Matt Blanton of Culture to Cash On Five Things You Need To Know If You Want To Build, Scale and Prepare Your Business For a Lucrative Exit
An Interview With Jason Hartman
Have Clarity in the Bigger Vision
When exiting, every business should have a freedom number protocol, meaning they know the exact number they need to achieve to exit the business. Having a clear image in mind is the guiding principle to navigate the journey to successfully exiting a business.
As a part of our series about “Five Things You Need To Know If You Want To Build, Scale and Prepare Your Business For a Lucrative Exit, I had the pleasure of interviewing Matt Blanton.
Matt Blanton, co-founder of business coaching and consulting firm Culture to Cash, is an experienced business coach who focuses on helping business leaders realize their full potential, while maximizing the performance of their company. Matt specializes in empowering teams to work together, fostering a healthy culture that forms a solid foundation for a business to achieve exceptional results including an increase in revenue, profit and business value. As a current co-founder and former business owner, Matt recognizes that a business is the single greatest asset in a business owner’s life, and strives to inspire leaders to maximize their business’s functionality and financial potential to achieve their goals.
Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?
After owning three companies that I’ve bought or sold, or all of the above, I have a real fascination with scaling companies, and understanding how to guide them from a point of being stuck to a point of scaling and ultimately exiting. Beyond this however, the bigger piece is simply the fact that having my experience, I enjoy being able to help someone else navigate this challenging journey.
When offering guidance to other business owners and leaders wanting to exit their business, I often tell people about the printing, design and marketing company I owned. When the time came to sell the company and the end approached, I was watching as our warehouse was being emptied — our furniture, the equipment, all of the little material items that laid the foundation of the culture that was our company was gone. I remember thinking at this moment, ‘I miss my folks, my people, our culture and the energy that we created within the walls of this warehouse.’ This exact feeling was what prompted me to do business coaching and consulting. I wanted to help business leaders not only maximize their business capabilities, but also the team that allows them to do so, which means building, strengthening and nurturing a culture that allows your business to flourish. The culture that our company created was the source of the feeling I had that day — proud, fulfilled and hopeful — a feeling I want to help all business owners experience when the time comes to exit their business.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
When we first started the printing, design and marketing company, money was tight. With startup costs like initial investments, operating and equipment expenses, advertising, unexpected charges and limited revenue we were definitely trying to stay afloat. To manage the heavy workload when I’d get jobs and we would need to run machines at night to get it done, I would work all day and all night to ensure we were able to deliver the materials to the customer by the deadline. More nights than I can remember, I would sleep by the machine to load paper in, check the quality of the product and do whatever else was needed to make sure the job was done correctly.
The mistake I made was that during the initial stages of operating the business, my small team and I (which consisted of two other people) failed to recognize the importance of hiring additional help. Over working without expanding our team delayed our growth. If I hired more people, we could have progressed much more quickly, while relieving a significant amount of stress and allowing me to rest at home rather than spending sleepless nights with my printer.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
I have a couple that I would like to share. The first one that comes to mind is, “No amount of successes in business can overshadow failure in the home.” The reason why I appreciate this quote is because I believe that the more emphasis that somebody puts in a business, the more they detach from their home life, making room for problems to occur. This disconnect can erode important family relationships, making it incredibly hard to repair a damaged marriage or relationship with a child. When the home is healthy and doing well, then the entrepreneur is better prepared to handle pretty much any challenges that come their way.
The second quote I live by, I believe acts as a life lesson in itself, is by Friedrich Nietzsche and reads, “He who has a why to live can bear almost any how.” Essentially, as long as we have a definitive “why” — whether that be our family, our wealth, our goals, our dreams — and are clear, purposeful, intentional and have integrity in what we are pursuing, we will have strength in order to persevere and build courage to get to the next peak in our journey.
Both of these quotes are intertwined in my opinion, and extremely relevant in my day-to-day life. Personally, my “why” is my family — my wife and children. They are the reason I am able to wake up every morning and tackle the daily challenges on my to-do list. However, in identifying this, I have prioritized my “why,” or my home life, ensuring my ability to best perform in my business ventures.
Ok super. Thank you for all of that. Let’s now shift to the main part of our discussion. Can you tell us a story about how you were able to build a business from scratch, scale and sell it to a bigger firm?
The journey from building a business from scratch, scaling it and selling it was one that I experienced with many pitfalls and mistakes. I will point to the printing, design and marketing business for the sake of consistency. Initially when building the business, one of our biggest errors was not hiring the right people fast enough and not paying the employees we had on the team fairly. This mistake quickly turned into a lesson as we began investing in talented individuals and giving them what they needed to be successful at the company. Another growing pain was trying to understand systems and processes in a way that allowed for sustainable growth, which came with regularly observing our cash conversion cycle (which I did weekly) to accurately measure our performance. By doing this, I managed to organize and understand our metrics, so I knew when we were growing or when we were challenged.
The next piece was establishing predictable sales and marketing strategies, which was extremely important but equally as difficult. The people in these roles had to really work to ensure we were bringing in orders to fulfill. We also learned that we had to shift some of our products and come up with new, inventive ways to deliver products to set ourselves apart from the competition within the industry. In order to do this, we said goodbye to certain revenue streams in order to better understand our niche and serve our core customer.
By identifying our customer base, improving our processes and building a culture, our business grew and attracted a buyer who was interested in purchasing the company.
Shifting to what I currently do for work, my business partners and I often come into companies who are looking to us to help them exit. By “exit,” I mean reaching their target financial goal, or a set number that they identified as their exit number, for example let’s say $10 million, to move on from the company. But, their current business is worth much less, say $3 million. We help them bridge that gap between $3 million and $10 million, enabling them to achieve their goal, or desired exit number, when leaving the business. Once we nail down a number, the next thing we do is help companies identify their buyer. Whether it is private equity, ESOP, a strategic partner — which are all different folks who analyze numbers differently — we have to know this as each requires different ways to build the company toward an exit. So, our primary focus is guiding a company through the process beginning with the end-goal in mind. From there, we often look to the seven stages of entrepreneurial growth to ensure the company is aligned in the same stage in every aspect of their business. By doing this, we can ensure consistent growth to bridge the financial gap from where they are to where they need to be to exit the business.
Based on your experience, can you share with our readers the “Five Things You Need To Know If You Want To Build, Scale and Prepare Your Business For a Lucrative Exit”? Please give a story or example for each.
1 . Have Clarity in the Bigger Vision
When exiting, every business should have a freedom number protocol, meaning they know the exact number they need to achieve to exit the business. Having a clear image in mind is the guiding principle to navigate the journey to successfully exiting a business.
Oftentimes, I will sit with our clients who are wanting to exit their business, and they’ll have a number in mind of what they think they need to retire, which may seem attainable with the company they have built, but it is in fact different from the actual number necessary. And while at times this may seem disappointing, identifying the exact end goal is the driving force behind our efforts, and the key to our success.
2 . Know Your Target Consumer
In order to build and scale your company, it is crucial, but often underrated, to fully understand your core customer, which is directly associated with identifying your niche. When you understand specifically who you’re selling to — their demographics, psychographics, buying patterns — it makes it so much easier to sell because you are able to customize your systems and processes to deliver, and deliver well, to these types of customers.
We recently went through an exercise with a current client and created a core customer for them, and you could see the light bulbs going off for everyone in the room. They actually identified their ideal customer and it was incredible to watch. This simple strategy is what makes the difference of the company doubling, or tripling in size and making nearly four-times the profit over the next year and a half — and they’ll do it with ease all while having more fun.
3 . Understand Your Numbers
I can’t tell you how many people I’ve come across who don’t fully understand their financials, or can’t even correctly read them. Not understanding your cash cycle, how cash flows through your organization, will be detrimental to your business. Take the time to understand the numbers that are keeping the lights on in your office.
My business partner shares this story in which he became broke. In his previous company, they were busy fulfilling and selling, and it was going well. However, the challenge was that even though they were making money it seemed, there was no cash in the bank. This means that their cycle of $1, that goes out, wasn’t coming back fast enough to refill the account. Through this process, they grew broke, they ran out of money, and had to pull money to put inside of the company to keep it going, which was incredibly stressful. He eventually had a successful exit, but he had to go through the pain of not managing the cash cycle well.
4 . Invest in Good Quality People
We’ve talked about it already, but starting a company is expensive, and sometimes cutting corners seems appealing. However, your employees are a category in which you cannot be cheap. When you invest in talented individuals, they not only take a lot off your plate, but ensure the future of your business. What they do in the long run is well worth the initial investment.
I have a customer who had over 250 employees at one point, but the leadership they had in place was not fit for the responsibility. They needed someone that was more professional and qualified to refine the business processes and grow the company, however, they weren’t willing to pay the price. However, recently, they decided to make the change and brought in a new CFO, and since, the company has been growing exponentially.
5 . Remember That It’s More Than Business
Both of the quotes I shared are at the center of this strategy. Understanding that we can’t be all business — we have to spend time focusing on our health, our loved ones, our spirituality, our passions. When we prioritize this time for ourselves, we come to work recharged and ready to contribute to the growth of the business.
We hear a lot about how people will retire and develop a certain physical or mental condition that is related to the fact that they are no longer working. Simply because they don’t feel that they have a purpose, or anything to keep them going. This unfortunately happens all the time because of the emphasis some people place on work. Work-life balance is extremely important to prioritize no matter what stage you are at with your business — whether that be building, scaling, or exiting — each one requires you to have a backbone of support and purpose aside from your job.
In your experience, is there a difference in approach for building a service-based business versus a product-based business when you have the intent to eventually sell the business? Can you explain?
From my experience, when it comes to building a business with intention to eventually sell, I don’t think that there is a huge difference between a service-based or product-based business. That being said, to this question, I’d say that I am indifferent. While both offer equal potential, what matters is how well you perform in either one. Both hold equal value as long as you maintain the right margin and understand the key strategies we discussed earlier — especially as we mentioned understanding the potential buyer of your company and what specifically they are looking for.
Whether you specialize in a service- or product-based business, the process remains similar, but systems may differ depending on delivery of the product — whether that be online or human fulfillment. For example, selling a product online differs from managing a trade company, like HVAC, in which employees are sent to clients’ homes to work on an AC unit, or in other words, to fulfill the “product.” Despite the specific processes, the overarching goal of building and selling a company requires similar strategies, but adjusting them to fit the specific needs of the business is still necessary.
How does one go about the process of finding a buyer?
There are many ways in which a company can find a buyer, and several steps to take to ensure you find the right fit for your company. Potential buyers include brokers, investment bankers, private equity firms, just to name a few. In trying to find a buyer that works for your specific company, there are a variety of ways to go about it while selling. Networking within your industry or respective business groups, or speaking with business brokers and advisers, can help you identify potential buyers and assist you in making the best decision for you and your company.
How can one decide if it is better to build a business in order to exit, or if it is better to stick around for the long term and let the company bring in residual income, or if it is better to go public?
Truthfully, the answer to this question completely depends on the goals of the owner, and where they are at in the cycle of their career. If the end goal is to exit, and they reach a point where they can take chips off the table and be done while meeting their freedom number, then exiting would be the best option.
If they are looking to stay in for a longer period of time and collect dividends, I may still recommend taking some chips off the table.
Public, however, is a whole other ball game — and right now doesn’t seem like a good time to go through with this specific method. There are some successful companies that go public and it goes well, but there are some who go public, and the value goes up but eventually crashes.
Regardless, however, this is why determining your end-goal is so important because in deciding this, these other choices will be easy to navigate.
Can you share a few ways that are used to determine a good selling price for the business?
It is important that companies know how to carry out various types of business evaluations in order to determine a good selling price for their business. Of these, is first to understand the internal financial situation of the business. By having an accurate understanding, a business leader can begin to navigate finding a good selling price. It is also important that companies have access to knowing what current sales are for their types of businesses. Knowing what is going on in the marketplace is essential to finding a realistic financial goal.
Our company carries out various types of business evaluations. We have access to different software that we use in order to provide a solid number that the respective company can turn to. We are able to analyze companies’ net profit, total sales and other factors that are considered when trying to maximize company value. We also have different systems that observe what current sales are by zip code, and the respective data for those sales.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
I would inspire people to understand their true calling and purpose for being here so that they can live their life as fulfilled as possible. In addition to this, inspiring people to be more empathetic, understanding, compassionate, non-judgemental and humble is a movement that I would be honored to lead — and one that would drastically change the face of the world.
How can our readers follow you on social media?
I am active on Facebook, LinkedIn and Instagram. Both my Facebook and LinkedIn profiles can be accessed through searching my name, Matt Blanton and my Instagram handle is @mattblanton. You can also access all three on our website at https://culturetocash.com.
Thank you so much for joining us. This was very inspirational.
About The Interviewer: Jason Hartman is the Founder and CEO of Empowered Investor. Jason has been involved in several thousand real estate transactions and has owned income properties in 11 states and 17 cities. Empowered Investor helps people achieve The American Dream of financial freedom by purchasing income property in prudent markets nationwide. Jason’s Complete Solution for Real Estate Investors™ is a comprehensive system providing real estate investors with education, research, resources and technology to deal with all areas of their income property investment needs. Through Jason’s podcasts, educational events, referrals, mentoring and software to track your investments, investors can easily locate, finance and purchase properties in these exceptional markets with confidence and peace of mind.
Starting with very little, Jason, while still in college at the age of 19, embarked on a career in real estate. While brokering properties for clients, he was investing in his own portfolio along the way. Through creativity, persistence and hard work, he earned a number of prestigious industry awards and became a young multi-millionaire. Jason purchased a California real estate brokerage firm that was later acquired by Coldwell Banker. He combined his dedication and business talents to become a successful entrepreneur, public speaker, author, and media personality. Over the years he developed his Complete Solution for Real Estate Investors™ where his innovative firm educates and assists investors in acquiring prudent investments nationwide for their portfolio. Jason’s sought after educational events, speaking engagements, and his popular “Creating Wealth Podcast” inspire and empower hundreds of thousands of people in 189 countries worldwide.
While running his successful real estate and media businesses, Jason also believes that giving back to the community plays an important role in building strong personal relationships. He established The Jason Hartman Foundation in 2005 to provide financial literacy education to young adults providing the all-important real world skills not taught in school which are the key to the financial stability and success of future generations. We’re in a global monetary crisis caused by decades of misguided policies and the cycle of financial dependence has to be broken, literacy and self-reliance are a good start. Visit JasonHartman.com for free materials and resources.
