Jim Johnson (speaker) warns against unchecked scaling—hiring people and spending money without market-proven reasons—and argues businesses must practice continuous expense control. He recommends regular reconciliation of expenses, routinely cutting unused subscriptions and unnecessary purchases, and not waiting until year-end to address overspending.
This idea that we just start throwing a bunch of people and money at stuff to solve all of our problems is insanity. It's the number one reason I see you guys go down. You build up for what you believe you're going to do, scaling wise, whether that's because there's opportunity or just because you think you are. And with no historical reason to say you are and no study to determine whether you can or if it's capable in your market. And you just decide, hey, we're gonna go for 5 to 10 million, and you go based on that. I'm gonna hire these people, I'm gonna spend this much in marketing, and guess what? You don't make the 10 million and you're out of business. You cannot run a business that way. And so you have to have expense control. You need to be on top of it all the time. You need to have this reconciliation thing once. It's one of the things we do here still to this day in this business. It's applicable to every business. Hey, what do we have in expenses that we could cut? We're looking at that all the time. Do we have some subscriptions that we don't use anymore? Are we buying something that we don't use anymore? What. What are all the expenses that we can cut? We don't wait till the end of the year to go, oh, man, we just, we spent a lot of money, so expense control.
