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The Planning Gap: Why Most $1–20M Companies Stall Out with Yarin Gaon of Fractional Partners 1-26-26
00:38:19
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- [00:00]
A
So I was trying to build this website, right, And I kept getting stuck. Either the tool was super fast but didn't let me change anything or it was powerful but so confusing. Then I found WIX Harmony. It's wild. You can let AI do stuff for you or grab the controls yourself. You can also tell Aria, your AI agent, what you're thinking and everything just comes together. Try it out for free@wix.com Harmony that's wix.com Harmony this is Scott Becker with.
- [00:32]
B
The Becker Private Equity and Becker Business podcast. We bring you once to twice a day market and business insight episodes plus typically an interview with a brilliant leader, a brilliant founder. Today we're thrilled to be joined by Yaren. Garen's an investor, serial entrepreneur. He's the founder of Fractional Partners, he's a member at PFF Community, and finally he's a business mentor and at the University of Chicago at the Polsky Center. Yaren, can you take a moment to introduce yourself and tell us a little about your business background and then we'll talk about where you focus today.
- [01:08]
C
100%. So thank you for having me. So I'm Yaren. I'm a serial entrepreneur, originally from Israel, started several companies. I'm currently in my fourth one. The last one became the largest e commerce platform for military goods back home in Israel, which I sold, moved to the us, finished my MBA as an external at Kellogg, joined a venture capital firm in Chicago where you are at. So I spent three years being an entrepreneur in residence in a venture capital firm. So basically what I did is I manage a portfolio of distressed assets. Fancy way to say that. I work with startups that the fund invested in and ran out of money usually. So my job was to turn them around. I was also volunteering at Score and at University of Chicago, which I still am, mentored for about 400 different found and I quit about three years ago to start Fractional Partners, which is my passion. I'll tell you all about in a moment.
- [02:07]
B
Thank you. I know we're going to talk a lot today about why Companies stall, particularly one to $20 million companies and strategy before execution in the traits of stalled companies. What you see when you see stalled companies. Take a second. Yarin, talk about why do some companies that you've seen, that you've worked with, why do some stall instead of scaling to the next level? And what really drives that? What really drives success versus stalling when you're working with growth companies?
- [02:39]
C
Yeah. So the short answer is missing clarity and I'll explain What I mean by that. So when I worked, I worked with hundreds of companies and every time someone came to me, a founder came to me for advice, always it was a tactical question, right, should we do A, should we do B or should we go left or should we go right? And the challenge is that a lot of times these challenges are actually downstream challenges that stem from missing clarity. And I explain what I mean by that. Founders come especially the 1 to 20 million dollar stage. We call, I like to call it the adolescence stage. It's almost like a, like a human, right? A company has different stages. So in the 0 to 1, it's all about hustle. They grow by addition, they're trying a bunch of new stuff, they try to see what works. There is this beast that exists today, we call it adolescent. It's like 1 to 20 or 2 to 20. It's that stage where a company has product market fit, it has paying clients, it has the beginning of traction. But that's where they stall. They stall because they're still trying to run on hustle instead of actually getting clarity. And the clarity is just answering basic questions about what exactly you're building here, what business model are you pursuing, where is the cash really coming from? Who's your perfect customer, what revenue stream are you developing? Basic question that, because a lot of companies miss that step of actually answering, they face with a lot of tactical problems down the road. Does that make sense?
- [04:20]
B
A hundred percent? Yes, 100%. And you describe it well, I mean the first stage of entrepreneurship is really hustling, trying to find product market fit, trying to see what works. Then there's a lot of testing, some different areas, maybe really close adjacencies and trying to grow. And then the companies that stall get stuck in that hustle mode. A bunch of about a bunch of different areas versus truly starting to double down on what's working and what's going great and where they should really be putting a lot of their energy. When you first meet with the stalled foundry on talk a little bit about the first sign that a company is stock, not just temporarily struggling, that it's sort of running in place and it's going to have a hard time getting to that next Stage if you're 2 million, getting to 5 million to 10 million to 20 million. But you and I know that any company that actually gets to 20 million notwithstanding all the financial press, has done an incredible job. At the end of the day, there's very few that actually get to that spot. Even though compared to the unicorns the billion dollar companies and so forth. It might seem small, it still is a tremendous feat. But how do you tell a company's stock versus just having a temporary challenge?
- [05:29]
C
A lot of times a they're not able to articulate their business strategy in simple English. That is the number one red flag when I ask, okay, so who is the customer segment that you're actually pursu? Well, we pursue multiple different segments or what exactly? What revenue stream is actually producing the most profit, not revenue to this business? Well, we have multiple different products and multiple different channels. So when they're not able to articulate what they're doubling down on, that's usually a key indicator that there's a question that they never either asked or answered. Upstream. Does that make sense?
- [06:10]
B
100%. 100%. I love what you're talking about. Say that great founders, great leaders, first and foremost, they don't necessarily know the whole ecosystem, but they know their business very, very well. Where profits are coming from, where revenues are coming from, who are their best people and more. So what you're saying certainly resonates with me tremendously, is fantastic. You often talk about strategy and getting clarity around strategy before execution. Many founders by nature are sort of hustlers. They want to jump right into things versus spending some time on that clarity and strategy. Talk a bit about that and why that creates challenges.
- [06:54]
C
Yes, because they try to grow by addition, not by subtraction. I'll explain what I mean by that. Again, zero to one, it's all about experimenting. You're adding more stuff, you're doing more activities, you're trying to see what, what resonates in the marketplace. But there's a mental shift that needs to happen where a 1 to 20 million dollar company is a resource constrained company. They don't have the ability to pursue multiple different activities at the same time. So they need to be able to take all their eggs and kind of focus and start doing less. But focusing their energy and effort in the stuff that actually moves the needle. That process of focus is extremely hard. It's also extremely hard because no one teaches you how to do this. And there's a mental shift that needs to happen from okay, I built a company worth $3 million. I built it by saying yes and by hustle and by selling. And now I need to go through a maturity process where I as a company and I as the founder and as a leader needs to start saying no. It's the ability to start saying no to activities. And I found that a lot of times the ability to start saying no comes from committing to decisions or answering questions that they never asked. So they never sat in a room and said, okay, this is my leadership team. What exactly is our revenue roadmap? So you mentioned a lot of companies know their business intimately. I beg to differ. I think that a lot of companies know where revenue comes from, not a lot of companies know where actually like EBITDA comes from. So then you need to. My whole thing is like, you need to start with financial clarity. Let's get clarity. And we're actually EBITDA flows or profit flows or cash flow flows. See what parts of the business is actually producing net profit, not revenue. Because you're getting, you get, you fall in love with revenue, but revenue doesn't pay the bills. Figure this out. And then that would dictate what, what kind of business model you want to pursue. Right. It's the. Ms. It's, it's a, it's a process. It's not a complex process, but it's a process that needs to happen for you to be able to build an EBITDA positive company or really to increase net profit and multiple. And not just get more revenue. Revenue is not the difficult part.
- [09:11]
B
100%. No, no, we love that. And when you think about this, and some of this ties to the next question, which you just said, what defines in your experience a clear strategy at this stage of the business is 2 to $20 million range. And then what should founders be able to articulate in one to two sentences? What should they be able to clearly articulate?
- [09:33]
C
Yeah, so I found that today there isn't a good way to articulate strategy in simple terms. People write business plans, they have like these decks, they have all these knowledge spaces that people that. It's not practical. So to solve this, what I did is I built one page source of truth, and it's publicly open, and I'm not selling it. It's available and it's there. And there's really three different kinds of sources of truth. Financial source of truth, strategic source of truth, and operational source of truth. And it's the same canvas with just different questions on top of it. So to answer your question about the strategy, it's a multitude of questions, but they're very simple. Question number one, what are you optimizing for? What's the success metric? Yeah, it can be revenue, but revenue is not really a good success metric. What are you trying to build here? And then who's your perfect customer to get you to that next stage? Not all the different segments who's the segment that you're doubling down on? And then what do they truly want from you? What, what the pain point that you're solving for them? Question number two, revenue stream. What produces cash today? What produces cash today that if you give it more energy, would produce more cash in the future. So something you already have and just needs a little bit more attention. And then long term revenue stream, what are you developing in the future that you're building upon? And the last question, there's a multiple question, but the other important question is like strategic advantages, which is what most founders understand conceptually but never answer. So everything becomes super complex. What do you do best? Not your differentiation, which is how clients perceive you in the marketplace, but truly like you've built something here. What assets do you build? You have special relationships, you have ip, do you have special connections? Do you have a pro? What do you have here inside of this company that you can double down on in the future? And once you answer these questions, they're not easy, but they're simple. All the tactical decisions become self evident. Right. It's clear to me that I should do this thing because it aligns with what we're trying to build. But being explicit is the missing piece for a lot of founders today. And that's why they try to grow by addition and see what works. And in that process, they burn a ton of capital and time. That's the missing piece in this concept.
- [12:10]
B
Of how we focus being all over the place. How often do you see that with founders where they're sort of all over the place versus highly focused and not able to clearly articulate or able to clearly articulate what they're really trying to accomplish. How often do you see one versus the other?
- [12:28]
C
Nine times out of ten you have very talented founders and they're not able to articulate where they're going. And it's not because they can't, it's because they're missing a tool. That's what I believe. So I want to extrapolate from this to my investment thesis. I think everything connects. So I found that at the 1 to $20 million range, you have a really interesting assets. You have businesses that a lot of them produce cash flow, a lot of them have product market fit. But they're too small for sophisticated players to invest in them. Private equity won't touch them. Under $2 million EBITDA, they're just too small. They need a little bit more hand holding to grow, but you don't need to operate the business for them. I Don't want to be a C suite executive inside of my portfolio. What I found is the biggest leverage for me as an investor is to come in and just help them focus. Because once they focus, they don't burden my capital and they don't burn their own capital on their own time. So it's the highest point of leverage. And if you can get Those companies from 2 to 20 to 2 million dollar EBITDA, 3 million dollar EBITDA, you've basically created a massive amount of value. You took assets that were not investable for a sophisticated investor and you basically de riskify them, mature them and got them to a point where private equities are interesting in deploying capital to them. It's almost getting them capital already.
- [13:55]
B
Yeah. And getting. Yeah, no, no, very much so. Getting it more and more clarity about here's what we're doing, here's what we're making money, here's what we're growing, here's what the operations look like, here's what the strategy looks like, here's what the finances look like, here's our clarity. And so many people do so much hustling too much, so much running around without really that great deal of clarity. So they're spending a ton of time. And you're right, they're not really investable because people can't see a way to scale what they're doing with clarity. When you talk about the founder's evolution, how much of this is due to the founder's ability to evolve from founder of a million dollar company to a $5 million company, to a 30 million dollar company? What is, what does that look like? And when do companies outgrow their founders ability to run that company? And then I'm gonna ask you a follow up question on that and how hard is that for founders to move into that next role?
- [14:47]
C
It's a good question. So it's a mixture, right? There's some personal growth and there's some skill set that needs to be acquired. So my thesis or my belief is that a founder that brought the company to $3 million can bring a company to $20 million. Can they bring it to 50 and 100 TBD? But I don't need them to. I need them to get to a stage where the company is big enough when they can decide if they want to hire an external CEO and the company can afford to do so. The challenge with these companies at 2, 3, $4 million, they can't afford an external CEO even if they wanted to. So there is no world in which you just install a CEO that is not you, that is going to have the right skill set to bring this company forward, not at that scale. So I can change the founder. What I can do is I can provide them with the skill set and the knowledge of how to make better decisions. So assume that founders want to say no. Founders that I work with in my portfolio and in others, they want to say no. They want to be able to have a mental image of am I going left or am I going right? And that dissonance is, is, is hurting them. Not because. And they can't answer those. Not because they don't have this. The ability is because they don't have the tool and the skill set to do so. So if you can bring them the tool, which is my Clarity playbook, which is basically my publicly open playbook, it's a planning system like Eos, but on a planning, not execution. And you use them, walk through the steps. It augments the missing skill set. So instead of teaching them how to do Proforma and I just have a simplified version of a spreadsheet that tells us, okay, this is the revenue stream where the most profit comes from. This is the revenue stream that the highest margin, this one is producing this it just simplifying the process. And then they can run. They don't need me as an outsider to tell them what to do. That's not my role. It's just help them kind of focus of what they have built and then they go and they cook with gas. Did I answer your question?
- [16:58]
B
Yeah, 100%. And how much of your time is spent investing in companies versus consulting with companies? Fractional. What do you folks do? How do you focus your time?
- [17:11]
C
So I believe rewind. When I quit my job in the venture capital firm, I wanted to deploy capital to my own portfolio. But I very quickly realized that if I give them a check, I'm never going to see my money again. So I've developed a different model. It's paid due diligence. And this is what it looks like. I start with portfolio companies as a paid engagement. I walk them through deployment of the Clarity playbook in their own company. And what it allows us to do together is doing a financial Due diligence. We don't call it that way. We call it financial clarity. We do their strategies together and we set the first quarterly priority or plan together. And what it allows us to do is to test each other and see, provide value and also see do we execute well together. Do you take advice? How do you go about this. And once we've been through that process, two things can happen. Either they become a portfolio company and then we find a way to either deploy capital or do revenue share a profit share a different, some sort of like alignment of incentive, or they take the system and they run it themselves. But it allows us to engage before deployment of capital. Because I believe that capital is not really what they need right now. Too early for capital. That makes sense.
- [18:30]
B
Absolutely. What they really need is more clarity about what they need to do and focus and stack and resources around what really matters versus necessarily money. Sometimes people get money early, spend in all kinds of ways without great clarity of where it's going, and then they just have big loss run rates and so forth. And totally familiar with, done a lot of venture capital investing and have had my share of wins and zeros as well. So totally understand what you're saying. The more you have clarity, the better off you are. Talk a bit about when you have founders. Often they will look at sort of false sort of priorities. They're chasing things all over the place that don't really move the business forward. What is some of the common distractions that you see with with founders? Is it hiring too many people? Is it chasing the wrong things? Where do you see founders go wrong?
- [19:23]
C
I see them focus on execution and I explain what I mean by that. A lot of founders, when they get to that scale, 2, 3, 4, 5, they basically start by saying, okay, this is becoming a little chaotic. I need to kind of get control. So what they do is they install an executional system like EOS or entrepreneurial operating system, or put a dashboard in place or a KPI system. And these are great systems, especially specifically EOS is great in making sure that everybody is roaring in the same direction. Right. It's a very good executional system to make sure that stuff that you have decided is important get executed. The challenge is, this is my number one pet peeve with EOS and people at that stage is how do you know that the priorities that you set are the right priorities? What are you basing this on? And a lot of times they don't have a really good answer because there isn't a really good answer. So what happens is you have people that put dashboards and metrics and quarterly priorities that are great in creating activity, but there is an underlying assumption that the activity that they chose to do is the right activity. And that is an assumption because nine times out of 10, teams didn't really align on what exactly is the business model that we're pursuing who is exactly the customer that we're pursuing, what revenue stream pursuing? And because they haven't done the preliminary work, they just set priorities in vacuum so they don't really move the needle, but they're very busy and everybody is executing, but it doesn't really move the EB that needle. Does that make sense?
- [21:04]
B
Yeah, 100%. And how do people get back to that source of truth, that clarity? About right. What you're saying is you can execute perfectly, but if you're executing perfectly on things that don't bring in real dollars or don't bring in real ebitda, that's not really a win. So how do you execute great, which is so important to anything, but around the right things? And how do you help founders get that clarity? What does that look like when you start to work with a founder to help them get that clarity?
- [21:32]
C
Yeah, so I built a playbook. Basically it's a private equity playbook that I deployed my own portfolio companies. But I made it open because I want the knowledge to be accessible for everyone. So it's free and it's open and you can it's playbook at fractional partners and just do it. And the way or its structure or the idea is very simple. There are three sources of truth for a business. Financial Clarity Canvas, Strategic Clarity Canvas, Operational Clarity Canvas. They look the same, but it's basically a one page for each that tells or answers all the important questions in a specific domain. So for the Financial Clarity canvas, it answers the questions, where is cash flowing? What's producing cash? What's taking cash? How efficient are machines? So the conversion, the cac, all these different micro opportunities that basically tells me as a founder, what's happening, how is cash handling in the business? Then there's a source of choice which is called the Strategic Clarity Canvas. You can think of almost like a business model canvas, slightly different, but it's basically a one page with a bunch of questions about who are we? What do we do better than anybody else? What customer are we focusing on? What product are we focusing on? What's our marketing strategy, sales strategy, operation strategy and loyalty strategy in very, very, very high level, one sentence each. So it's not a 20 page business document. It's one page of all the business and not just the business, but the investors too. Everybody can read immediately and understand what we're building here. And then the last piece is the Operational Clarity canvas, which is basically, okay, what are our goals and what are the initiatives for the next 90 days that's it. And the activity is creating these canvases for the first time and then updating those at a specific intervals. And that's it. Because once you have this source, the realization is if you have this source of truth and you have a team that can execute, that's all they need. They just need the right direction and simplicity. And then they go and they kick ass. Part of my language. That's the underlying assumption.
- [23:47]
B
We love the language and talk for a second yarn about how important is that simplicity in driving growth of businesses. Talk about that for a second.
- [23:58]
C
Simplicity is everything. My pet peeve is like I don't do well with ambiguity and I don't. Ambiguity is the destruction destructor of value. When you have a strong team in place and they're not crystal clear in simple English, not in MBA English, but in simple terms of what exactly we're building and how we're going to get there. You're not getting the most of your people and you're just wasting a lot of effort and capital and energy trying to figure this out. And the cost of figuring this thing out is so minuscule in my mind that why won't you just stop? So I call it adolescence is the stage of when a company decides when he wants to be when he grows up. Nobody really decides. They just a lot of time they just go with the flow and they see what works and they spend a lot of effort. Stop run this exercise. It's not brain surgery. Right. There's a sequence to it takes a quarter. When you get clear on where the cash flows, what business you're building, what are you focusing on and then go execute and you'll be five times faster and more efficient in the execution. If you just paused for a moment to align the team and the stakeholders too of what exactly you're building and.
- [25:18]
B
Talk for a second. I love this. I love everything you say. I hate the 200 page business plans. I love the 1 to 3 page business plans and I love when everybody is so super clear about here's what we're trying to do.
- [25:31]
C
Yeah.
- [25:31]
B
So love that. So you're completely speaking a language I understand and I agree with 100%. I love what you do. When you see founders make this evolutionary mindset when they get better and better, they start to really use you say cook with gas or to really pick up the speed. What is the thing that they're doing that separates those from those that get stuck?
- [25:54]
C
They start saying no. They say no. That is the key in a resource constrained environment like a two to $20 million business. Your secret sauce for growth is hyper focus and saying no. If you are able to stop saying no to quote, unquote opportunities, you are becoming more proactive, less reactive, and you just get there faster. The reason why a lot of founders don't say no is because they never spend time kind of deciding what's the trade off or choosing a lane. That's why it's super hard for them to say no. But once they have committed to a lane, that ability, that superpower of start saying no. The hyper focus is what gets them to the next stage. That's the missing piece.
- [26:44]
B
We use the phrase in business sometimes that people hate till they understand where we're coming from, which is no new ideas. And one of the things, whether you have a team of five or team of 200 or 2,000, you've got every. Everybody, every day wants to come with a new idea. And at some point you have to get great clarity about here's what we're trying to do. And ideas are good, of course, but you want to have great clarity about what you're trying to do and then do it. And what's your sense of. Founders that are all over the board constantly look at the opportunity of the day, the next opportunity, the next opportunity and so forth, and they find themselves not really driving forth because they haven't got that clarity about what they're really trying to do, thoughts on that concept.
- [27:29]
C
So it's not just they didn't get the clarity, they didn't formalize their decision. And that's important because the clarity canvas is just a tool, right? But it forces someone, the team or the founder to write in simple English into a piece of document the direction. And then so the process is you take the whole team, you walk them through a process of discussion so everybody can bring their ideas, and then you commit to an answer that goes on the canvas. Once it's on the canvas, that is it, until that canvas gets refreshed. So every canvas has. There's a time to bring those ideas. Like the strategic clarity canvas is like a once a year activity where you update it, but the mere activity of putting it in writing and committing to it forces founders to almost like gate themselves because the team will say, hey, hey, hey, hey. What are you doing? We agree that this is the direction. It's in plain English. We aligned on this. Are you opening? It's like, it's like almost like the Bible. It's. We call it the source of Truth. This is this. Are you changing the source of truth. And because a lot of times they don't have this tool or this artifact that is like, hey, this is my plan. This is the one pager plan. English. This is what I'm doing. They can get away with bringing new ideas and they confuse their team and they dilute their activities.
- [28:56]
B
And how much discipline does it take, Jaron, to do what you're saying? Because, for example, I could see where we've been on private equity sponsored boards, we've been on company boards. And periodically you'll have a board member from a private equity fund who is so good at setting that clarity. Or you have a CEO that is so good at setting that clarity. And it's not all the time. But how important is it to have someone like you to sort of help people stay on board and stay disciplined in clarity? What does that look like in terms of that engagement between you and the founder in the company?
- [29:33]
C
Yeah. So what they're really missing is a process or a system. So that's why I'm leading with a system, because that's what I found to be the most helpful. So it doesn't become an ad hoc activity, but becomes a ritual. Just like you have an eos, you have a week, week weekly leadership team meeting or level 10 meetings, same shtick, same principle. You have a system plus a cadence to it that you observe as a company. So for me, my goal is to get them to the point where I can help them create their first canvases. And once they created the first canvases, they don't really need me anymore because I've built almost like a rhythm. There's a rhythm to this, and they go and they do it themselves.
- [30:19]
B
But do most founders, particularly at a certain level, need that regular periodic update with you to sort of stay on track? Because it's very easy. Like you just said, we've got a source of truth. This is our strategy. This is what we're doing. And even so, some team leaders, some other people on the team, or maybe not, gets off track periodically. I mean, that takes a lot of discipline to stay on it, to say, no, this is what we're doing. This is where we're going. Particularly when people come to you with opportunities that are a little bit outside of what your source of truth is, but seem appealing for a moment. How important is it to have sort of. I mean, I know some people could do that by themselves. Others need regular sort of outside coaching advice and outside board member. What does that look like?
- [30:57]
C
So I found that there's two different parts of this, there's facilitation and participation. And I'll explain what I mean by that. So unlike eos, this is not just a system that you facilitate right there. So there's a canvas and there are different workshops to help you answer each question in the canvas. Right. And you can have someone like me facilitate for you or basically lead the group through a discussion to answer the question. But that's not what the value is. In my opinion. The value comes from participation. That's why my business is called fractional partner. Sometimes, most of the times they need someone that is experienced operator, not just facilitating a discussion, but giving them their input. And the beauty of the system, it doesn't have to be me. So I have investors that I work with and they have adopted this system for their own venture capital fund or for their private equity fund. And what they do is they bring themselves into some of the discussion, but instead of having a situation where it's an investor versus founder and then there's this push and pull versus where should we go? The question comes from the canvas or the workshop. And the investor and the founders are on the same side and they're just debating on what's the right answer to that question. And to talk about drift, I found that once teams and founders commit to the answer, they guard their path like the Bible, because they, they went through a process, they don't want to change it or they change it only. So they say, hey, we went through all this process, we came through an answer. I'm not changing it. Like, this is the segment that we're focusing on. This is the revit. Because they have, they have emotional ties to the decision that they made. It's not that I made a decision for them. And they went through a process with their team, sometimes with their stakeholders, like their investors, their spouses sometimes come to this too. And they come to a conclusion, that conclusion becomes a piece of paper. And then they guard it because they have ownership over it.
- [33:08]
B
Right. And it creates great clarity about what they're trying to do. So then if you really spent the time and invested the time and energy to get that clarity, then there's not a desire to shift away from it until you find at some point you really got to make a different shift or grow a different way or whatever the change is that causes that. But I love that clarity for a founder, a CEO, a leader who has found themselves in a great business, 2 to 20 million, but they can't quite figure out how they scale to the next level. What's the first step they should take or this week to start to regain momentum, what's the first thing they ought to do?
- [33:47]
C
First, you need to intimately understand your numbers. At the end of the day, this is a numbers game that numbers dictate decisions. So my suggestion, walk through the modules or the plays for the financial clarity canvas and get intimately aware with what exactly is producing profit, not revenue. And you will be surprised because what happens is for these companies, they have multiple revenue streams, multiple products, multiple type of clients, multiple different channels. And once they put it in to spreadsheet and they clean, they see that not all revenues are created equal. Some of them create a lot of revenue, but very little profit. Some of them create a lot of profit but very little revenue. And you need this aha moment that comes from kind of massaging your numbers and playing with your numbers a little bit to really understand, okay, so what kind of business do I really have here? I know that the logo says one thing, but when I look at where the profit actually flows, what kind of business is this? And usually that aha moment leads to, okay, so what business model do I want to pursue? And once you get that, you unlock the growth. But it's very hard to unlock the growth if you don't have the information or the data that tells you of what exactly is the revenue or the profit drivers for the business. Did I answer your question?
- [35:18]
B
I mean, 100%. Yeah. No 100%. So you start if you got three different canvases, financial, strategic, operational, you're going to start financially starting to understand your own business. Then you got to figure out strategically, okay, now that we understand our business and where EBITDA really comes from, profit really come from is there Runway there and should we double down on that and how do we do so? No, I absolutely love where you're coming from and how you approach it, Scott.
- [35:42]
C
It's like a private equity firm would do. If they buy your business, first thing they do is financial due diligence. Do the same for your own company. That's my whole thing, right? It 5 million dollar company is too small for private equity to run any due diligence on them. You can do it yourself, do it yourself as if you were a private equity buying your company. And start with like, okay, so where's eub? Where is the profit coming from? Do your own, be your own private equity firm.
- [36:10]
B
Love it. Take another moment before we we conclude. First, anything final you'd like to leave with the audience? Yaron. And then second, a little bit more on fractional Partners and where people should reach you and what you can do with people.
- [36:28]
C
I will say this. I work with hundreds of businesses. The ability to start saying no is a superpower for growth and it just makes everything turbocharged. The team is turbocharged, the founders turbocharged. And the process of doing this is just getting clarity on a key areas of your business and answer a key number of questions that you probably were never asked. Walk through. Spend the time either as a founder or as an investor investor in a business that is the highest ROI activity or the highest value, acceleration or creation activity you can do for a business at the 2 to 20 million dollars stage by far. Do not spend a dollar on activities or initiatives before you have complete clarity. It can be assumption based, but it's okay as long as you have something that is clearly communicated in plain English, then you can deploy capital to actually pursue it and you'll be much, much more efficient and lucrative in the process. So that's my, my belief. Say no is a superpower. To say no, you have to get some clarity. It's not rocket science, it's a process. It takes a quarter, sometimes less. It's worth it. That's it.
- [37:50]
B
I love your message. I love what you do. I love the clarity of here's what you ought to do first. Because so many founders, they start to work with consultants, investors, others don't have that clarity. But here's the first thing we should do. And I think that clarity, that, that, that confidence, that conviction is so engaging and so important. Yaron Gowen, what a pleasure to visit with you. Thank you so much for joining us today on the Becker Business, the Becker Private Equity Podcast. You were just outstanding. Thank you very much for joining us.
- [38:20]
C
I appreciate it. I would leave with this. The Playbook is free and public and you can use it if you're a founder or it's Playbook Fractional partners. It's a notion. Do it as you will. With or without me, it doesn't really matter. I want this to be as prevalent as eos is in the entrepreneurial community.
- [38:41]
B
Absolutely phenomenal. Yaron, what a great pleasure to visit with you. Thank you so much.
- [38:45]
C
Thank you Scott. Thank you for having me.
- [38:49]
D
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