🔥 This Week’s Agency Insight

From Jordan Ross @ 8 Figure Agency

February, 3rd 2024

Weekly Insight

86% of the business owners that come to me and say they need more leads don't

The lack of proper entrepreneurial education has the marketplace cash-poor

You’re struggling because you focus on the wrong thing

How to run the RIGHT strategy to grow your business

In business, strategy is everything

Strategy is where we put our time, attention, and money

What we put our focus on grows and increases

But not all things are equal

If we put our focus on the right things, our business will disproportionately grow

When I meet any business, I can identify what they need to focus on within minutes

What crazy, many of the people I talk to spend YEARS focusing on the wrong thing

The Success Formula

Business truly is a math equation, and if you know the formula for success, you’re golden

The variables are simple

• Leads

• Sales & price point

• Capacity 

• Churn

That's it

When I meet a founder that tells me, “I need more leads”, I ask a series of questions

• What is your current monthly recurring revenue

• How many appointments do you book/mo

• What % of leads are qualified

• How many deals do you close/mo

• What is the average price point of your clients

• How many clients do you currently have

• What is your average monthly churn rate

Sometimes, I also ask what the no-show rate is on sales too

What I am trying to identify by asking all these questions is if the business is truly capped due to leads

Oftentimes, the business can grow with an improvement in:

• Closing rate

• Price point

• Churn rate

The way I’m able to assess if the business can grow using one of these other variables is an Algebra equation.

Here’s a few examples of how this works

(REAL) Agency Example 1

A prospect of 8F was booking 30 calls/mo

They were closing 16% of qualified leads

Averaging just shy of 5 deals/mo

The sales professional on the team was a co-founder

Simply put, this closing rate for a founder was dog shit

Let me repeat

This closing rate for a founder was dog shit

I informed the prospect that 16% is less than the average closing rate for a closer that you can pick up off the street

A founder should be shooting for, a minimum, of 25% closing rate

If this company improved its closing rate from 16% to 25% it would move up from 5 to 7.5 deals closed per month

(REAL) Agency Example 2

This story continues, but we are going to make this full circle with the same prospect

The prospect informed me their company has a 20% MONTHLY churn rate

This is horrible

Way worse than the closing rate scenario

This means they lose all their clients more than twice in a single year

But for some reason, probably due to improper education or perspective, they thought they needed more leads

Math to Decide Strategy

When I saw these numbers, it was clear as day where they needed to focus

For many of you, it may not be

The way to avoid improper decision-making is to use the MRR Cap calculator to identify where to focus your attention

The equation for this formula is simple:

[(Average New clients/mo) * (Average price point)] / Mo Churn Rate= MRR Cap

In this client’s example:

(4.8* 4000)/20%= $96,000 MRR

This means this company will not grow beyond (about) 96K MRR

This is exactly where they have been stuck for 3 months when I met them

In order to identify a new focus, they just have to identify which of these three numbers will be the easiest to adjust

I told them, the head of sales should work on his closing rate and the other two co-founders needed to improve the churn, down to at least 12%

Here is how that would impact the company

(7.5 *4000)/12%=$250,000 MRR

BANG

This more than doubled the business and turns it into a 3M/year company

Many lessons here

But, this seems easier on paper, it is harder in person

This is due to Solomon’s paradox

This principle states its harder for an individual to see and solve their problems rather than someone else

That’s why I'm here

Harness the power of processes, and systems to build a profit generating team that function with or without you. Click here to schedule a meeting

The 8F team will be ready to give you a free consultation.

Killer Content (My favorite pieces of content from last week):

• Podcast: Ultimate: The Most Important Formula To 10x in 2024

• Long Form Youtube: How Miquel Girones 4xd His Business In 2 Months ($100k+ In Monthly Net Profit)

• Short Form Youtube: $20K to $100KA Month Profit in Two Months

Stay Happy

Stay Hungry,

Jordan Ross

CEO & Founder @ 8 Figure Agency

Let's Stay in Touch!