze, and then he'd

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hop back in and then come back down himself. So this is like a notions 11 stunt where they

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never know how it's all done. Yeah, they never know how they're like, how did anybody get in

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there? Because they never could have imagined, you know, that that he could fit in the dumb

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waiter. But he could, he was like, you know, he was a diver. He was very flexible and he

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wasn't a big guy. He's not a big guy. He's probably like, five, six max, you know, he

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probably weighs like 130 pounds kind of thing. So my goodness. Yeah, that's awesome. Well,

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I love, I love the fact that, you know, the retired faculty is coming in there, they walk in

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there, they've been cleaned out. There's like, no windows broken, no door, nothing, nothing.

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Yeah, it's awesome. Yeah. And you know, this was back, this was back before, like, you know,

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early 90s at Harvard, there was like, there were really no rules about drinking in your, in your

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dorm or any of that stuff. It was like, you know, like, just a, they just treated you kind of like

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adults. Now there's like a lot of rules and, you know, there's probably much more controls. I mean,

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I know myself from my kids that go to college. It's just not as easy as it was back then. But, but

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yeah, maybe Zuckerberg did it when he sat up drunk and, you know, hacked into the, you know,

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brought down the network. Yeah. Maybe that was the triggering event. Yeah.

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Don't need any more drunk smart guys who are doing this. Right. Right. Yeah. But we have like,

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great parties like the whole week because of it. Oh my goodness. That's amazing. Everybody wanted

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to hang with us. That is so awesome. So you go from that into the numbers business.

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You help people sort out their numbers. Yeah. I didn't start out that way, but I was kind of

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close in. I started out as a management consultant. So there was a lot of like data and analysis.

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And then I moved into investing. I was a venture capitalist for 15 years in a couple of different

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funds. And, you know, that's, you know, a lot of, you know, analysis on investment returns and

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evaluating businesses, evaluating management teams.

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And then after that, I became a CFO in an operating business that grew very quickly.

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And I kind of packaged that whole experience, my investing experience, my consulting experience,

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which really helps a lot in the work that I do today because you're really trained as a consultant

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to be able to explain things, present information in usable ways. And then, of course, my CFO

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experience, I'm kind of packaging it all together into this service that is really meant to give

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founders and owner operators of businesses that are not, you know, these high flying AI or

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venture capital back companies, give them access to talent and capabilities that really give them an

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a grade private equity grade finance capability for less than the cost of full time.

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So by putting all that know how together with a team that knows how to execute, we can go in and

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do a lot of great work for these people that way exceeds the level of talent they might be able to

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recruit. And we can do it faster and less expensive than full time because we're, you know,

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we have a methodology and a plan of action. And we're very strategic. So

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when you said something there that kind of triggered a conversation I actually had earlier

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today that you said private equity grade fund or finances, you know, the conversation I was having

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own a portfolio of companies, they have like a basic template of reporting that they're wanting. So

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they can sit there and they can quickly scan across all their portfolio and know what's going well

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and what's going poorly. Yeah, a lot of them do, especially the bigger ones. A friend of mine from

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business school runs a private equity fund. And I don't know how far along they've gotten with

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this, but their goal was to really take all portfolio company data and drop it into what's called an

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ETL like a like snowflake would be one of the brands that you would think of where the data is

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like continuously pumped in. And then on their side their analytics team is able to like really

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streamline the reporting and do all that kind of stuff so that they've got, you know, a better and

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faster way of looking at the financial performance of their companies as opposed to like

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waiting for an email with a report and that kind of stuff. But I think, you know, it takes a certain

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type of fund and certainly one with enough resources to be able to invest in that kind of thing.

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But it makes it makes a lot of sense. Well, the reason I was going there is, you know,

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you figure with private equity, they put a lot of thoughts into their reporting because they don't

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spend hours kind of digging through your numbers. They wouldn't be able to look at it. And so when

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you said private equity level reporting, but for small businesses, the thing that struck me was kind

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of the learning, you know, the benefit of the learning of, Hey, what really matters, you know,

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it's big PE guys. This is what matters. And if you're running a business, you should probably

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also be tracking these things that matter to PE. Yeah, it's that and also it's the functional

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execution of the reporting and the financial modeling so that it's repeatable, easy to update

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and easy to explain. And it has at least the way we do it, very extensive detail about the key

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numbers and see what's going to happen to the business. And the whole concept is that we build

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these tools in a way that they really allow you to become very presentable to any third party that

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wants to look at your company. And we say within 48 hours, notice, right? Now it takes a while

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to get there because a lot of companies have very messy systems and books and they don't have like,

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you know, a full IT team and we don't want them to hire an IT team to handle us. We self-serve. But

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once you get that information into what I call like a single source of truth and everybody knows like,

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this data is used for this. This data is used for that. It all in parallel, you're building reporting

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and forecasting tools, calculators, workflows that make all of that information available to the

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owners and to the management teams so that they can understand how to do their jobs better.

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Yeah, you know, I have a buddy who has a business and I was talking to him one day and

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he said, how are you doing? He's like, oh, finally done. I'm done with my reporting. I'm like,

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what are you talking about? He said, every month I have like three days of work when

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reporting. It's like, you know, I forget, it's the last three days of the month or the first three

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days of the month. He's working on reporting and I was like, why are you generating the same report

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again and again and again? You know, why? And this was a philosophical decision. I made

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six, seven years ago of anything that I have to report twice two or more times,

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we're just going to automate that and have it be real time. Yeah. And I'm just curious,

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is that where you guys are going? Do you have automated reports or do you still have, you know,

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folks that they're generating the reports? No, we have automated reports, but there's also like,

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more often than not, there's a templated reporting system that we put in place and you,

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sometimes the information can be fed in automatically. Most of the times there's like a source file,

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you dump it into a folder, you hit refresh and it gives you like all the updated information in the

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and as long as people are not messing with the source data and the formatting, it all flows

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very quickly. Yeah. You know, the idea is that, you know, at the end of the month, you know, to update

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your forecast, update your financial reports, put together some PowerPoint slides, it really shouldn't

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take you more than like one or two hours. And then you can sit down and spend another hour to two

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hours just analyzing like, what does it say? Yeah. Yeah. And that's kind of in line with, you know,

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I just, I was grieved. I felt horrible for my buddy. It was like, really, you spend three,

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three days a month doing reporting. It seemed like it should be more that one to two hour thing.

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Yeah. I think, I think sometimes what happens, and this is also where we help companies is they,

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you know, if you're, if you're on the team and you have a certain way of doing it,

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you can't change the tires on the bus while it's driving down the highway. So you, you, you lack

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the time and the prioritization of tasks in order to like upgrade how you're already doing it. You

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know, no one's ever telling you, oh, like hit pause for this month and let's upgrade everything.

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You know, it's a lot of times they're not thinking in those terms. And that's also where we're

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helpful for companies, where they can keep doing what they're doing. And instead of coming in,

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you know, they don't hire us on a permanent basis. They hire us on an interim project basis.

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And in like 60, 90 days, we can fix a lot of stuff and then hand them the keys. We do that,

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that type of work as well. Yeah. Usually with bigger companies, that's how it goes.

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And, you know, a lot of, you know, a lot of CEOs, they're, they're not in the details. I'm sure there's

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like, you see a range of that, but there's, you know, running into a lot of, you know, especially

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the more visionary, it's, you know, they don't want to get drug into the details. What would you

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say are like the basic numbers any business owner should be tracking that they should be able to

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say, you know, deliver on a moment's notice, hey, here's my numbers and here's what they are.

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Yeah, I would say, definitely like your minimum cash number that you're going to have in the bank

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over the next 12 months, your top line revenue and EBITDA for the next 12 months and for like

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the last couple of quarters, you should, these are all financial metrics, but I'll get into more

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operating ones. You should really understand your customer acquisition costs and what it costs for

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you to market, acquire, activate a client. You should all, a single client, you should also know

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a single client, what is their lifetime value in terms of revenue and direct contribution margin?

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You should know that. These are like the basic building blocks of your business. Now, if you run,

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if you run a construction company, let's say you're building luxury homes, that might seem

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like an odd question. Like, you know, I'm selling, I'm like an elephant hunter and I get these big

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projects. So sort of those people, I would say, yeah, you can think about it a little bit differently,

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right, which is like, what's the, you know, the average profit per $1,000 of home value that you

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construct? And then, you know, what is it, what is the timeframe, the average amount of time that you

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spend and the amount of money you spend marketing to bring a luxury home buyer into your

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business and put them, you know, get a budget out of them and then go build a home. So you can

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think about it in different ways. It's not like, you know, you know, if you run a SaaS business,

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it's really easy, right? It's very widget driven on that recurring revenue. But that applies to a

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lot of different businesses, you know, and you can, you just have to think about it slightly differently

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and you can kind of get to the same place. That to me is like super important. I think another

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thing that's really useful for an owner operator to think about is,

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you know, the average tenure of their employees and the turnover rate of their employees,

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you know, I think that's a key indicator of stability and culture in your company.

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And, you know, matters matters in terms of your growth trajectory because the harder it is to

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keep people in their seats, the harder it is going to be for you to actually grow your business,

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especially if the customer acquisition funnel is pretty good.

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Yeah. Yeah. Well, and there's two numbers that you just mentioned and for purely selfish reasons,

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I want to dig in on these and it's the customer acquisition cost and the lifetime value.

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And so, you know, I do marketing and one of the questions when I get a new lead,

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one of the questions I ask them is what's customer lifetime value, you know, of your average customer?

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It's shocking how many people don't know the answer. And I'm not judging, but I'm just, it's

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very, very few people I talk to actually know that number. And then I follow that up with,

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hey, if lifetime value of a new client is 100,000 or whatever it is, how much would you be willing

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to spend to acquire that client? So let's dig into those a little bit deeper because I just,

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from my perspective, I see a lot of people that don't know that they haven't prioritized it.

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Why should they prioritize that?

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Well, it's the fundamental building blocks of growing your business, right? So you really need

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to think about the investment risk that you're taking in the marketing and sales. And then

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what's the payback basically going to be on that? And I sometimes say it's kind of like an

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upside down wedding cake is the way to think about it. You have, you know, you've got your first

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layer of economics coming into the business is that customer acquisition cost. And then from

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your customer acquisition cost, you know, you've got your revenue layer, then you've got your

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another cost layer. And you need to have that top part of the wedding cake, leave you with an

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enough money after the customer cycles through the contribution margin level, so that when you

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pay all your other costs, you have profit left over that is a good return on investment, right?

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So you're kind of like taking these dollars that you're spending up here and they're trickling through

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in by coming in with more revenue associated with them. But when you get to the bottom of the

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and you need to make sure the top is big enough that something ends up at the bottom.

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Yeah. And how does that work? So let's let's say that. So real quick, just because again,

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I've run so many people that don't know this number. How do you define, you know,

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I think there's two metrics. There's customer, there's lifetime value and there's customer

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lifetime value. How would you define those two terms? We customer lifetime value, what was

[00:22:15 - 00:22:20]
the other one? Just lifetime value. And I merge them into one. I use them as a

[00:22:20 - 00:22:26]
Oh, I, to me, those are the same thing. I always do it based on one unit of a customer. Yeah.

[00:22:26 - 00:22:32]
And I say, this is what the average customer looks like. This is their buying pattern. And this is

[00:22:32 - 00:22:40]
their, you know, attrition rate. And you do the math on when they spend money with you and how

[00:22:40 - 00:22:47]
much of it you get to have for a contribution margin. And then you can, you know, you can discount

[00:22:47 - 00:22:53]
that back or you could just sum it up and say, all right, I get $6,000 from my average client and

[00:22:53 - 00:23:01]
it cost me, you know, $900 to acquire them. So I'm getting almost a six X return, you know,

[00:23:02 - 00:23:09]
on, on that. And if you're, if you're investing to, you know, triple your money in a business,

[00:23:10 - 00:23:17]
having six X or more to play with at the top of the funnel of that wedding cake, that upside down

[00:23:17 - 00:23:23]
wedding cake is where you need to be, right? Because if it's two X, you're now, you can't get to three

[00:23:23 - 00:23:33]
X at the bottom. You got to be hopefully many multiples higher than that. So that as you as the

[00:23:33 - 00:23:40]
cash flows through the system, you're leftover with, you know, a nice return on your on your

[00:23:40 - 00:23:46]
investment. But I knew those things, as I said, interchangeably, and I do it on a customer basis.

[00:23:47 - 00:23:58]
And again, you can modify that concept to almost any business, you know, like with,

[00:23:58 - 00:24:07]
with say, with an e-commerce business, you could think about repeat purchases as the lifetime value.

[00:24:07 - 00:24:14]
And you're thinking about, okay, I market once I bring them in, they buy my ROI might be pretty low

[00:24:14 - 00:24:18]
there. But then when I remark it to them, then they come back and buy again, I gradually am

[00:24:18 - 00:24:25]
building the value of this customer over time. And so when I look at it in a time series from day

[00:24:25 - 00:24:32]
one, where I spent $500 to get the customer, and then I see every bite at the apple that they take

[00:24:32 - 00:24:38]
and how much is that worth? And that tells me how much how much I'm getting from that client for

[00:24:38 - 00:24:44]
the $500 I spent. And actually, in an e-commerce model, you'll be doing remarketing,

[00:24:45 - 00:24:50]
usually in the form of like discounting and stuff like that. But you might do some retargeting

[00:24:50 - 00:24:56]
digitally that'll have a cost associated with it. So you'll have like some additional cost of

[00:24:56 - 00:25:01]
acquisition along the way. Don't let that confuse you. You know, you just got to like

[00:25:01 - 00:25:07]
factor it into the overall summation of the in and out of the of the money you're getting from

[00:25:07 - 00:25:12]
the client. Yeah. And so for those that don't know, when you're talking about retargeting,

[00:25:12 - 00:25:17]
you're basically sending ads to people that have already touched your business in one form or another.

[00:25:17 - 00:25:23]
Yeah. Yeah. Or you're sending them like emails to reengage them, which emails are,

[00:25:23 - 00:25:27]
you know, pretty costless other than the platform that you're using. So if you have a like a large

[00:25:27 - 00:25:35]
customer base and you're spending $200 a month on Cladio or instantly or something like that,

[00:25:37 - 00:25:41]
it's pretty de minimis. So you, I almost just say that's like a rounding error.

[00:25:42 - 00:25:47]
All right. All right. Lat words with de minimis. What's that? What's that mean for the average?

[00:25:47 - 00:25:51]
Oh, close to zero. It hasn't has little value.

[00:25:52 - 00:26:05]
I was in a room full of lawyers and they said de minimis. I'm like, what's that mean? They

[00:26:05 - 00:26:10]
and you know, it's interesting. When we ask clients, how much, you know, I said what,

[00:26:10 - 00:26:14]
how much of the lifetime value would you be willing to spend to acquire or do you,

[00:26:15 - 00:26:18]
you know, want to spend to acquire a customer? They come back and they ask me, they're like,

[00:26:18 - 00:26:23]
well, what should it be? And my answer, and I want you, if you disagree with my answer,

[00:26:23 - 00:26:28]
please challenge me. But my answer is always, you know, that's a decision you have to make.

[00:26:28 - 00:26:34]
And I describe it as a gas pedal. You know, the more, the more you spend when customer

[00:26:34 - 00:26:40]
acquisition, the faster you grow. And the less you spend the slower you grow. And, you know, a lot

[00:26:40 - 00:26:48]
of these SaaS companies, their plan is just grow, grow, grow. You know, profit's not even in the

[00:26:48 - 00:26:57]
equation. I mean, for example, HubSpot has never had a profitable quarter in their 20-year existence.

[00:26:58 - 00:27:07]
And so there are business models where they're going to spend more than the cost of, you know,

[00:27:08 - 00:27:14]
they're going to spend more than lifetime value for that specific objective, but that

[00:27:14 - 00:27:23]
doesn't fit most businesses. So how would you advise people? I mean, am I directing people the

[00:27:23 - 00:27:27]
right way, or would you have? Well, I think I would say a couple things,

[00:27:27 - 00:27:34]
kind of working backwards from what you last finished with. I think, you know, HubSpot,

[00:27:34 - 00:27:42]
you know, never being profitable in any quarter in its 20-year existence, requires a lot of capital.

[00:27:43 - 00:27:46]
Yeah. Right. You need somebody who's got to be funding those losses.

[00:27:47 - 00:27:54]
Yeah. So, you know, just to the general audience, you know, unless you've got a venture capital

[00:27:54 - 00:28:04]
fund that's stroking you a $50 million check, that's not a sustainable business model. But I think

[00:28:04 - 00:28:16]
more to the gas pedal, I'm, and this happens with, you know, different clients. It comes up and it's

[00:28:16 - 00:28:22]
it's always, there's definitely awareness amongst the management teams that we work with on this

[00:28:22 - 00:28:31]
issue, but we really try to hone in on it for them is, you know, the problem with just pressing

[00:28:31 - 00:28:40]
the gas pedal is every channel that you're marketing through has inefficiencies that become

[00:28:41 - 00:28:47]
more difficult to manage the deeper you're penetrating the channel.

[00:28:48 - 00:28:55]
And that shows up in a variety of ways. It shows up in, you know, lower response rate,

[00:28:55 - 00:29:06]
lower conversion rate, earlier cancellation of the contracts, bad debt like people signing up and

[00:29:06 - 00:29:13]
not paying. So you need to be, and by the way, that varies by channel. So you could say like,

[00:29:13 - 00:29:20]
oh, I'm going to do this on meta. And I'm going to do this at, you know, B2B conferences. And

[00:29:20 - 00:29:28]
I'm going to do this, you know, on Google. And each one of them is going to have their own saturation

[00:29:30 - 00:29:39]
pain points. And they're not things that you can't overcome. They just require a lot of diligence

[00:29:39 - 00:29:45]
and continued planning to say, Oh, it looks like we kind of hit a ceiling on these Instagram ads.

[00:29:46 - 00:29:53]
Why are these not working now? Assuming they didn't change the algo on you, right, which happens to

[00:29:53 - 00:30:01]
but you let's say you went from like spending $15,000 a month to $50,000 a month on, on IG.

[00:30:03 - 00:30:08]
And once you got to the $30,000 mark, you're noticing like, Oh, this is just like,

[00:30:09 - 00:30:14]
we don't want these people or we've spent it. And now six months later, you're like,

[00:30:14 - 00:30:18]
why do we have so many cancellations? And you got to think back to like, where did I get those

[00:30:18 - 00:30:23]
people to begin with? And a lot of times, if you go pedal to the metal and you introduce,

[00:30:23 - 00:30:30]
you introduce a lot of variability that you do not necessarily understand at the time that it's

[00:30:30 - 00:30:35]
happening. But it's your job to really try to get your arms around it, so that the next month,

[00:30:35 - 00:30:39]
when you spend the next 50, you're much smarter than you were 30 days ago.

[00:30:41 - 00:30:48]
Yeah. Yeah. And a very real thing of any platform is, you know, let's say you spend 15,000

[00:30:48 - 00:30:55]
dollars and let's say you get, you know, just funny numbers, let's say you get, you know,

[00:30:55 - 00:31:03]
10,000 leads, $15,000 gives you 10,000 leads. Doubling that will not give you 20, doubling the

[00:31:03 - 00:31:09]
spend, I give you 20,000 leads. And that's just the nature of any ad platform. But it's kind of

[00:31:09 - 00:31:17]
going back to the, you know, do you have any recommendations on what people should spend

[00:31:17 - 00:31:23]
in terms of, let's say, as a percentage of top line revenue, what target should they,

[00:31:25 - 00:31:31]
oh, no, excuse me, in terms of lifetime value, what targets should they?

[00:31:31 - 00:31:35]
I think, I think at the top of the funnel, you really should be targeting like

[00:31:36 - 00:31:44]
5X return on your, on your marketing spend. That's just like a rough number, you know.

[00:31:45 - 00:31:52]
And then do yourself a favor and look at that return at the contribution margin level.

[00:31:53 - 00:31:58]
So like, just as you deliver the direct service or whatever it is that you're selling to the

[00:31:58 - 00:32:05]
client, take your marketing dollars and divide it, divide it by the contribution margin that

[00:32:05 - 00:32:09]
you're getting out of it, forget about your overhead and all that stuff, keep it relatively

[00:32:09 - 00:32:17]
simple. And is your 5X going to 1X? That's a problem. You know, is your 5X going to 4X? That's

[00:32:17 - 00:32:25]
great. You want to just be sensitive to that, because that's the very next layer of cash that's

[00:32:25 - 00:32:30]
going to get scooped out of that client. And you want to make sure there's enough there to then like

[00:32:31 - 00:32:37]
cover overhead, staffing, and then be able to have something left over to reinvest into the

[00:32:37 - 00:32:44]
marketing again. But, you know, 5X, you know, some businesses it might have to be 10X, you know.

[00:32:44 - 00:32:50]
In fact, that little contribution margin step will tell you a lot about how much higher 5X

[00:32:50 - 00:33:02]
needs to be or lower. Yeah. Yeah. Well, I tell you what, it's, I'm impressed by your

[00:33:02 - 00:33:09]
your detailed understanding of you don't treat marketing like a black box. You have a deeper

[00:33:09 - 00:33:15]
understanding of marketing. Oh, yeah. And then most most numbers. Yeah. Well, yeah. Yeah. Thank

[00:33:15 - 00:33:23]
you for saying that. I mean, I think I personally have a lot of marketing experience, but the

[00:33:23 - 00:33:31]
the key thing is that when we build our analytical tools and our financial models,

[00:33:32 - 00:33:37]
we're very, very granular about the acquisition funnel. Yeah. And

[00:33:40 - 00:33:46]
we don't want any mysteries there. You know, we don't want it to be like, oh, well, you know, your

[00:33:47 - 00:33:56]
average acquisition cost was $165 this month. And it should have been $95 because that's what

[00:33:56 - 00:34:03]
you budgeted. Yeah, that tells you that you missed, but why was 95 the number and why did

[00:34:03 - 00:34:09]
it come out of the 165? What happened in the funnel all the way back to when you put your,

[00:34:09 - 00:34:17]
your marketing orders in or your ad budget purchases in or you know, maybe you just do direct sales

[00:34:18 - 00:34:25]
and the salespeople are making phone calls and you know, they're just calling cheap lists or whatever.

[00:34:25 - 00:34:33]
But what's not working in that chain of events that gets you to a conversion that

[00:34:35 - 00:34:41]
you know, needs to be built into the financial forecast so that you can go back and say,

[00:34:41 - 00:34:50]
oh, well, we thought response rate was going to be 10% and it's only 2%. You know, that's where

[00:34:50 - 00:34:56]
it fell down. But for the 2% that came in, maybe we're converting them at, you know,

[00:34:56 - 00:35:03]
twice as high as we thought we would, you know, that tells you a lot. It tells you like, okay,

[00:35:04 - 00:35:10]
the universe doesn't react to the advertising. Maybe you need to change that. But whoever is

[00:35:10 - 00:35:16]
reacting to this specific advertising really wants to buy at a higher rate than you thought.

[00:35:16 - 00:35:21]
Right. You know, those little pieces of the puzzle matter.

[00:35:23 - 00:35:29]
You know, I love this. We could talk for hours. And again, I love your depth of understanding of

[00:35:29 - 00:35:35]
what's going on in marketing and making sure that the numbers make sense. We're just ahead of time.

[00:35:36 - 00:35:42]
And so, so I think people would absolutely benefit from what you do. How can they reach you?

[00:35:43 - 00:35:52]
So you can find us at CFOProAnalytics.com. That's our website. There's actually a free CFO

[00:35:52 - 00:35:59]
assessment that you can take on the website that gives you a sense of like where you are in terms

[00:35:59 - 00:36:10]
of meeting CFO help. There's also a lot of great calculators and a lot of blog information and

[00:36:10 - 00:36:16]
a CFO wiki on different types of business models. So you can check all that stuff out,

[00:36:16 - 00:36:21]
learn about our team. And then also, I'm very active on LinkedIn. So you could find me on LinkedIn.

[00:36:21 - 00:36:30]
Just, you know, look for Sal Tirovasi and or just look up Sal fractional CFO. I might be the

[00:36:30 - 00:36:36]
only guy that shows up on Google. I don't know. But if you can't remember my last name, but yeah,

[00:36:36 - 00:36:46]
you could find me in both of those places. And we love talking to people, listening to their

[00:36:46 - 00:36:54]
business issues. We don't come in with a hard sell with the people that we interact with who

[00:36:54 - 00:36:59]
want to talk to us. Our job really is to try to understand and have them walk away with

[00:36:59 - 00:37:01]
some good advice whether they work with us or not.

[00:37:03 - 00:37:05]
Well, excellent. Well, thanks for coming on leaders and legacies.

[00:37:06 - 00:37:07]
Thank you for having me. It was great.