Dawn of a New Era The Billionaire Brain Podcast
Oct 21, 2026 · 26 min · 10 segments
**Ep 200: The CFO Behind Multi-7-Figure Growth: Why Founders Must Learn to Think Like Finance CEOs** What if growing your revenue is actually making your business poorer? In this episode of **Dawn…
Pam JordanGuestDawn McGruerHostI love this, Pam, because honestly, I work with so many service-based businesses and agencies, and one of my specialties and fortes is scaling that type of business because the business models that I see, 80% of them are broken.
And then before you know it, they come to me and they're like, Dawn, we're not earning any money.
What do you think the financial warning signs are that tell you that a company has scaled too quickly or that its growth is becoming dangerous? Because I see it a lot.

So this is kind of accounting term-y, but gross profit margin is a number one thing to look at.

So gross profit margin is your sales less your direct costs, and it's a percentage.

And just going down, down, like, you know that that growth is costing you more money.

And then the other thing to consider is as you grow your business, you typically have to grow your overhead because then you need managers.

You need that middle tier and then you need customer service people and then you need an admin and everything.

So you need to look at your gross profit margin and your expenses as a percentage of revenue, because if both of those are going the wrong direction, it's a big sign that you're about to be out of money.
And for me, I always explain to people that I wouldn't advise just getting more and more clients, like change the business model.
And like for boutique agencies, you can have a really gorgeous life with a lot of freedom and have like a staple 20 to 40 clients in a year that be doing like five to 10 mil.
When founders start to scale, I see that they go into spend mode quite quickly because the advice that they hear from everybody else is like, you need this, you need that.
I love this, Pam, because honestly, I work with so many service-based businesses and agencies, and one of my specialties and fortes is scaling that type of business because the business models that I see, 80% of them are broken.
And then before you know it, they come to me and they're like, Dawn, we're not earning any money.
What do you think the financial warning signs are that tell you that a company has scaled too quickly or that its growth is becoming dangerous? Because I see it a lot.

So this is kind of accounting term-y, but gross profit margin is a number one thing to look at.

So gross profit margin is your sales less your direct costs, and it's a percentage.

And just going down, down, like, you know that that growth is costing you more money.

And then the other thing to consider is as you grow your business, you typically have to grow your overhead because then you need managers.

You need that middle tier and then you need customer service people and then you need an admin and everything.

So you need to look at your gross profit margin and your expenses as a percentage of revenue, because if both of those are going the wrong direction, it's a big sign that you're about to be out of money.
And for me, I always explain to people that I wouldn't advise just getting more and more clients, like change the business model.
And like for boutique agencies, you can have a really gorgeous life with a lot of freedom and have like a staple 20 to 40 clients in a year that be doing like five to 10 mil.
When founders start to scale, I see that they go into spend mode quite quickly because the advice that they hear from everybody else is like, you need this, you need that.
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