Shownotes
BIO: Jon is the Founder and CEO of FranBridge Consulting, a 2-time Inc. 5000 company, and he is a top 1% franchise consultant.
STORY: Jon co-founded a marketing and call-center business that appeared successful on the surface, growing to millions in revenue and dozens of employees. However, excessive customization and an inability to charge prices that matched rising costs meant the business never became sustainably profitable.
LEARNING: Profitability is oxygen. Knowing when to admit you’re wrong matters just as much as knowing how to start.
“Humble yourself and admit when you’re wrong, course correct, and pivot.”
Jon Ostenson
Guest profile
Jon Ostenson is the Founder and CEO of FranBridge Consulting, a 2-time Inc. 5000 company, and he is a top 1% franchise consultant. Jon is also the author of the bestselling book, Non-Food Franchising. Jon draws on his experience as a former Inc. 500 Franchise President and Multi-Brand Franchisee in helping his clients select their franchise investments.
Worst investment ever
Leaving the corporate world felt like freedom. After years of structure, predictability, and steady paychecks, you finally get to build something of your own. That was precisely where Jon found himself: grateful for his corporate experience, energized by the idea of business ownership, and eager to prove he could create something meaningful on his own terms.
A promising partnership and a compelling business vision
Shortly after leaving corporate life, Jon partnered with a colleague to launch a marketing and sales company. He owned 60 percent of the business and ran day-to-day operations, while his partner held the remaining 40 percent.
The vision was compelling. The company would help franchise businesses grow by handling their marketing, answering inbound calls through an in-house call center, and booking appointments directly for clients. The promise was simple: make the phones ring and convert those calls into revenue.
Early momentum and the illusion of success
At first, it worked. The business grew quickly, attracting a strong leadership team and building a culture Jon was proud of. With around 35 employees and annual revenues of $3 million to $4 million, the company appeared successful from the outside. The team was energized, clients were signing on, and the pace was exciting.
When growth didn’t translate into profit
But beneath the surface, there was a quiet, persistent problem.
The business wasn’t profitable.
Despite all the effort, the long hours, and the constant tweaking, the company hovered around breakeven. Some months it lost money. Others it barely scraped by. Payroll was always looming, and profitability felt just out of reach. Jon tried adjusting pricing, shifting emphasis between marketing and call center services, and introducing new technology to increase value.
But every fix only delayed the inevitable question he didn’t want to answer: What if the model itself was broken?
The hidden cost of customization and complexity
The core issue turned out to be customization. The business was designed to scale by serving franchise systems with repeatable processes. Instead, each franchisee insisted their market was different, their staff was unique, and their customers required special handling. Wanting to please early clients and drive revenue, Jon said yes. Again and again.
Over time, the company became highly customized, operationally complex, and increasingly expensive to run. Pricing no longer matched costs. The more the business grew, the harder it became to make money. What looked like top-line success was masking a model that couldn’t sustain itself.
The hard decision to walk away with integrity
Eventually, Jon made the difficult decision to wind down the business. There was no dramatic exit or acquisition, but there was integrity. The team helped place employees in new roles and transitioned clients responsibly. Still, it was a painful experience.
The failure wasn’t just financial; it was an ego hit. This was Jon’s first true experience of business ownership, and letting it go meant admitting that the original idea wasn’t as strong as he believed.
Lessons learned
- The biggest lesson came from contrast. After running his own startup without a proven product-market fit, Jon developed a deep appreciation for franchising. Unlike a startup built on assumptions, franchises offer historical data, real performance benchmarks, and access to owners who have already walked the path. You can see results before you ever invest.
- There were personal lessons, too. Knowing when to admit you’re wrong matters just as much as knowing how to start. Humility, course correction, and the willingness to pivot are not weaknesses in entrepreneurship; they’re survival skills.
- Profitability, Jon learned, is oxygen. A business that can’t consistently operate in the black eventually suffocates, no matter how exciting the vision or how talented the team.
Andrew’s takeaways
- One of the most important disciplines for any business owner is accurately closing the books each month. That means reviewing not just the profit and loss statement, but also the balance sheet. If your accountant can’t do that, it’s time for a new one. Monthly financial clarity allows you to identify problems early, before they become fatal.
- Another insight comes from scale. Based on analysis of tens of thousands of companies globally, Andrew points to $7.5 million in annual revenue as a critical threshold. Below that level, it’s tough to afford the management talent and infrastructure required to run a scalable business. If you can’t get there efficiently, it may be time to rethink the model.
- Finally, complexity is the silent killer. Businesses naturally drift toward offering more products, more services, and more custom solutions. Every added layer increases costs and erodes margins. Only disciplined leadership can stop complexity from overwhelming profitability.
Actionable advice
If you’re building a business, be honest about whether you’re chasing revenue or building something scalable. Early customization can help you survive, but staying there too long can trap you in a low-margin cycle that’s hard to escape.
Focus on creating profitable top-line growth, not just growth for its own sake. Learn to say no, even when opportunities feel exciting. And remember: there is no perfect time to start a business. The best way to learn is to get in the game early, without betting everything, and build experience that you can compound over time.
Jon’s recommendations
Jon recommends starting with education and proven frameworks. He offers a free downloadable copy of his book, Non-Food Franchising, in a concise 90-page guide. The book has received strong feedback and provides practical insights for anyone considering business ownership.
Listeners can download the PDF or audio version by visiting FranBridgeConsulting.com and sharing their email address. Those who prefer a physical copy can purchase it on Amazon, with all proceeds supporting Hope International.
No.1 goal for the next 12 months
Jon’s goal for the next 12 months is to grow passive income across multiple asset classes, including franchising. His goal is to build sustainable revenue streams that create freedom across all areas of life: faith, family, fitness, finances, and future ventures.
Passive income, for Jon, isn’t just about money. It’s about capacity—the ability to choose how you spend your time and energy.
Parting words
“There’s never a good time to start a business. Get off the couch, dip your toe in the water, read our book, get in the game, and start thinking about it.”
Jon Ostenson
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Connect with Jon Ostenson
Andrew’s books
- How to Start Building Your Wealth Investing in the Stock Market
- My Worst Investment Ever
- 9 Valuation Mistakes and How to Avoid Them
- Transform Your Business with Dr.Deming’s 14 Points
Andrew’s online programs
- Valuation Master Class
- The Become a Better Investor Community
- How to Start Building Your Wealth Investing in the Stock Market
- Finance Made Ridiculously Simple
- FVMR Investing: Quantamental Investing Across the World
- Become a Great Presenter and Increase Your Influence
- Transform Your Business with Dr. Deming’s 14 Points
- Achieve Your Goals
Connect with Andrew Stotz:
Transcripts
Andrew Stotz:
Matt, Hello, fellow risk takers, and welcome to my worst investment ever. Stories of loss. To keep you winning in our community, we know that to win in investing, you must take risk, but to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives, and I want to thank my listeners in Georgia, in specifically Atlanta, Georgia, for joining us today, fellow risk takers, this is your worst podcast host, Andrew Stotz from a Stotz Academy, and I'm here with featured guest, John Austin. John, are you ready to join the mission? Hey, excited to be here, Andrew, yeah. Well, I want to introduce you to the audience. So let me do that right now. John is the founder and CEO of Fran bridge consulting, a two time Inc 5000 company, and he is a top 1% franchise consultant. John is also the author of the best selling book, non food franchising. John draws on his experience as a former Inc 500 franchise president and multi brand franchisee in helping his clients select their franchise investments. John, take a minute and tell us about the unique value you are bringing to this wonderful world.
Jon Ostenson:
Yeah, absolutely you know, Andrew. I love what I do, and I get to every day, help entrepreneurs across North America and sometimes even internationally, step into business ownership. And what I do is I introduce them to a wide variety of different opportunities that we feel strongly about, that are open and looking to grow in their market, and help guide them through the process of exploration and help them understand that there's so many different paths to business ownership. And, yeah, just love the case studies and helping our clients step into what they've always thought about, what they've always dreamed about, but oftentimes didn't know how to make happen, and that is stepping into business ownership.
Andrew Stotz:
Yeah, it's such a interesting topic. And there's two parts that I was thinking about when I looked at non food franchises, because I thought, wait a minute, there's non food franchises. That was my first thing that I had in my head. Oh, yeah. You know, it could be a laundromat, or it could be a such and such. But give us some examples of what are some of the non food franchises or franchises that people would get? Yeah.
Jon Ostenson:
And I'll start by saying, We've got nothing against the food guys. We love them. We need them. But my humble belief is there are easier ways to make money, and I'm more than happy to get into the reasons why, but no some of the areas that we see people resonate with today. It's a wide variety of different industries that oftentimes don't coincide at all with their backgrounds. They're bringing transferable skill sets, but not industry knowledge, into these opportunities, and it's everything from home and property services, so many different niches within that space, a lot of smart money getting involved there. It's industries like health and wellness opportunities and categories like kids or pets or the senior space. You know, everyone's the aging population, you know, catering to that in different capacities, certainly B to B services as well, which resonates with a lot of background. So, you know, I'd say that trend that we see, and I don't like the word trend, but the theme is understandable, cash flowing, businesses, things that aren't going out of style, that should stand the test of time.
Andrew Stotz:
Yeah, that's interesting. I mean, out of, out of all of those, do you have any favorites that you think this is a, this is a really good one, and I've seen a lot. Or are they like your children? And they all are equal?
Jon Ostenson:
Well, I'll show you the spectrum here. So some of the ones that I'm invested in. I've got an asphalt paving and line striping business. So, you know, parking lots. I've got another one that's temporary walls. Can, you know, containment walls around renovation projects and construction sites. So, you know, B to B businesses. There I was in Miami this weekend kicking off the launch of one that we're really excited about. Gary Breca, the health guru, is aligning with Tony Robbins. We actually had dinner at Gary's house. This is around a longevity franchise. It'll be a little heavier investment, but it's all around longevity biohacking. It's have all sorts of different types of devices and modalities in there, as well as your peptides and everything else. So yeah, we see a lot of interest in health and wellness. That's definitely been an area that people are asking
Andrew Stotz:
about and and for you know, you've listed off some different ones that you're invested in. For a typical person, when they come in, they're probably going to end up thinking, I got to do one of these things. I'm assuming that there's not a vehicle for someone to say, I want to invest in five different franchises. They can't run them. But if they had to make a decision and say, you know, here's one that that you think is interesting, I'm just curious, where would you say the future is like, for instance, the aging population is interesting, but you know, that could also be a really challenging one with all regulations and, you know, all of that stuff. I'm just curious where you think the most interesting opportunity is, or the best one?
Jon Ostenson:
Yeah, you know, I think the senior space is a great one, and, you know, certainly in home senior care. But there's also other franchises that cater to that space. There's one that we've got several clients plugged in. To right now that provides exercise and fitness and stretching services to senior facilities. They come around every week, you know, maybe a couple times a week, almost like an outsourced PE department, if you will, for these senior facilities. You know, that's a, that's a benefit business where you're providing benefit to the community, right? It's kind of a feel good business, recurring revenue. It's needs based, you know, they're always going to be paying for that type of service. So I'd say that's one that I'd point to right now. But some of these B to B services, ones too, whether it be insurance adjusting or cost mitigation, consulting, freight brokerage, again, things you wouldn't think about unless they're put right in front of your face.
Andrew Stotz:
And you know, when you think about franchising, when you think about business in general, you're trying to think about, you know, what competitive advantage do I have here? Do I have some IP or some very unique way of doing something? And what I'm thinking about franchises is that I'm thinking that, well, in some cases, you may not have any super original, let's say intellectual property or something, but it's just that you've got an operating system that you can do better than all the rag tag competitors that are going to pop up in, let's just say physical PT, you know, physical therapy as an example. Or is it built around, you know, some particular unique advantage? Yeah, I'd say,
Jon Ostenson:
you know, certainly there are proprietary elements of different businesses, but oftentimes, to your point, you know, the benefit is, you know, you may be going up against fragmented, unsophisticated competition out there, and you're able to come in and bring that powerhouse of a marketing team and the technology stack. Mean you're really starting on third base. It kind of fast forwards your path to profitability, into growth is because you've got a support team on the sideline in that franchisor supporting you or your operator. Oftentimes, people will put an operator in the business to run it allows you to not have to carry all the daily support water for that operator. But again, you have marketing that's been optimized for other locations already. You're able to step into technology stack. You don't have to go out and recreate the wheel. Maybe you've got the ability to buy in bulk for goods or services that you're procuring. It may or may not be a household name people oftentimes think of with food, brand is everything, right? Hotels, brand is everything. I mean, what about insulation? That's a $50 billion a year industry in the US, no one can name a brand of insulation, but there's some franchises that play in that space. So it's everything else that comes to the table, not just the brand.
Andrew Stotz:
And 30 years ago, my best friend came to Thailand, and he said, Let's start a coffee factory. And so we started a coffee factory that's now 30 years old. And it was like, I mean literally cutting through the jungle outside of Bangkok to set up our factory. And, you know, I just think that everything start had to start from zero, and as a result, you know, we barely survived the first 10 years. You know, it's just like mistake after mistake, misunderstanding, problem, losing a customer. Financial crisis came and hit in 1997 it's like everything came to hit us. Now, luckily, he is unstoppable, and we were able to finance our pathway through that, you know, with our own, you know, our own resources. But you know, if I look at it now, I can definitely see the benefits of franchising in particular, one of the things that really is hard these days is marketing and sales. And if a franchise has a good system for marketing and sales, it's so valuable, I would think,
Jon Ostenson:
yeah, and you've, you got the marketing sales component, you also have, you know, the product market fit has been established, right? There's other markets that are operating a similar business successfully. You can see their financials before you ever sign the agreement. Nothing's a sure thing. Do franchises ever go out of business? Absolutely. But a lot of times, it's on the operator, not the system. In many of those cases, one thing, I mean, during that time, Andrew, during that 10 year period, you know, you guys probably felt lonely oftentimes too, right? You're in business all by yourself. And you know, one of the benefits of franchise system that oftentimes gets overlooked is you've got this built in mastermind of other franchisees that are living the same thing, day in, day out, exchanging best practices, learning from each other. Amazing. So it does provide kind of that support network for you as well.
Andrew Stotz:
And I'm sure that some friend franchise organizations promote that, whereas others just kind of leave their owners, you know, doing their own thing. Am I right in saying that there's a spectrum of
Jon Ostenson:
that absolutely franchising is just like every other industry out there, and that you've got great players that provide great support, that lean in and drive the right behaviors, then you've got franchises that are not as strong. Maybe the leadership team doesn't have the experience coming in, and that's where we come in and try to help our clients identify the, again, the top opportunities in their market.
Andrew Stotz:
And I'm assuming you're only us, or are you outside of us also? Or how do you how's your business go? Yeah, it's
Jon Ostenson:
really focused on the US and Canada and. Both countries, but yeah, I'd love to do more internationally. I've in the last couple years, I've met with multiple international franchises during my travels abroad, but right now, we're not set up to it. Things are just very different in other countries, as you imagine, from a relation.
Andrew Stotz:
So yeah, and I've seen some franchise come here, you know that have? You know, done pretty well, and I think it's interesting in for Thailand and other countries like us so well, that's a great introduction to what you're doing. Now it's time to share your worst investment ever. And since no one goes into their worst investment thinking it will be, tell us a bit about the circumstances leading up to it, and then tell us about your story.
Jon Ostenson:
Absolutely, you know, like so many of your listeners, Andrew, I had a long run in the corporate world, and, you know, very thankful for that experience, but always had that desire to get into business ownership. Never knew exactly what it looked like. And so my first, you know, shortly after leaving the corporate world, I started a company with a partner, and I was 60% he was 40% so I was the one running the day to day. And, you know, we built it up. I attracted a great leadership team. Really sold them on the vision of where we were taking the business. And the idea that I had that we built the business around, was kind of a marketing and sales component. We had a marketing team, and then we had a call center that would field inbound calls. And so the idea was we would make the phones ring for our clients, and then we would answer them and book appointments. And so we actually worked with franchises. Those were our clients, and we grew the business. We were doing a couple million a year, probably 4 million. Ballpark had about 35 employees. We're having a lot of fun. Great culture, great team. You know, again, this is my first true business ownership experience, but the one challenge the model wasn't profitable like I thought it would be. So we were busting our butts, but we weren't making any money. We're right around break even, and someone's even losing money, and for the efforts that we're putting in. Of course, I tried tweaking this and adjusting that, but really was just kicking the can down the road at not wanting to admit to the fact that the model may not be what I thought
Andrew Stotz:
it was, and that's because you just couldn't get the price that you should have gotten. Or is it because the cost of, let's say, the staff was higher than you had expected?
Jon Ostenson:
Yeah, you know, it was a combination of both of those things. I would say that the main culprit was we became too custom. So the idea was we'd be able to offer competitive pricing for a franchise system, because all their franchisees would be treated somewhat similarly, right? It's just rinse and repeat. However, all these franchisees were individual business, business owners and Oh, their market was unique, or they their staff was unique, so we needed to book calls a certain way, or this marketing doesn't work in that we got all that type of feedback, and we accepted that feedback, and we made adjustments. And as a result, we became too custom. We were doing a lot of things, and all of a sudden our pricing model didn't work. And so again, we made adjustments where we would pull back on the emphasis on marketing. Let's double down on the call center and our value proposition there, and try some new technology and constantly trying to add value, but we weren't able to get to the point of being able to charge the price that we needed to to make the model profitable.
Andrew Stotz:
And now, with all of your experience, when you said the model wasn't profitable, what? What does profit? What does it mean if you were to say that this particular model is profitable. I mean, obviously there's super profits and then there's losses. But what does profitable mean to you?
Jon Ostenson:
Yeah, I think when you're a business owner, you're looking at that monthly P and L, right? And it's what I call the oxygen of profitability, getting in the black, where you're not having to figure out, you know, where that next payroll is going to be funded by, you know, having to put your own money back in the game. So fortunately, my business partner and I were both solvent, and we kept the business going for a good while. But part of it was a pride thing, right? You know, again, here, this was my first venture. There was a lot of pride riding on the wanting to keep it going
Andrew Stotz:
for sure. So how would you describe the lessons that you learned from this?
Jon Ostenson:
Well, in hindsight, you know, I pulled the trigger on winding the business down. You know, didn't have a sexy exit found, but I'm really proud of how we handled it. We found homes for most of our employees, for most of our clients. You know, I look back, you know, feeling good about how we handled it, but it was an ego you know, shot to the ego lessons. I mean, really, the biggest one would be my appreciation for the franchise model. Again, I tried my own model. There hadn't been Product Market Fit established. And here with franchising, I just love that you can see historical results. You can talk to other owners who run the same business before you ever start the business yourself, right? And all the things that we just talked about that are the benefits. So I'd say that was my biggest takeaway, you know? And then, of course, there's certainly personal lessons that come out of an experience like that. You know, be able to humble yourself and admit when you're wrong and course correct, and use the P word pivot, yeah,
Andrew Stotz:
I would say, you know, some of the things that I took away from that story was so one. Of the big pieces of advice I always give people who are doing startups or early stage businesses is close the books every month and on time and make sure they're accurate. We're not talking about just the P and L the balance sheet too, and they, you know, people say, Well, my accountant doesn't know how to do that. Then get another accountant. That's the core function of an accountant, and make sure that the finances are closed every single month, and then sit down and go through it. And that way, you can assess whether it's not profitable, you know, early on and then make your adjustments. And if those adjustments don't work well, then you've got, you know, a problem. There's a second thing that I have learned that I think is associated with this, and this is my $7.5 million revenue number. So I'm a financial analyst. I've looked at 26,000 companies worldwide. I've calculated average levels of profitabilities at the gross profit level, the operating profit level and the net profit level. And then I've calculated what's the cost of a good quality management team, and I've calculated the cost of what's, what is the cost of the infrastructure that you need to build a real business, that's the ERP system and all kinds of other infrastructure that's becoming more and more critical and more and more expensive. And then, and then I looked at, you know, general operating costs and other things like that, and then I worked backwards into the margins that would be average margins. And the number comes out to $7.5 million you've got to get your business to $7.5 million as fast as possible to be able to afford the management team that you need to run it and the infrastructure you need to scale it. And if you can't get to that quickly, try something else. So that's something that you made me really think about now. The other thing is something that I experienced in my coffee business, which you'd said, became too custom, unique solutions for, you know, everybody, the natural flow of business is complexity. It must move towards complexity. You just you can't stop it. You know, it's so hard to stop, only the most disciplined and experienced people in the world can stop the complexity of a business. And I see that in my coffee business, which I'm not, I'm not an employee of the company, but I'm an investor in the company. And we go through the finances in the business all the time talking about it. But, you know, sales people, customers leaders, are going to bite at every single opportunity that they see that's presented to them, and they want to say, can you do this? Can you do that? This guys do that. These guys do that. Can you do that? And what ends up happening is that you get a proliferation of products and services and offerings, and then that complexity drives up the cost and then drives down your profit. And what I really focus on now is trying to figure out, how do we scale one thing that we're doing really, really well, and that lesson about became too custom, too many unique solutions, really hits home with me. Any thoughts on those things?
Jon Ostenson:
Yeah, no, 100% and I hope that those listening will take that to heart. Customization. It's easy to say, yes, you want to please, especially those early clients, those early customers of yours, right? You know you want to win business, so you'll do whatever it takes again, driving the top line, but not the profitable top line. And so, yeah, yeah. Lesson learned there. And brings me back to why I love the discipline of a franchise system and learning from others.
Andrew Stotz:
So yeah, and that's the other reason. The reason why we end up doing all that, oftentimes in the beginning is because our original idea is not as good as we thought, and the market isn't there for it. So we end up in a phase prior to the 7.5 million that I call chasing revenue. We have to do it. You have to, you have to customize. You have to go get the revenue to pay the bills, but you've got to, there's a point where you got to break, break that pattern of customization, to chase revenue, to then become a scalable business. And that's, you know, a critical like turning point. So let's go back in time. Let's go back to your excitement about starting this business with your friend. And you know, all the great ideas you had at the beginning the entrepreneurial seizure, as Michael Gerber says, So, based on what you learned from this story, and what you continue to learn, what's one action that you'd recommend our listeners take to avoid suffering the same fate?
Jon Ostenson:
Yeah, you know, I'll start by saying, there's never a perfect time to start a business, right? And I. Do think most people out there, they've never run a business, they have a desire to run a business. You know, grass is always greener. They look around, they see friends of theirs that are successful running businesses. There's never a perfect time. But as you think about it, I'd say, get in the game sooner than later, right? Get in the game. Learn some lessons before it's too late. Don't bet the farm you get in the game, start to improvise. My humble belief based on, I see so many cases out there, so many case studies. A lot of people are out there looking for an existing business to buy, and they feel like they're an entrepreneur because they're playing the game. They're talking to companies about selling. Most of these people look for three years, four years, five years. That's time they could have spent starting a business. And then they finally come to me, and they're like, oh, maybe I should be looking at franchising. I'm like, Yeah, whatever you do next won't be the only thing you ever do. So I encourage people think about what's right for the next chapter of your life and your business. What's that building block that you can put in place and build off of? I found in my experience, oftentimes, if they start with a franchise and they learn some best practices and how you stand up a business, go out and start a business later on, you know, go out and buy a business, but have a foundation that you can build off of.
Andrew Stotz:
All right, so what's a resource that you'd recommend for our listeners?
Jon Ostenson:
Yeah, I'd love to share a free copy of our book, non food franchising. I tried to pack a ton of content into 90 pages. We've gotten great feedback. It's a best selling book, but we'd love to provide a free downloadable version to all of your listeners. If you got your friend, come to our website. Fran, bridge consulting.com F, R, a n, bridge consulting.com share your email address. We'll send you links to download either the PDF or the audio version. Certainly if you'd like to buy the physical copy out on Amazon, all the proceeds go to hope, international, great nonprofit that we support so great would love
Andrew Stotz:
to share that. Why do you have a tandem bike on the front of that?
Jon Ostenson:
Because you're not alone. You're riding the bike with a partner.
Andrew Stotz:
One reason why I asked about that is because I've recently been rejiggering one of my courses, which is called finance made ridiculously simple, and I've decided that I'm going to map it into a bicycle metaphor of a person ingests energy through food, and they lose so think of energy as revenue. You know, food as revenue, they're going to lose a portion of that in the process of digestion and in the process of respiration, and what they're left with is what you could call operating profit. And then the question is, how efficient, or you could call it gross profit either way, but let's say then the question is, how efficiently Are you able to operate that business? And if you're highly efficient, it means that you're going to have a higher net profit, which is going to be the force of your foot onto the pedal. You get a 2% net profit. You got a really weak force. You get a 10% net profit, you got a much stronger force, and that's usually driven by experience, like a bicycle, you know, expert a rider is, you know, really great at transferring that energy into force on the pedal and then the chain ring that you're pedaling on. If it was tiny, you wouldn't be able to pedal. You know, you could, you could pedal fast, but it wouldn't be really productive. But if the chain ring was bigger, then you would be able to pedal it at a bigger pace and make more of an impact. That's what I would call the asset turnover, the amount of revenue you're generating per assets. So the combination of all that gets you to the return on assets. And then what I then say is, Okay, now let's take it from Return on assets by linking the chain to the back wheel. And now we're talking about financial leverage, which is going to get you your return on equity. And that's ultimately the speed of the bike. Yeah, you know, you can be running, you know, running your chain ring really fast, but if you've, you know, if the more leverage you have, the faster you can take the bite. And if you take it too fast, what you can do is, you know, you hit a hill, and then all of a sudden you can't move up it.
Jon Ostenson:
No, I love that. And the idea is you get the pedals move, and you don't have to pedal as hard, because you got the flywheel in effect. And obviously the analogy of trim the fat comes into play here too, right?
Andrew Stotz:
Totally. And then, then what I then do is say, Now, imagine it's a tandem bike, and imagine that the person sitting on the back doesn't pedal. That's the shareholder. Yeah, the outside shareholder in any company is benefiting from the internal operational efficiency and the financial leverage of the company, and they're going to suffer the risk of it and the benefit of it, so it has to be balanced, but what we want to be able to do is provide a smooth ride and a fast ride for outside shareholders, so that they want to provide more capital, so that we can continue to grow so any. Ways. I just saw your tandem bike, and that made me love it. I haven't finalized it, and I've been struggling because originally I was going to tie it into a flywheel, but I realized nobody ever can visualize what is a flywheel. They can visualize it a bicycle.
Jon Ostenson:
Shout out. Shout out to Jim Collins on
Andrew Stotz:
that one. I mean, yeah, what a great book, in fact, on the bookshelf right back there. So last question, what is your number one goal for the next 12 months? Yeah, gosh,
Jon Ostenson:
I love goal setting. I love this time of year as I think about this new year. Number one goal. I've always got revenue goals. I've always got personal goals. I think through things in five domains, you know, faith, family, fitness, finances and franchising, of course, to be the fifth F. But for me, a big thing, you know, this kind of powers everything else, right from creating capacity in other areas of my life to do things I want to do, is that passive income number so very focused, I invest in a wide variety of asset classes, franchising being one of them, but it's about creating passive revenue streams that allow me the capacity to do more of the things I want to do in these other domains.
Andrew Stotz:
Pull the F Batman, a lot of F's, okay? And one question that I had when you just said that is, are there any investment vehicles like ETFs or funds that are now publicly available so people can invest in franchises, rather than, you know, having to, you know, build, you know, buy one.
Jon Ostenson:
Yeah, no. I love the idea that there's short answer is, no. I've done some beta testing around trying to match up operators and investors. And, you know, I think there's a model to be had by having found an efficient way, in my experience, of making it happen.
Andrew Stotz:
So okay, that's the future. Well, listeners, there you have it, another story of loss to keep you winning. Remember, I'm on a mission to help 1 million people reduce risk in their lives. And as we conclude, John, I want to thank you again for joining our mission. And on behalf of a Stotz Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?
Jon Ostenson:
Like I said, there's never a good time to start a business. Get off the couch, dip your toe in the water, read our book, you know, get in the game, start thinking about it. More than happy to jump on a call. Entirely free to work with us.
Andrew Stotz:
Fantastic. And I'll have links to you, to your book, your website, and everything, so that people can get in touch with you, and they're thinking, 2026 is the year to make it happen. Well, that's a wrap on another great story to help us create, grow and protect our wealth, fellow risk takers, let's celebrate that today, we added one more person to our mission to help 1 million people reduce risk in their lives. This is your worst podcast host, Andrew Stotz, saying, I'll see you on the upside. You.