The Math to Scale Your Accounting Firm to $1M (2025)

Most accountants want to hit a million dollars a year in revenue, but very few can actually answer the question, what would it take mathematically to get there? And so in this video, I want to show you how to reverse engineer your path to a million dollars a year using math. Once you understand the numbers we're going to be running here, everything changes. Because now you actually know how much you need to invest into marketing during this season of scaling. And not only am I going to explain this conceptually, but later in the video, I'm actually going to walk you through three distinct examples of how this would work for a bookkeeping firm, a tax strategy firm, and a CFO services firm. If you don't know me, I'm Peter Vanderwaal. I'm the accountants marketing guy. I help scale a tax strategy firm from 0 to 3 million a year in three years. And now my company works with accounting firms all around the country, helping them crack the seven figure ceiling and then scale beyond it. All right, so there's two main KPIs that we're gonna be covering in this video that are really important to be tracking as you scale your business. And it's gonna help you understand how scalable exactly is my business as it stands today, and what are the changes that I need to make over the coming months here to make it more scalable in other wor, make it easier to grow my revenue very quickly over time. And the first KPI we're going to talk about here is cac. Okay? This means cost to acquire a customer. Now, for some of you, you may already be running ads or doing some form of, like, marketing, right? And so if that's the case, then your CAC is very simple. It is marketing spend divided by number of new clients per month. All right? And so if you're spending $5,000 a month on ads and you get five new clients from that, then your CAC is $1,000. If you somehow get 10 clients this month with the same amount of ad spend, then Your CAC is $500. And so this is basically a measure of how much marketing spend does it take to get a certain number of new clients. And theoretically, right, if we wanted to, you know, if we're at that $5,000 a month to spend, and we're getting five new clients a month, if we wanted to get 10 new clients a month, then theoretically we should be able to spend $10,000 and we'll get 10 new clients. Now, this gets a little tricky because many of you, especially in the accounting industry, may not be actively doing any form of marketing. Right. So how do you measure your CAC then? Well, the truth is that you can't. If you're spending $0 on marketing and you're getting 10 new clients a month just from organic and referrals and word of mouth and whatnot, then your CAC is $0. And that sounds good conceptually. But the problem you run into here is if my CAC is $0, then I can't go spend more money to get new clients, right? Because if I go spend $5,000 all of a sudden on marketing stuff, there's no past performance to indicate that I'm going to get more new clients out of this because I'm trying something new. So while it sounds good having a CAC of exactly $0, it actually is holding you back because you can't invest money into growth. You don't have a clear lever where I can like a big red spend money, get clients button that I can press to grow the company. So that's cac. I want you to hang on to that. Let's talk about the next metric here, which is ltgp. Okay? So lifetime gross profit. And so this is very simple. This is how much the customer pays you over their entire lifetime minus cost of goods sold for that specific customer. Okay? So if the customer pays you, let's say a thousand a month, and your average customer sticks around for 36 months, and let's say your cost of goods sold is, you know, $300 per month per client, right? So that's like the hours your bookkeeper's putting in. That's whatever software, like account you set up for the client, whatever else might go into that for you, right? And it's the same lifetime of 36 months. And so your LTGP then is going to be a thousand times 36 minus 300 times 36, which is your cost to deliver. And so your lifetime gross profit is about a little over $25,000 right? Now, that would be for a bookkeeping firm. But a lot of firms don't charge monthly, right? A lot of firms might charge. You know, if you're a tax firm, for example, you might charge like a, like a tax strategy fee, or you might charge like a tax preparation fee. So let's use another example here. Let's say you're selling tax strategy, and the client comes in and pays you $10,000 for tax strategy. Now, in a lot of firms, people aren't paying you $10,000 every single year for tax strategy, right? Maybe they come in for tax strategy this year, and nothing really changes about their situation for the next couple years. So there's no real incentive for them to sign up over and over and over again. But what they may very likely sign up for is tax preparation. And so maybe you charge, let's say, 2,500 for tax prep, okay? And the average client will use your tax prep service for the next four years after you do a tax strategy for them. Now, let's just say the tax Strategy costs you $1,500 to deliver, and tax prep costs you, let's say, 1200 to deliver, right? So that's our cost of goods sold on each of these. And so your lifetime gross profit here is going to be $13,700. So it's like 80500 bucks you make off of the tax strategy. And then it's the, you know, 1300 a year for four years for the tax preparation. And so you know that every individual customer you bring on is going to spend around $13,700 with you. Now, the reason both of these KPIs are really important here, CAC and lifetime gross profit is, is because this is the difference of what it costs to get a customer versus how much you make from a customer. Okay? So this is really your ROI on money spent into growing the business. Okay? So for example, if I'm getting a, let's say I'm spending 5,000amonth and I'm getting five new clients, so my CAC is $1,000. And let's take this bookkeeping firm example here. So let's get rid of that, and I'm going to make $25,200 over the lifetime of this client. That then that's a really good arbitrage. There's not many other things you could spend $1,000 into and get 25 grand back, right? Maybe some sort of crypto thing, if you're into that. But this is where we start to look at our business as an investment vehicle, not as a day job, right? So if I were to spend money on growing the business, what is going to be the ROI on that? And this is a metric that you can actually Measure. It's called CAC to LTGP. And so in this case, if your CAC is $1,000 and your lifetime gross profit is $25,000, then your CAC to LTGP is 1 to 25. Or I like to go LTGP to CAC. So your LTGP to CAC would be 25 to 1. So we can get a 25x return on our money that we spend into the business. And if that's the case, then you have a very, very, very scalable business here. This is a really solid investment vehicle for you. Now, if that's not the case, if your LTGP to CAC is like 2 to 1, meaning you double every dollar you put in, it's still okay. But I'm assuming there's also a lot of work that you're putting in to do this, right? And it's obviously higher risk than putting your money into, like, the s and P500. And so then we start to wonder, okay, is it worth even growing the business, or should we just put our money into the S and P or into real estate or, you know, start some other kind of business that's going to be more scalable? Now, here's the reality is you have levers you can pull to change these numbers. Okay? And we're going to walk through that here. By the way, if you want someone who's done all this before for firms just like yours to come step into your business and help you build all of this out, that's exactly what my team and I do. So we step into your firm as your chief marketing officer, and we actually tell you what strategies you need to implement, and then we'll go in and build those systems for you. If that's something you're interested in, click the first link in the description below. You can get more information there. But anyways, so we're going to walk through three examples in this video. Okay, so we're going to do a tax strategy firm, a bookkeeping firm, and a CFO firm. We're. We'll go ahead and leave timestamps below, by the way. So if you only care about the example related to your kind of firm, then that's fine. Just skip to that. I would highly recommend just watching all three to understand in full how this works, because this is going to help you if you ever open up another line of service at your firm and you're trying to grow that, or if you ever makes any sort of transition there. And just to understand this whole thing conceptually a little bit better. So in this scenario with a tax strategy firm, we're going to say this Firm is spending $5,000 a month directly on ads. They're spending about 3,500amonth on other marketing spend. Okay? So this would be like their software or the agency fee that they're investing into, or maybe a marketing person that they have full time on their staff right now. From that, they're getting a cost per call of $150, and they're closing 20% of the leads that actually get on a call with them. Okay, so that means that they're doing 33 calls a month. So that's $5,000 divided by 150, that's 33 calls a month. They're getting six new clients from that because that's a 20% close rate. And so that makes their CAC $1400. Now for this example, we're saying their average price point is $8,000 for tax strategy. Their tax prep price point is $2,000. The average customer sticks around for four years for tax prep after they do a strategy. And their cost of goods sold is about 30% on both of these services just blended. Right? So that means their LTGP is $11,200 and their LTGP to CAC is about just under 8 to 1.7.9 to 1, basically. So these are the stats we're working on. How do we improve these stats? Right, because this isn't bad. If you're getting 8 to 1 on your money, it's not bad. You can see that if this firm is, you know, let's say they're getting six new clients a month, they're collecting 48 grand a month. They're getting about five and a half X on their money immediately, right? So they spend 5,000 on ads, and that same month they're going to collect 48,000. That's pretty good. But what you can see here is that their growth is very slow. Right? So this annual run rate here is just projecting out how much money are they going to make over the next 12 months if they stay at this level. Okay. And so you can see, you know, they're going to be at around 600,000 and over 18 months, they're going to grow to about 800,000 a year. That's a very slow growth trajectory. Right? That's about maybe 25% a year. It's not bad. It's not great. And especially at this level, like 300k to around a million a year is kind of this, like, weird no man's land where you're still doing a lot of the delivery yourself. You're still working with clients face to face at that point. And so really, to me, like, I want to scale out of this place like as quickly as humanly possible. Right? So what are some of the levers we could pull to do that? Now let's look back at these stats here. Right? So we could just Double our ad spend. Right. If we spend $10,000 a month on ads, you can see that we're going to now get 13 new clients. Our roas, our return on ad spend actually gets a little bit better and our annual run rate immediately basically doubles. Right. So that's. That would be one way to do it. I wouldn't necessarily recommend just kicking your ad spend through the roof, just like out of the blue. So let's maybe go back 5,000amonth and let's look at some of the other levers we could pull here. Now, one lever we could pull is we can make our ads more efficient. So let's say we find some new strateg or we hire an agency who's, you know, better at what they do, and we're able to get our cost per call down to $120. Okay. So we basically shave like 25% off of our cost per call. That would now get us 41 new calls. And without changing anything else within the business, that now gets us eight new clients per month. Okay. And so that bumps our annual run rate up pretty considerably. Right. So now we're looking at 800,000 for the next 12 months. And that's going to continue to grow until a year from now will be just under the million dollar mark. That's pret. To me, that's not quite enough. And so what else could we do here? Well, we can see our close rate is about 20%, which in my opinion is a little bit low. That's kind of like, I would say low, normal. If your close rate is under 20% on cold traffic like an ad funnel, then you've got a major problem. So maybe we bump this up and we say, you know what, we're going to hire a sales rep who's going to close better than me because they're full time at this and they're going to close at 25%. And. And so now we get up to 10 new clients a month. And so that right there puts our annual run rate for this year up to right under a million dollars. Right. So that's pretty great. So that means that in the next 12 months, if we just stay at this exact same level, we're going to make a million dollars. Now the other thing we could look at Here is our month one ROAS. You see how that went up from 5.6 to 9.4. All this means is how much money did we spend this month versus how much money did we make this month? And the cool thing with your roas this is not the greatest measure of marketing success, but it is a great measure of how quickly can I reinvest back into marketing. Because if I'm spending a dollar to make $5.60 back, then I feel pretty comfortable spending $2 next month, right? If I'm spending a dollar and I'm making, in this case $9.40 back, then I'm going to feel really, really confident going and spending 2, 3, 4, $5 next month. So we could scale, okay, we're making $5,000 a month right now and we're making 80,000 back. Well, what if we bump that up to, you know, 6,000 next month and we start scaling up that way and then we do 7,000. Now all of a sudden we're making 112,000amonth and our annual run rate is continuing to increase beyond that. Now let's bump this back down right now. Here's the thing with this tax strategy example. We're collecting basically all of our cash upfront, right? We're getting a paid in full for that $8,000 tax strategy price point, which is great. But the reality is that's a one time payment. And then our income, you know, for, for the next few years is significantly, significantly lower than that. But this is kind of the play with a tax firm, right? You have some kind of high ticket front end to get them in like tax strategy, right? And then you retain them on this smaller thing that's easy to deliver on and that's really sticky, which is usually tax prep, right? So people are legally required to file their taxes every year. And if they had a great experience with you doing their tax strategy, then there's a fair chance they're going to hire you for tax preparation as well. And so what if we could increase the number of years that they're sticking with us for tax prep? What if we say we're going to retain them now for five years? So you can see that doesn't do anything in the moment because obviously this is payments that we're going to receive from them later on. But what you can see is that increases our LTGP to CAC from 13 to 1 to almost 15 to 1. So the short term game that's going to get us to million dollar years is really maximizing the new clients we're getting up front, the cash we're collecting up front and the return on ad spend that we're getting on that front end. But the long term play that's going to get us to consistently hit million dollar years and make it easier and easier and easier over time to grow the business is how long are we retaining clients for? Right. So we're paying one time, at this point, $850 to acquire a customer. How many years can we retain that customer for to max out the amount of money we're making from them over that lifetime? Right, because we could go spend $850 to get another $8,000 client, or we could just increase the amount of time somebody is sticking around with us to, you know, let's say seven years now. And now we're at like 18 to 1 LTGP to CAC. Right. So we're making $18 for every dollar we spend to get a new client. By the way, if you want to download this calculator and play around with it yourself, there's a link in the description below. All right, let's use another example here. Okay, so this is going to be a bookkeeping firm. And let's just kind of run through these same stats for them. All right, so for this bookkeeping firm, we're still going to be spending $5,000 a month on ads. We're still going to spend, you know, it's about 3500 bucks a month on agency and the software you use and your internal team devoted to marketing. Let's say your cost per call is $150. Still, your close rate's 20%. And so that means you're getting 33 calls out of this $5,000 in ad spend. And so at 20% close rate, then you're getting six new clients. So your cost to acquire a Customer here is $1,417. That's just 5,000 plus 3,500 divided by six. So your CAC is $1,400. Your average price point is $1,000. So technically, we're going a little bit in the red. You see here, we're spending $1,400 to get a customer that's going to pay us a thousand a month. So technically, we're losing a little bit of money the first month, and then we'll be profitable on it the second month. Right. Now, the initial contract, so how much they're signing up for upfront is 12 months, which means that they're going to, you know, they're going to pay us a thousand a month for 12 months. The customer lifetime is 36 months. So basically, people renew for another two years after the initial contract is up. Our cost of goods sold is still going to be 30%. Just for this example here, which means our LTGP is $25,200. So the gross profit we make over the lifetime of the customer, about 25 grand, which puts our LTGP to CAC at a really, really healthy level. This is almost 18 to 1. That's incredible. But as we look at this annual run rate here, you're going to notice a problem, right, because we're spending $8,500 a month on marketing to make $6,000 in new cash. Okay. So technically, we're not covering our cost fully until month. See that here in the month one row, ads. Right. So our return on ad spend is about 0.7. So this is going to be a real problem if you want to scale quickly because however much you're spending on marketing, if you ever want to increase that, you're going to have to come out of pocket for that, and you're not going to make that back for two months. And so you're always going to be constantly just like, going back into the red to get new clients, which is not a great place to be in. Right. So how are we going to fix that? Well, let's play around with these numbers. Right? So the reason I pick $150 cost per call and a 20% close rate is because these are kind of like the bare minimum, right? So most of our clients see closer to anywhere from a 50 to $100 cost per call very much depending on their niche and their offer. But, you know, ballpark, we can usually get this down by about 30%. And their close rate is typically depending on how good their sales team is. Right. So that's not really up to me. But 20% is kind of the low normal benchmark that we shoot for. If you're under 20%, then it's like, okay, we've got a fire here. We really need to fix this. O. Cause you're just. You can't expect to be profitable on ads if you're closing less than 20% of leads you're speaking to. Now, what we can do here is let's say we can knock our cost per call down to $120, right? And so what that does for us is that gets our CAC down to just over a thousand bucks. Okay? So at $120 cost per call, we're now going to have 41 calls per month. And if we just close that same 20%, that gets us about eight new clients. And so that means that we're spending 8,500amonth to collect about 8,000amonth in new cash. So now our month one ROAS, we' just barely below breaking even, month one. Okay, so that's a much better spot to be in. Now, what if we could bump our close rate up even more? Because ideally, the spot I'd like to be in is we're making more new cash collected every month than what we spend. You know, let's say we spend 8500 and we make 10 grand. Well, we can use that extra $1500 to bump our ad spend a little bit, and we can start to scale that way. Because the move with a bookkeeping firm is you're just trying to get as many of these small recurring customers as possible, humanly possible. Right. And however many you get, I mean, we can see we're keeping them for about three years. And so we could stop marketing today, or our marketing system could blow up today, and we're literally not going to start to see a decline for three years. Right. So that's a really great spot to be in, but it means that scaling is a lot slower. So what other levers could we pull here to get our CAC below $1,000? In other words, to get our roas to be maybe 1.2, 1.5. Well, the other thing here that I'm seeing is kind of low is our close rate. So maybe we can bump our close rate to 25% right now. What does that mean? Probably means hiring a more skilled sales rep or getting better at sales yourself. If you're still doing all your sales and you can't afford to hire a sales rep, improving your process in some way, shape or form to bump that close rate up to 25%. Right. So that means that we're now spending the same exact amount on ads. We're getting the same number of calls, right? 41 calls a month, but we're getting 10 new clients a month now. Okay, you see where this is going? And so we're spending 8,500amonth to get 10 new clients and make $10,000 in instant cash collected. Right. Month one. So now our ROAS is like 1.2. Now, is that near as sexy as the 9.4 we're getting on the tax strategy firm? No. Right. 1.2 is like very modest. But here's the thing. Over the course of just that first year, we're making 14.1x on our money. So that means for every dollar we spend on marketing, we're going to make $14 over the next 12 months. It's just going to take longer to make all of that money because we're charging monthly for the bookkeeping service, right? So this is a much, much, much better position to be in as a bookkeeping firm or as any type of firm that charges monthly. Right. We're making a buck 20 for every dollar we spend on marketing. And so that basically means in this case, our annual run rate is going to grow by 10 grand a month. So in other words, we're adding 10 grand a month in recurring revenue every month. All right, so here's where this gets fun, right? So now that we're making basically fifteen hundred dollars in profit, month one, right? So we spend 8500, we make ten grand back, we can add that fifteen hundred dollars back into our ad spend each month. So let's just say we start adding, you know, we bump our ad spend up by 1500amonth. So now we're spending 10 grand a month. That means we're going to get 13 new clients, which bumps our roas up a little bit, as you can see here. So we're actually more profitable now. So that means that we now are spending 10 grand to make $13,000 back. And so what if we, what if we do it again next month? We reinvest that profit back into our marketing. So now we're going to spend 13 grand on ads and we're going to get 19 new clients. So now by reinvesting that profit back in for the two months, we've doubled the number of clients we're getting per month. And so we can continue to do this until our annual run rate gets up to the point where we're comfortable. Right? So let's say we're trying to scale from, you know, 400 grand a year to a million a year in 18 months. And that's our goal. So we're just gonna continue doing this. Let's zoom out a little bit so we can see everything. We're just gonna continue reinvesting until we, we get to that million dollar a year run rate. So let's do that again for another three months. So now next month we're gonna add $6,000 and we're going to make 32,000 back. And so you can see just by doing this, reinvesting our profit for six months, we basically we got to the point where we're spending $60,000 a month on ads, which is a little bit ridiculous. But if you're trying to scale extraordinarily quickly, you can see how we can get from $5,000 in ad spend to almost 60 grand in ad spend. Extraordinarily fast. Now let's say we're literally trying to do the minimum reinvestment back into our marketing we can do to get to the million dollar a year run rate by month 18. So we do that for one more month. So we're in month four now we're spending 20 grand a month on ads, and we're just over 900k is our annual run rate. Let's do it for one more month. So we're going to spend $32,000 a month on ads and we're going to get $1.3 million. That's going to be our annual run rate. Now what if we extrapolate this out to that like four year mark? So we're getting to the point where we're actually starting to see some of that churn, right. Because people are staying for 36 months. Let's extrapolate it out to like 48 months and see, see where this puts us. Right. All right. And this is where our growth is going to start to slow. Right? So you see month 35 or do 2.3 mil. Month 36, we do. We're on track for 2.36, so we add about 60 grand. But we're going to start to slow down here simply because we're going to start to lose clients as well. Right. And so you can see eventually we start to kind of stall out around two and a half million dollars a year. And so this is where you could get into, okay, what can we do to extend the lifetime of any given customer? Right. So in other words, get them to stick around longer. Or we could say, you know what, we're going to just raise our prices to 1200 bucks a month. And I mean, that's a massive boost at this point because you've got so many clients. But that's also going to be a tricky move in the business. Right. So you'll have to decide if you can actually do that. Raise prices on your existing clients. But you have options here, right? So you could try to raise prices that would raise your lifetime gross profit. Let's say we raised our prices to 1200, that raises your lifetime gross profit to 30,000. Maybe there's a key staff member you can hire that gets customers to stay an extra six months on average, just providing them like a better experience or some sort of increased value. And so maybe that bumps your customer lifetime up to 42 months. So that brings you up to $35,000. But you can see here the levers that you can pull, right, to Increase the amount of profit per customer, which is going to affect how scalable your firm is over this long time horizon. Right? So like this is a roadmap from $400,000 a year to eight and a half million dollars a year, almost $9 million a year. In just four years, you're going to get to the point where you're spending 96 grand a month on ads, which is, by the way, going to feel really uncomfortable for somebody who's on track to only make $800,000 a year over the next 12 months. But by doing that next month, you're on track for $1 million in the next year, and then you're on track for 1.2 and 1 point, almost 1.5 and 1.7. So you can see how you're kind of like investing into the future essentially. Right? And obviously you might not be the type of firm that can handle 192 clients in a month, and that's okay too. Right. We could take this way slower. Now you can see this is kind of an exponential growth curve, right? This is kind of, this is maybe a little bit ridiculous, but instead of putting all of our profit back every single month, we could say, hey, we're just going to put 1500 dollars extra in every single month. So that is all of your profit, obviously, month one, but then month two, that's about half. And then we just keep growing that way. So we just grow our spend on a flat rate of $15,000 a month. And so that means our, our growth rate is much more linear, but that still puts us at a million dollar run rate by month 18 here. So that's probably a much more realistic way to grow. Because obviously you also have to grow the number of new clients you're prepared to onboard in a given month. Right? Because even by month 16 or month 18 here, it's getting kind of ridiculous. 63 new clients a month, that might not be the pace you want to grow at, but by looking at the math this way, you get to make that decision for yourself. Right? And understanding the math and what it takes, you can make that call and build an actual strategy rather than just kind of like deciding, I think I want to grow, you know, let me throw $1500 into ads here and oh, this agency seems like they know what they're talking about. I'll hire them here. No, you are the business owner. You need to look at your business like an investment. And you need to understand what it's going to take to grow the business. And then you go Hire people for those individual pieces of the puzzle. But you are abdicating your one job as a business owner, the one thing that only you can do, if you are asking other people to come in and hoping that their external strategy is going to work for you. Now, let's do one more example here. And this is going to be a CFO firm. Okay, so let's just start with our baseline stats. Okay, so we're spending $5,000 a month on ads. We're spending 3, 500amonth on our agency or our marketing department. Now, you can see here, this is the first big difference between this and the bookkeeping firm. Our cost per call is going to be like $350. And the reason for this is just very simple. We're charging $3,500 a month. And so that's obviously a very different avatar. Right? We have a couple of CFO firms that we work with and you know, they're charging anywhere from, yeah, 3,500 to up to like five or $10,000 a month for their services. And yeah, we typically see a way higher cost per call for them because it's just more expensive to get in front of that type of person. Right. Everybody wants to advertise to rich people. It's much harder for the algorithm to find rich people. And so, you know, we're going to see a higher cost per call there now with still a 20% close rate. In other words, closing one out of every five sales calls we have, that means we're going to get 14 calls in a month and we're going to on average, close two. I'm just rounding down here. Technically this would be almost three, but we're just going to say two. So now that puts our cost to acquire a customer at about 5, $4,250. And our price point, of course, is 3,500amonth. So that means we're losing about $750. Month one. All right, now this CAC really high. And we're going to walk through some ways to lower this. But I want to show you with these baseline metrics, what this is going to look like. The initial contract, again, 12 months, customer lifetime, again, we're just going to say 36 months. Cost of goods sold is about 30%. And so that means our lifetime gross profit on any given client is $88,000. And our LTGP to CAC is about just under 21 to 1. Okay. So long term, you can see these are amazing numbers, right? The long term play here. This is fantastic. But the short term play, as you can see, again, we're losing money month one. So that's not great. What can we do to fix that? We're spending 8,500amonth, and we're collecting 7,000amonth. How can we get this up to the point where we actually have profit month one that we could potentially reinvest back into our marketing? Well, let's start here. So the first thing I'm going to say is if we have a $350 cost per call, then that's actually a sign that we're getting really good lead quality here, because that means that we are weeding out the people who maybe don't actually have money to invest with us. We're weeding out people who don't actually have a large enough business that we can, you know, support them in this CFO capacity. And so let's say our close rate is actually going to be like 25%. Right? So we're closing one out of every four calls that we take. All right, so we're getting now three new clients a month, and that takes our cost to acquire Customer down significantly. $2,800 to acquire a new customer for this. So looking at our month one roas, that basically fixes our return on ad spend problem right there, because we're spending now $8,500 a month, and we're making 10,500amonth, like, back right away from these new clients that we're signing up. All right, so those three new clients, we're making, you know, $2,000 in profit month one with that high advertising spend. So now that we're making a profit on month one, we can actually start reinvesting money back into our ad spend here. So let's say we're going to bump our ad spend by a thousand dollars for month two. Right? So we're going to go to $9,500 a month in ad spend, which means we're now going to get four new clients. Well, that's pretty cool. So we're going to collect $14,000 in cash collected. And so you can see we're even more profitable. So we're spending a dollar to make a dollar fifty back, more or less. Now let's say we're going to bump it by another thousand dollars the next month. And so we're going to get five new clients. And so you can kind of continue bumping this ad spend. And maybe you've got a cap on the number of new clients you're able to onboard in a given month, right, because you got to hire new bookkeepers and you got to hire another CFO eventually to, you know, work with some of these clients. So let's say five clients a month is kind of your max, right? So now we're kind of capped here because we're getting five new clients a month. Marketing's working, sales are working. We're collecting $17,500 on $10,000, $500 of ad spend. That's a pretty great place to be in, right? And let's say again, we've got a $400,000 firm. We're trying to scale to a million dollars a year. So what can we do to scale faster, right, to get to a million a year faster? Well, there's a couple levers we could pull, right? So number one would be increasing your onboarding capacity, right? And so that would be kind of my main thing I would be looking at here is how can we increase the number of clients we're onboarding per month? If we're trying to scale quickly, that's going to be our biggest possible lever. But maybe we say, hey, that's just not possible at this point. With this price point here, there's somebody else that we would need to hire, but that would bump our cost of goods sold up too high, and we're not going to be able to afford that. So at that point, you might look at increasing prices, right? So maybe we can bump our price up to $4,000 a month without decreasing our close rate in any meaningful way. So we're doing 4,000amonth, and we're still closing one out of every four leads that we speak to. So that's pretty solid. So you can see here, that makes us more profitable month one, right? And it also increases our. The. The growth of our annual run rate, right? So we're up to, you know, 750k as our kind of run rate over the next 12 months. By the time we get to month 18 of this strategy. Now, this is still a really slow growth here, though. So we bumped our prices by 500 bucks, and we're still only able to bring on five new clients a month. Now what else can we do? Well, maybe we're okay with decreasing our close rate. And so maybe we say, hey, we're going to bump our. Our price all the way up to 5,000amonth, knowing that that's going to take us down to a 20% close rate, right? Maybe we test that, and that's what happens. So let's test this we're charging 5,000amonth and we're only going to close at 20%. So where does that put us? So it puts us in a place where we're still profitable. Month one, right, we get, we're in a buck 20 for every dollar we spend on marketing. And it means continue bumping our ad spend up a little bit higher. Because now you see our, our cost to acquire a customer went back to 4250. But because we're charging a higher price point, that's okay. And we can still stomach that, right? So maybe we're going to scale ad spend for another month and let's see where that gets us. And then another month and so now this gets up us up to our five client a month max. So with the $4,000 price point, with a higher close rate, we are going to get to about $750,000 for the next year. By month 18 of doing this and with this higher price point and a lower close rate, we're able to get up to 815,000. So basically we bumped our annual growth rate up by about $60,000, which is cool, but that's a relatively small impact, to be honest, especially for as big a change as bumping your prices this high. So to me, I would be much more inclined to say, look, our lifetime gross profit to CAC, we're making $30 for every dollar we spend to acquire a customer. Right? I'm okay, actually if our cost of goods sold goes up to 40% and so our profit actually our LTGP to CAT gets lower, our lifetime gross profit gets lower. But that would maybe allow us to hire people faster who can help us onboard clients faster. And so maybe that increases our onboarding capacity to 10 new clients a month. And so over the next 18 months we're going to scale up to the point where we're onboarding 10 new clients a month and some by month 14, we'll get to that point. We're spending $21,000 on ads, almost 22,000. We're onboarding 10 new clients a month. And you can see by month 18 now we're going to hit a million dollar a year run rate. And if we project this out actually a little bit further even, let's say bump it out to, we'll bump it out to like 30 months. We're going to be at about $1.6 million a year by really only scaling our marketing for about 13 months. So we're going to have this really painful like 13 month period where we have to Build a lot of systems and hire people, and we have to spend a lot of money on marketing. But by doing that, we can basically plateau for the next, you know, 12 months or however long. And we continue growing. And you'll actually continue growing for however long your customer lifetime is. Right. And at a certain point, we'll start to plateau here. So let's project that out. When would we start to plateau? Okay, so I extended this out a little bit further, and it looks like we're gonna plateau at just under 2.2 million at about four years. Okay. So we can literally, we can scale our marketing and, you know, our internal operations to be able to take on 10 new clients a month. And we can. We can kind of go through that painful scaling season for just over a year. It's about 14 months. And that's going to allow us to then basically coast for the next three years without even really trying to grow. Right. So we're gonna go all the way from month 14 here, where we kind of like start to plateau our actual scaling efforts, and we're gonna go all the way to month 48. So almost three years, we're gonna be able to just like, plateau and just rake in tons of cash. And so this would be the point where you start to actually decide, okay, we've got a ton of money we're making. Every single month you see here, we're spending $21,500 to make $50,000 back, and then next month, we're just gonna make $50,000 from these new customers we just brought on without doing anything differently. And we're actually gonna make $600,000 over the next 12 months from these 10 clients, rather that we spent 21,500. So now we can decide, okay, is it going to be more efficient to put more of this money back into the business and keep growing that way, or is it going to be more efficient to put it into real estate or the S&P 500 or, you know, some other. Some crypto Ponzi scheme that you want to get into at that point. What this math allows you to do really, is just treat your business like an investment vehicle. You can see the actual ROI from putting money back into the business versus taking it out, investing into something else. And by doing that, you can actually make a decision on, okay, how big do I want to grow the business? If I'm getting to a $1.3 million a year run rate, and let's say I've got 40% margin on that, then I'm taking home just over half a million bucks a year. How big do I want to grow my personal income through the business versus using some of that money to invest into other assets that are going to build, you know, generational wealth for my family? These are questions you have to be asking, and this is the math that's going to allow you to do this. Hey, thanks for watching this video. If you liked it, then you're probably going to like this one, too.