In this presentation Matthew Larsen explains a systematic framework for reverse‑engineering business goals into five controllable input metrics—net margin, monthly churn rate, median monthly retainer, cost per call, and close rate. Using a HyperOptimal dashboard that pulls data from Plaid, Stripe, Calendly, CRMs and ad platforms, he demonstrates how to calculate the revenue, client count, sales calls, staffing needs and ad spend required to achieve a $1 million net‑profit target. Four scenarios are modeled: a “shitty average” agency, a 20 % improvement, a second 20 % improvement on top of the first, and a high‑performing agency. Each incremental improvement dramatically reduces required revenue, client volume, calls, hires and ad spend, illustrating how small metric gains compound into massive business impact. Larsen concludes with concrete tactics for improving each metric (price increases, churn reduction, better onboarding, higher‑value offers, ad optimization, AI automation) and emphasizes that having a clear, numeric view of these levers enables decisive action and outsized growth.
Chapters
90% of people who set business goals end up missing them, not because the goal was wrong, but because they never turned this goal and broke it down into numbers that they could actually aim for. So today I am going to show you how to reverse engineer your business goals. So hitting them stops feel like hope, stops feeling like hope and starts feeling like actual math. This is the exact framework that I used for 12 years and that I give to all of my clients as part of their onboarding. We'll start at the end goal and then we'll work backwards through the inputs that we actually control. Then we'll find out what the constraints are and how to remove them. I will also be going through an actual example and show what happens in 4 different scenarios so we can see how different improvements can lead to huge results. So let's go and explain a little bit of what I have on the screen here. We have a few dashboards, we have something called reverse engineering, and then we have our metric stuff, and then we're going to have room for each of the scenarios. So the scenarios we're going to go over are the shitty average business. We're going to show what a 20% improvement looks like. We're going to show it another 20%. Improvement on the original 20% improvement look like. And then we're going to look what a strong business looks like. So the 5 things that we can actually control in terms of inputs are the net margin, the monthly churn rate, the average or median client payment— either works unless you have a few whale clients, and then we need to do the median— the cost per call, and the close rate. So what I have in the HyperOptimal tool is I have a bunch of dashboards that show you all of these metrics automatically, and then they actually pull directly from your integrations. So you get it right the first time. If not, you can usually use a spreadsheet for this just as easily. It'll just take some time and effort. The financial stuff, I typically will just go and see transactions in or cash in and cash out from Plaid. For churn, I'll see the start and the end date for the customers. For sales, it's a combination of the CRM. It's a combination of the Stripe and the Calendly. And cost per call, combination of cash out divided by calls booked on things like Facebook ads, cold email, you name it. So what we're going to do is we're going to go through the reverse engineering here. And I have it in this spreadsheet here because it's a little hard to see and zoom in here. And I think it will be better on a spreadsheet. So the first thing we're going to do is we're going to set up some of the metrics for a shitty average business. So you can see. So for all of the scenarios, we're going to assume that our net profit goal is $1 million. Net profit goal. We'll just say that's going to be true here. The 5 inputs that we kind of control are in green: our net margin, our monthly churn rate, our median monthly retainer, our close rate, and our cost per call. We're going to do this with an ads— paid ads is the traffic source in this scenario. Little bit different if you use outreach, a little bit different if you use content, but they're all going to be the same thing. Now I'm going to go over some stats here, and you might think that these are terrible, but you probably live in a bubble. And these are very realistic for the vast majority of agencies and service businesses. So let's break it down because if we have these 5 metrics, we can extrapolate all other metrics. That's part of the reason they're so powerful and they're also the levers in your business. So if we want to get a net profit goal of $1 million and we have a very average or very, you know, bad but average net margin of 15%, that means to hit that goal, we need to do $6.6 million in revenue. Hard to believe, but a lot of businesses have a 25% monthly churn, and if you're clients stay on average of 4 months. That's going to be you just for context. If we need to get that $6.6 million revenue and we have a median monthly retainer of $3K and the average client relationship is 4 months, that means we have an LTV revenue only, not even gross profit LTV of $12,000. That means to hit our $1 million net profit goal, we need to get 555 clients over the course of a year. If we're converting 15% of these from cold traffic, that means we're gonna have to have 3.7K calls. That is 14 calls per workday, Monday to Friday, 71 calls per week, 308 calls per month. And if we want all of our closers to take 5 calls per day, that means we're gonna need 2.83 closers. So basically 3 closers. If we want to have 2 appointment setters per closer to make sure their calendar's full. That means we're going to need to have 5.65 appointment setters, which basically round up to 6. If we are not very good at advertising in this case, and we have a $1,000 cost per call, that means to hit this goal of $1 million net profit with all of these lever points, we will hit it if we spend $14,136 on ads per day. And that's just how it works. It's indisputable. So this is what I mean. Like, let's just say you have this shitty business and I'm honestly not judging. A lot of people just say, I want to make $1 million in a year. They don't go through this process. They don't track any of their metrics. They don't know. So really, like, instead of your head being in the clouds here, if you just spent $14,136 a day, got $1,000 per booked call, close rate of 15%. Average payment of $3K and you, they lasted for 4 months, you would achieve your goal. This is exactly what I mean when people, when most people haven't done the math. So let's begin to show you how powerful even small improvements are. So let's go back and let's do this again, but let's basically times everything by 1.2 to indicate a 20% improvement. I'm gonna do that on my phone here. So let's see. So give me a 20% improvement on these. So a 15% improve— 15% times 1.2 is 18%. Right away. Now we don't even have to do that much revenue and to hit that same million-dollar mark. All we would have to do is $5.5 million in revenue instead of $6.6 million. Now let's take that monthly churn from 25% to 20%. I believe that's 20%, but sometimes it can get complicated going down. We're just going to say it is. Hopefully I'm right. Now, instead of 4 months, it's 5 months average relationship. Lucky us, right? We can see that just by doing that, the clients we need go down from 555 all the way down to 370 with just a 20% improvement on 2 of these 5 metrics. And this is why it gets so powerful. So essentially, let's keep going. Our LTV is already increased because we lowered churn. Now we're increasing our payment. Now our LTV is literally 50% higher. It went from $12K to $18K, and now we need 308 clients. Now we're closing more people. Now look at, we only need 1,714 calls. And let's just take this down from 1,000 to 800 and let's screenshot them. And then we'll do a little before versus after. This is what happens when we Improve our business by 20%. Let's get it mostly the same size. I'll drag it over there after, but let's look at it side by side here. Hopefully you can read that a little bit. So same goal, $1 million, but with the increase in net margin, instead of $6.6 mil, we only need to get $5.5 mil in revenue. Our average client is staying 5 months instead of 4. Our LTV is $18K instead of $12K, and now we only need to get 308 clients that year instead of 555. It's literally, we don't have to get almost half as many clients. How amazing is this? And now instead of getting 3.7K calls, we only need to get 1,700, literally almost 2,000 fewer calls. How great would that be? We only need to do 6.54 calls a day. That means we only need to get 1, but we still have to round it up to 2 closers instead of 3 and 3 appointment setters instead of 6. And now instead of spending $14.1K per day on ads, we only need to spend $5.2K to get that same result. Can you imagine? It's just truly amazing. Now let's go and add that extra 20% on there. I'm going to keep this over here, actually. So we can easily do it. So what is that? I have to bust out the calculator for this one. I think it's 21.6, but I don't want to be wrong. It is 21.6. And now let's get this to— what would that be? 16%. What is that? 3,600 times 1.2, 4,320. Close rate, also 21.6. So 800 divided by 1.2. Hopefully that math works out, but we're just going to pretend it does. Hopefully that is a 20% decrease is what I mean, but I know it can get a little funky the same way that currency conversion gets a little funky. So let's see what we're going with here. Now, remember we have the exact same goal. So hopefully we can see that. So now You know, let's do what we started at and then let's do here. So $6.6 million down to $5.5 million. Now it's only $4.6 million to get that same net profit. Now instead of 4 months and then 5 months, our clients are staying for 6.25 months. Now we have, instead of $12K LTV, it's all the way to $18K, now $27K. The clients required was 555 and now it's all the way down to 171. Now the calls required is 3.7K all the way down to just about 800. Now we can just get one closer because I got to do 3 calls per day. And now we only have to spend $2K a day on ads instead of $14K. Remember, all to achieve the exact same result. Now let's go to what I would consider to be an actual good business here. 40% margin, monthly churn rate of 7%. Monthly retainer, let's just say $5K. We don't need to go crazy. Call booked of this, and then a cost per call of about $250. Now is where it gets absolutely mind-boggling. So let's take it over here and I'm going to need to zoom in a little. So remember, we needed to get $6.6 million in revenue. Now we only need to get $2.5 million if we had a really good business. Our average client relationship started at 4 months and now it's 14.29 months. Our LTV started at $12K and now it's $71K. Remember, we start at 555 clients and now we only need to get 35. Isn't that like mind-boggling to you? And 3,700 sales calls. Now we only need to get 140. Probably can't even have a closer because they quit because our calendar is not booked up enough. And we only need to spend $134 per day on ads when we used to spend $14,000. So I don't know if it's lost on you, but that is business. Just because we did all of this is 100 times better. So we basically $14,136 divided by $134. So this business, from a real point of view. Is 105 times better than the average business. So when you wonder how some people make an absolute killing when they're in the same business as you, this is how they are hitting the important metrics. They're reverse engineering and seeing what they actually have to do. And when you do that and you see it on the screen, you can just say, which one of these is my most like worst metric? Okay. Everybody on the team is fixing this metric this week. Okay. Now that's up to baseline normal. Okay. Now we're going to fix the next one. So this is kind of the whole point of this business theory video. If you actually do this properly, you are going to make so much money because you're going to have a good view of your numbers and you'll always know what action you need to take to grow your business. I can't imagine, or can't even begin to communicate how many times people, I don't know what to do right now, like on my schedule. If you have your numbers, it'll be very clear what you need to do. And then you, you know, how do I increase net margin? I raise prices. I cut waste. I automate and use AI instead of hiring. How do I decrease monthly churn? I have a better onboarding process. I have a quicker time to first value. I have better communication. I have a better one-on-one meeting with the client framework. How do I increase monthly retainer? That was the increased price. How do I I could get a personal brand. I could be posting content to nurture them. I could have a better pre-call flow. I could train my sales reps better. I could follow up more frequently. I could have a better offer, right? How do I decrease my cost per call? Better offer, higher click-through rate on your ads, better call booked rate, better show rate. Like, this is really why someone like me is much more successful than the average person. And then there's people who are way more successful than me who do this and all they do are focus on the lovers.
