How Industry Benchmarks Create Business Value—Kristian Marquez, CEO, FinStrat Management

How well do you know your industry financial benchmarks? Have you reviewed or looked them up before? 

Our guest today is Kristian Marquez, and he shares with us the importance of industry benchmarks and beginning with the end in mind for your business.


The purpose of business is to create value.


Kristian Marquez is the founder & CEO of FinStrat Management. He is a C-suite executive whose career includes a pivotal role in taking a company from early stage to a multi-billion IPO. He is a Chartered Financial Analyst (CFA) charter holder since 2004.


This episode is powered by Big Sky Franchise Team. If you are ready to talk about franchising your business you can schedule your free, no-obligation, franchise consultation online at: or by calling Big Sky Franchise Team at: 855-824-4759.

If you are interested in being a guest on our podcast, please complete this request form or email and a team member will be in touch.


Dr. Tom DuFore, Big Sky Franchise Team (00:01):

Welcome to the Multiply Your Success podcast, where each week we help growth-minded entrepreneurs and franchise leaders take the next step in their expansion journey. I’m your host, Tom DuFore, founder and CEO of Big Sky Franchise Team. And as we open today, I’m wondering how well you know your industry financial benchmarks for the business that you’re in. And I’m wondering if you’ve even looked those up before or even aware of them. Well, our guest today is Kristian Marquez and he shares with us the importance of industry benchmarks and beginning with the end in mind for your business exit and growth. Now Kristian is the founder and CEO of FinStrat Management and he’s been a C-suite executive whose career includes a pivotal role in taking a company from early stage to a multi-billion dollar IPO. He’s a Chartered Financial Analyst Charterholder since 2004, and you’re going to love our interview. So let’s go ahead and jump right into it.

Kristian Marquez, FinStrat Management (00:57):

Tom, thank you for having me. My name’s Kristian Marquez. I’m the founder and CEO of FinStrat Management.

Dr. Tom DuFore, Big Sky Franchise Team (01:03):

Great. Well, give us a little background about FinStrat and what you all do.

Kristian Marquez, FinStrat Management (01:07):

FinStrat Management provides accounting, finance and reporting services to early stage companies, so heavy emphasis on software, given their dependencies on accrual-based accounting, but we also work with investors, both high-net-worth and venture capital firm.

Dr. Tom DuFore, Big Sky Franchise Team (01:24):

Perfect. Well, one of the things we’ve talked about reviewing and discussing is this idea of the cycle or stages businesses go through from starting a business, building that business and eventually exiting or selling that company. Given the clientele and folks you work with, certainly that’s going to be important. And what came to my mind in preparation for this was thinking about how a franchisor that sells a franchise working with that franchisee that might end up buying one franchise, and very often they end up buying multiple and it becomes a much larger enterprise all the way through to exit. I’d love for you to talk through it from that vantage point.

Kristian Marquez, FinStrat Management (02:01):

Sure. So one of the things that we do is we overlay our services with a fractional CFOs or Chief Financial Officer, and part of our role is to work with founders and helping them realize their dreams. Dreams take a lot of different forms, but I’ll simplify and let’s just say it’s an exit because they want to increase the nest egg and provide for retirement. And so one of the approaches that we take is we always begin with the end in mind. I don’t know about you, but when I was a little kid and you show up and you get a maze, I always go to the end of the maze and I’d work backwards. Well, it’s a similar concept and so in simplest terms, we want to answer questions like, well, when do you want to sell your company? How much do you want to sell your company?

Kristian Marquez, FinStrat Management (02:47):

And then we have to factor taxes and whether or not there are any other equity partners in the business. But once we have answers to those key questions, we can literally work backwards to answer the question of whether or not it’s reasonable to achieve your goals in the timeframe that you stated. And if it’s not, then we can either retool it or reset expectations. And generally what we find, there’s a couple of key inputs. It’s just growth. How much revenue can you expect to generate and whether or not there are real opportunities to increase that. Then what are your expenses? Because depending on the business and acquirers are either going to look at your top line, they’re going to look at your EBITDA, but there’s going to be key metrics that can be modeled to help answer the question, what do you need to accomplish in order to achieve your goal?

Kristian Marquez, FinStrat Management (03:32):

And once we have that model in place, then we can assist the business work towards fulfilling it. But the way I would encourage your listeners to think about it is if we were going to build a house. You’re going to hire an architect, you’re going to have a blueprint. And this is the identical concept. It wouldn’t make sense to just hire a general contractor and have at it if you haven’t already laid out what the plan is going to look like. In simplest terms, it’s just beginning with the end in mind and ensuring there’s a reasonable plan in place to help achieve it.

Dr. Tom DuFore, Big Sky Franchise Team (04:03):

So then when you’re working with your clients or helping someone through this process, we all start with the best laid plans and then business happens, life happens, events happens, circumstances change. So you’ve begun with the end in mind, but now what? Now something’s changed, they have a change of heart, something happens. How do you adjust in those scenarios?

Kristian Marquez, FinStrat Management (04:24):

So as part of the inputs that go into informing what a potential sale could look like and when is a concept of a benchmark. In any different industry, take your pick, software, retail, oil and gas, there’s no shortage of benchmarks available that tell you what type of gross margins are you looking for? What percentage of your spend should be devoted to sales and marketing, or general and administrative? So if we know what those benchmarks are, then we can actually better inform the plan as to how realistic it is. And the value of those benchmarks are not only for the plan, but they incorporate basically what you just asked. Every single business’s performance reflects life and by consequence, those benchmarks do as well.

Kristian Marquez, FinStrat Management (05:08):

And so a practical example would be, “Okay, I’m going to grow my revenue 50% month over month.” All right, well, then I would want to look at what industry you’re in and whether or not the benchmarks support that type of growth. And if they don’t, you have to reset your expectations, because your plan is just so disconnected from what’s feasible that you may need to reconsider your spend and your marketing and your approach.

Kristian Marquez, FinStrat Management (05:34):

Now to be sure, are there businesses that see exponential growth? Hundred percent. I am willing to bet that if you or I were to start a mask business at the beginning of the pandemic, and there were companies that did, we would see exponential top line growth because the market was absolutely starving for masks. You can extrapolate that concept to a lot of fads. I bet if you and I were to do an inventory over our life, there’s no shortage of being in the right place at the right time where you can see that type of growth. But I would argue that’s the exception, and most businesses are going to just operate in a normal market growth that generally mirrors GDP. Are there things that businesses can do to increase their odds of success? A hundred percent. And we see it on a regular basis. But no, I mean, you bring up a great point and it really just boils down to reasonable expectations.

Dr. Tom DuFore, Big Sky Franchise Team (06:28):

That kind of leads me to another thing I was thinking about, which is the importance of forecasting in general. And I’d love for you to talk through forecasting, maybe how you support folks or why you think it’s important.

Kristian Marquez, FinStrat Management (06:41):

It’d probably be helpful just to define forecasting. And in order to do that we need to start with actuals. And so let’s just say you’re running a business for a year, you would have a year’s worth of actuals. So a year’s worth of revenue and expenses to have a sense of what your business profile looks like. What the forecast is is to extrapolate out your revenue and your expenses into the future to anticipate what you think your financials are going to look like. I’ll oversimplify it and I’ll share that there’s generally two approaches you can take. Number one, will just be linear. Okay, I’ve been growing at 10% month over month. I’m going to presume I continue to grow 10% month over month. Or my expenses, 10% have devoted to sales and marketing, so I’m going to keep doing that. 10% has been to general administrative expenses, so I’m going to keep doing that.

Kristian Marquez, FinStrat Management (07:26):

And so you now have a view based on experience as to what you can expect, and that’s how budgets are created. But the difference is the second part would be not all growth, not all spend is linear. And so this is where the value of a good CFO comes into play is that if you have a pipeline and your pipeline consists of some big wins. And so let’s say you have a franchise and you have Walmart or Amazon in your pipeline and you anticipate in coming quarters that they’re going to make a really big purchase from you, well, that would start to look like exponential and not linear growth. And so a good forecast would not only anticipate that, but also the expectation of whether or not that sale would come to fruition. So if you were at the beginning of the sales cycle and it doesn’t really look like you’re going someplace, that forecast would look different than if you had exchanging red lines on an agreement or sales order and the deal was imminent to close.

Kristian Marquez, FinStrat Management (08:28):

And so depending on how likely it is, you can now start to better forecast what your revenue expenses are going to look like just by virtue of understanding what’s taking place in your business. So on the expense side, the idea would be, okay, well, let’s say you’re going to offer a new service line in your franchise and you know it’s going to take more people than you currently have. Well, then your model should then anticipate hiring all of those people and the associated expense load, benefits, taxes, insurance that it would take.

Kristian Marquez, FinStrat Management (09:00):

And so if anyone is listening to this and they’re saying, “Well, I need a really sophisticated model,” like anything, there’s pros and cons. I would tell you in my experience, and Tom, I admit I’m biased, I see tremendous value because if we really think at the end of the day what’s the purpose of a business, and I’d argue it’s to create value, the better we know our business, the better we have a handle on our business, the better position we are to create value. And so the most successful CEOs that we work with absolutely invest budget, time, and resources to answering those questions.

Dr. Tom DuFore, Big Sky Franchise Team (09:35):

As I was listening to you talk, it made me think about financial transparency throughout this process and just especially for a small business, for that owner, I was thinking of transparency in a couple of ways. One is transparent, just the owner or the small business leader being honest with themselves about where they actually are, kind of what you’re talking about with this forecast. You have to be honest about where you are, not just hoping that it’s going to be this exponential growth when maybe it’s not the best way to approach it. And then transparency, I was thinking too, in terms of just being transparent with your financials with staff or other key folks at the company. What’s your thought on being transparent with staff and team members?

Kristian Marquez, FinStrat Management (10:17):

On your first comment about being honest with yourself, I a hundred percent agree. I’ve not yet seen an advantage of kidding yourself. I don’t know that there’s much to unpack there, but yeah, I mean, at the end of the day, I would sooner say this. So much so being honest, I do run into founders who don’t have an accounting or finance background, and I do get asked the question, “To what extent should I understand my financials?” And my answer is, I’m indifferent as to what the business is. There’s tremendous value for anyone in the C-suite, whether it’s the CEO, the Chief Operating Officer, Chief Marketing Officer, take your pick. When they can read a set of financials, they’re absolutely going to be better positioned to run their business. It doesn’t mean that you have to understand journal entries. It’s just show me a balance sheet, show me a profit and loss statement and its core components and I’ll show you a business owner who’s at least checks a very significant box to run and grow their business.

Kristian Marquez, FinStrat Management (11:18):

As far as transparency with your employees, there’s competing schools of thought. On one hand, there’s people who think it’s smart. The other people who don’t think it’s wise. I fall in I don’t think it’s the wise component and it’s not because I’m necessarily of the ilk that there’s not benefit in showing them. There could be, but it really just depends on the scope of the employees. And in my experience, unless you’re really going to take time to teach staff how to read a set of financials, understand it, but then most importantly, understand that the business exists to serve all of the business stakeholders and not an individual, which in my experience can be very hard to do, i.e., “Hey, what’s in it for me, founder? Why am I doing all…? You’re making $10 million in revenue and I’m making $80,000. Why aren’t I seeing more of that?”

Kristian Marquez, FinStrat Management (12:13):

Well, “Hey, employee, it doesn’t work like that.” And so unless you’re prepared to have that conversation and then ensure that you can successfully deliver a message without interrupting your business, I counsel against it. Is it to say that there aren’t employees out there who couldn’t do well? There are. Today, there are a number of CEOs who will show everyone’s payroll, publish the financials, and I’ve not yet had really the benefit of asking them what their experience has been, but if I were to imagine it, I don’t know that I’d want to be in their shoes.

Dr. Tom DuFore, Big Sky Franchise Team (12:44):

Kristian, this is a great time in the show where we like to ask every guest the same four questions before they go. And the first question we ask is, have you had a miss or two on your journey and something you learned from it?

Kristian Marquez, FinStrat Management (12:54):

So back in 2013, I co-founded a telemedicine company with two other founders. We ended up raising about two and a half million dollars free revenue. Happy to share details, but I’ll say that we were all generally sharp. I’m a service academy graduate. My co-founders were board-certified physicians. Despite all of the best thought out logic in the world, we closed the business two and a half years later, not generating more than a hundred thousand in revenue. Extremely valuable lesson, and that is know your market. And there’s no substitute for knowing your market than actually talking with your customers, understanding what their dreams are, understanding what types of outcomes they’re looking for, what their pain points are, and how important it is to solve those pain points. When you have the answers to those questions, then you’re better positioned to understand will someone give you money for what you have as compared to just, “Hey, I’m smart. I can deduce and just believe I know the answer,” where in our case we didn’t.

Dr. Tom DuFore, Big Sky Franchise Team (13:59):

Let’s talk about a make or two.

Kristian Marquez, FinStrat Management (14:02):

So really fortunate. Had a bunch. I’ll hone in on the one that probably most people find the most exciting. So I was employee number eight for an early stage company. Got hired as a financial analyst for what was at the time a consulting firm. And the CEO was a go-getter, different individual but board-certified physician, Ivy League, Harvard Medical, Johns Hopkins residency, really sharp, and saw an opportunity in healthcare IT and elected to pursue it. And fast-forward nine years, I left the company was a year away from a 4.4 billion IPO. I was really fortunate in that I had a material hand in building that business.

Kristian Marquez, FinStrat Management (14:45):

When I left, I was a general manager over the second largest department of the company, so I had about a hundred million dollars in top line experience. But of that a hundred, I helped create 80 of it by building an intra business as a result of capitalizing on an opportunity that came about because of Obamacare. It was two years that we grew the intra business. What a phenomenal experience. Basically I got to wear a lot of hats, product development, sales and marketing, contracting, interacting with ops, just so many valuable lessons of really understanding of being in the right place at the right time, but more importantly, understanding your customers and delivering value.

Dr. Tom DuFore, Big Sky Franchise Team (15:27):

Great. Sounds like it’s just a great opportunity and experience to go through that rise as you expand so rapidly over a short time window. Well, Kristian, let’s talk about a multiplier that you’ve used to grow yourself or your business.

Kristian Marquez, FinStrat Management (15:41):

I would say that really the biggest thing, especially for early stage businesses, is not only knowing your market, but specifically what slice of the market, and it’s referred to as a niche. Basically the concept is today we live in a world where it’s easier to reach your buyers. It’s easier to get information in the hands of people who want what you have. But I’ve learned that the more focused you can get, the higher probability of success. And it’s important that I unpack that. But think about it a couple ways. Imagine you were just selling books as compared to selling books in a suburb of Atlanta that was specifically geared toward plumbers. I’m not suggesting that’s a big market, but if you think about it, that’s a really specific set of people who are looking for a specific set of information and because they’re looking for a specific set of information, they’re willing to pay more for it as compared to, say, someone who wasn’t.

Kristian Marquez, FinStrat Management (16:42):

And so if you couple that with what’s the number one reason that businesses go out of business, it’s lack of cash. So I know it’s a bit intuitive, but I don’t think it gets enough credit, is that really the goal of every single business owner is to create a net income and a lot of it. And so when you focus on a niche, it really positions you to charge a lot of money because your niche sees a tremendous amount of value in what you have. And charging a lot for your service is imperative because if you think back to any of the old econ classes you had and the efficient market hypothesis where eventually prices get driven down to zero because everyone is trying to outbid the other person, who wants to run a business like that? I don’t.

Kristian Marquez, FinStrat Management (17:27):

And so that’s one of many multipliers, but one I really like is focusing in on and providing value to someone very specific, because in my experience, they’ll pay a lot for what you have. And you could avoid the efficient market hypothesis of having to lower your revenue, your fees, so you can compete.

Dr. Tom DuFore, Big Sky Franchise Team (17:48):

Kristian, the final question we ask every guest is what does success mean to you?

Kristian Marquez, FinStrat Management (17:52):

Success is making the people around me better. I love the topic of leadership, love the topic of what does it take to attract and retain great people and within the company. And I think there’s a whole host of variables. Comp is definitely one of them. Opportunity, being respectful. But my sense has been is that when organizations take time to actually invest in their people so that they improve, the results are just win-win all around. As leaders, we’re in a position to do that and I know that when I was part of a larger organization, I cherished the opportunity to get better. There’s probably a longer list. If we had more time, I can go through, but I’m going to put that one near the top.

Dr. Tom DuFore, Big Sky Franchise Team (18:38):

Well, before we go, is there anything you were hoping to share or get across maybe you haven’t had a chance to yet?

Kristian Marquez, FinStrat Management (18:44):

The big thing is probably, like a lot of your listeners, business is a great opportunity to not only create but get feedback. And feedback, I’ve learned, is really valuable. And feedback takes a lot of firms. I mean, it could take a review if someone leaves on your website, or it could be simply someone buying more. But for everyone who’s out there, I’d say there’s no substitute for action and doing. And if you’ve ever been hesitant because of the unknown, I think that’s normal. I think the more people who understand that that’s just part of the equation and that you’re going to encounter that, go through it. Don’t let it hold you back. You’ll be really grateful that you did.

Dr. Tom DuFore, Big Sky Franchise Team (19:25):

And Kristian, what’s the best way for someone to reach out to you, get in contact with you, if they’re interested in learning a little bit more about what you do?

Kristian Marquez, FinStrat Management (19:31):

You can go out to our website, Fin, F-I-N, Strat, S-T-R-A-T, and then MGMT, short for management, .com. And you’ll see there’s a contact page on there. You can submit a request and someone on the team will get back. And happy to connect with any of our listeners.

Dr. Tom DuFore, Big Sky Franchise Team (19:49):

Kristian, thank you so much for a fantastic interview. And let’s go ahead and jump into today’s three key takeaways. So takeaway number one is when Kristian said to begin with the end in mind for your business, and think about what do you want to sell your business for? What’s your exit? How much do you want to sell for when you exit? I loved that description he said, he described when he was a kid, he always would solve mazes by going backwards. He’d start at the end of the maze and work to the front. I thought that was a great analogy there.

Dr. Tom DuFore, Big Sky Franchise Team (20:23):

Takeaway number two is to understand what the benchmarks are for your industry. And he said do you understand what those sales benchmarks, marketing, operational costs, others? And that information’s available. There’s great data out there for you to take a look at for that. Takeaway number three is when he described the miss that he had where he had co-founded a company, raised two and a half million dollars in pre-revenue. And after a couple of years, the company generated less than a hundred thousand dollars in total revenue over that time. And the lesson learned that he said was to know your market, know your market, know the market you serve, their preferences, and make sure you’re aware and test, test that out.

Dr. Tom DuFore, Big Sky Franchise Team (21:08):

And now it’s time for today’s WIN-WIN. So today’s WIN-WIN is when Kristian described what he said the purpose of a business is, and he said that the purpose of a business is to create value, create value. I thought that was a wonderful description and a great way to think of it that if you create enough value for someone, for a customer, they will buy your product or service. If you create enough value for your staff and employees, they will stay with you long-term and be productive and help grow your company, if you produce value for the community you serve and so on. So I thought that was a great takeaway and a great WIN-WIN for you to apply.

Dr. Tom DuFore, Big Sky Franchise Team (21:59):

And that’s the episode today, folks. Please make sure you subscribe to the podcast and give us a review. And remember, if you or anyone you know might be ready to franchise your business or take their franchise company to the next level, please connect with us at Thanks for tuning in and we look forward to having you back next week.

Posted in
Big sky franchise team logo inspired by the Old West.

Multiply Your Success®

Franchise Your Business