Questions from a Business Buyer or Investor

In this week’s The Faces of Business Episode, our guest speaker was Luke Layman. Luke is the Chief Executive Officer of Vector Solutions Inc. Apart from this, he holds multiple experiences and was also a Fighter Pilot for the US Air Force.  Luke buys and invests in companies he can grow and sell.  Luke likes to partner with owners show still want to work in an grow their businesses.  

How to ask questions from a business buyer? Or more importantly, what are the questions one should ask a business buyer? This crosses one’s mind if you are thinking of selling a business and this is what we did in this episode.

In this week’s The Faces of Business Episode, our guest speaker was Luke Layman. Luke is the Chief Executive Officer of Vector Solutions Inc. Apart from this, he holds multiple experiences and was also a Fighter Pilot for the US Air Force.  Luke buys and invests in companies he can grow and sell.  Luke likes to partner with owners show still want to work in an grow their businesses.

The conversation started with Damon asking Luke about his experience post-Air Force and how he got into his business. To this Luke responded by saying that 8 out of 10 people that retire from the air force go on to fly for other airlines.

Download our free business valuation guide here to understand more about business valuations and view our business valuation FAQs to answer the most common valuation questions.

He said that not many people get into business but the ones who do, do pretty well. Moreover, he said that when he got into the business world, he saw that there are many similarities between this and what he did before.

Further into the conversation, Luke shared a few experiences from his time in the air force. After this, he talked a bit about his business. He said that an apple doesn’t fall far from the tree and hence his business is also about aeronautics.

Talking about questions from a business buyer, Luke said that there are three things important to run a business. These are sales, marketing, and finance. He says that if you master these three things, there isn’t much else you need to do.

Do you want to know if your business is ready for your exit or what you should do to prepare? Learn this and more with our business exit assessment here.

Moving on, Luke talked about the way he invests. He said that he always looks for businesses that are Amazon-proof. This means the things that we still need like taking care of lawns, dry cleaners, and stuff.

Further into the conversation, Luke shared some things about questions from a business buyer that you can ask. He said that in situations like this pandemic, there are some things that a business owner should consider. For example, do you have a contingency response plan?

Answering the questions from a business buyer, Luke said that when he looks to invest in a business, he looks into the maturity of the organization. Moreover, he said that the business should be as such that even if the CEO goes on a two weeks’ vacation, it doesn’t affect the business.

Get the most value for your business by understanding the process and preparing for the sale with information here on our Selling a Business page.

By the end of the conversation, Luke said that it’s not about what you can do in the future, but what you did in the past.

The conversation ended with Damon thanking the guest.

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Damon Pistulka, Luke Layman


Damon Pistulka  00:03

Hello, everyone, Welcome once again to the faces of business with your host, Damon Pistulka. And I’m very excited today for my guest, Luke layman. Luke, how are you doing today?


Luke Layman  00:15

I’m great. damos Great to be here. It’s sunny day in eastern North Carolina.


Damon Pistulka  00:19

There we go, you know, we actually have a blue sky day here in Seattle as well, it’s going to be about 60 degrees and just awesome. So you gotta love spring, man, you gotta love spring. I was driving around yesterday, and all the blocks that you know, here, we’re a bit behind you guys, obviously, but the cherry blossoms are out and everything is really looking pretty. So it’s, it’s, it’s a wonderful time here.


Luke Layman  00:39

That’s awesome.


Damon Pistulka  00:40

Yeah, yeah. Well, Luke, so you know, on LinkedIn and says, You’re an executive investor, mentor, but you know, you and I talked before and and what you are doing as you are helping by investing and or buying some business once in a while and doing some other things. So it’s gonna be interesting for us to talk about that a little bit later here. So if there’s business owners listening, listening, they can, you know, get some ideas from you what you see from a from a investor or buyers perspective, when you look at these businesses, and also some of the some of the things that you notice as you look at businesses a lot, because I’m sure you review a lot of businesses.

So that’ll be interesting. But before we get started on that, you’ve got an interesting background. I mean, when when you look at the typical business person, they haven’t put themselves in a fighter jet. And that’s something you’ve done for what you did for a while. And I think that’s an interesting cover, and then cover how that prepared you for business.


Luke Layman  01:46

Sir, yeah, there’s, there’s probably not a lot of them. You know, it’s interesting, if you are, if you’re a fighter guy, in the Air Force, probably eight out of 10 folks, after they retire, go on to fly airplanes, they go to the airlines or overseas or something. Then there’s, there’s like the ninth guy that gets into the business. And then there’s the 10th, that has the rich uncle, his wife is a cardiologist or something that got plays golf a lot.

So there’s very few, there’s very few folks out there that are in the business world, the the I think that the folks that do join the business world are very successful. But you know, being a fighter pilot, there’s there’s a lot of similarities between what I do in in the executive world and the way that I run businesses and high precision organizations, but the seminar similarities exist around problem solving, and how creative you can be in your communication and your leadership style. So I think there’s really a lot of the tenants that came out in aviation world and I don’t throw myself at the ground at 400 knots anymore, but that’s probably a good thing that that’s behind me.


Damon Pistulka  02:47

Yeah, yeah, that’s for sure. So, you know, just out of curiosity, so when when you’re in and I know there’s stuff that you probably can’t talk about, but tell us a couple exciting moments that you had inside of a fighter plane.


Luke Layman  03:01

Well, unfortunately, David exciting is not the word that I like to describe my career.



Yeah, I liked it. I


Luke Layman  03:07

like to have like the benign moments where I were my kickoffs equaled my landing takeoff sequel, my landings, but, you know, realistically, there’s the airplane that I flew was the a 10 warthog. So for the folks that are listening that are actually true aviation fans, they’re going to they’re going to take me to task on the fact that it’s not a fighter, it’s an attack airplane.

But But the thing about the a 10 is that it is designed only for close air support. And that is to truly in fight. So I kind of tell the story that I never picked a single fight, but I ended quite a few of them. I can actually think back to there was a train station that we flew when I was stationed down in south where we went down and we we were doing some low altitude training. And we actually ended up having a pretty low altitude one of my wingman actually did a low recovery and almost hit the ground. Now, you know, to say that that’s exciting. A little bit of an understatement. But it was, you know, it was exciting. For sure. And,



you know, there’s


Luke Layman  04:04

a lot to come back and debrief as you get through the backside of that.


Damon Pistulka  04:08

Yeah, the The 810 is a special plane for the people that don’t know what I mean, because it is made to come in and do take care of business at a low altitude and you plan on getting some some bullets shot back at you pretty much without one. That’s right.


Luke Layman  04:24

Yeah, I think sitting in a titanium bucket. That’s the whole the whole premise of it is that it’s it’s an armored airplane. And it’s designed to take face shots full of full of low caliber weapons. So I absolutely, you know, I’d say when I was flying the airplanes, it’s it’s fully safe. And frankly, for the generations that came before us that were firing in higher threat environments. I was, yeah, a much different thing than we were doing in Afghanistan. 2000.


Damon Pistulka  04:49

Yeah. Yeah. Yeah. Yeah. Well, that’s interesting. Good. And, and, you know, I can I can imagine that as you as you transitioned out out of the military, there was quite a learning or quite an adjustment to come from that to business. So what are some of the things that as you transitioned out of the military, you decided to go into business that were a bit more of a challenge than you expected for the adjustment?


Luke Layman  05:19

humility, you probably take out oversized air, you know, as you as you begin to run a small business, one of the things that I talked about a lot is in the Air Force, we had a lot of instantaneous stress, there was stolen yourself at the ground at 400 knots, and then a recovery under a hygiene environment, there was long stories, but the thing about business ownership is that their stress is pervasive and cumulative.

And that was the thing that I really wasn’t prepared for us, is what cumulative stress felt like, fast forward a few years into my Air Force, or into my civilian business ownership career, I actually recall sitting in a parking lot in the grocery store just ahead of thanksgiving and felt my left arm begin to go numb. And I’m like, this is it, you know, mid 30s, and I’m going to have a heart attack.

And so call my wife and I’m like, you know, I’m obviously something’s going on. She says, go to the emergency room. I’m a fighter pilot. So I chose not to I went to the, to the urgent care they, they ran the test. And they you know, the point of it was was anxiety. Yeah, I made it all the way to 36 years old, after having flown jets in combat, before I ever felt the physical manifestation of stress. And I really didn’t know at that point what cumulative stress even felt like,


Damon Pistulka  06:37

yeah, yeah, my time was 33 years old. And I just converted the facility to go from a normal five day a week to 24. Seven, and it was just, it was insane. We’re supporting some very, very, very large customers. And we had to run 24 seven, and it was about four months in and I did same thing. And it was to say that all of us, all of us exactly, you know, I did go the emergency room. But, but there’s like, Listen, you were the small one. You seen this before? But it is it you’re right, it is cumulative stress.

And one of the things that that I often talk with with clients is such as that our consulting clients, and even our sales clients is like, you know, business is stressful, it is stressful. And if you can’t get away from that, it will kill you. It will kill you. It will kill you slowly, by bad health habits, and overtime, or it’ll kill you quick, like you You thought, or I thought that we had from a heart attack or something like that. And I think it’s it’s very important and often overlooked, that that people in business need to have at least ways to keep their mind and their body in somewhat healthy position. Otherwise, it can go down quickly.


Luke Layman  07:54

Yeah, and if it doesn’t manifest itself, and you know, physical items, it’s the drinking or it’s the ya know, the bad marriages. There’s a lot of guys that you can ruin your life by Miss Pryor not miss prioritizing.


Damon Pistulka  08:06

Yeah, yeah. Yeah. Yeah. So my didn’t certainly didn’t think we’re talking about but it’s very relevant, because I’m sure as you see businesses, and this is one of the things that we talked about, too, when we when we’re consulting with people that want to sell their business, and they’re they’re talking about selling, it’s like, Listen, if your business is set up, so that you’re miserable in it, or you’re working so hard that you should be dead. Why would someone else want to buy into misery?


Luke Layman  08:32

I don’t want that. That’s right.


Damon Pistulka  08:34

Yeah, exactly. So it’s so suddenly do so as you’re as you’re out here now. explain a little bit about some of the fun things that you’ve been able to do in business.


Luke Layman  08:45

Well, first So first, you know, first and foremost my my bread and butter businesses and aerospace and defense company so I didn’t really stray far from the apple tree there are business and and that business is fun supporting government clients, but really is that you know, as I kind of broaden my horizon and began to look at businesses, many businesses function the exact same way and I’m a big fan for the for the readers or listeners who may be readers of the entrepreneurial operating system. You know, if you had Ray, Gina Whitman attraction, it Gino just as a great job of boiling it down to the fact that there’s only I love it. I love it.


Damon Pistulka  09:22

I didn’t I didn’t even plan that its laid


Luke Layman  09:25

out enough for me. There’s only three right? There’s only three things in a business, right? sales, marketing, operations, finance, you cannot get crazy about it. And, and folks, frankly, you know, as I look at young entrepreneurs, folks try to make it so much harder than it needs to be. They come up with these convoluted plans.

And really, if you just get good at sales and marketing, if you just get good at product delivery, and you have the ability to do accounting, then you can run a business you can do anything, frankly, you know, so yeah, so you know, there’s you ask the question about exciting is as much as motivational speaking Because that tells me I have to take a lot of action don’t motivate me, there was one that comment about progress. And that’s truly is when I can set a goal for myself and then go accomplish that goal. That’s the thing that really motivates me. It gets me out of bed these days.


Damon Pistulka  10:13

Yeah, yeah, that’s cool. It is, I tell you what it is a lot of fun in business, when you can lay out a goal and you achieve that goal. And you go, Okay, now what’s next? And, and when, when you’re able to do that, and you put the team around you that can execute on it, it is a lot of fun. And it is it does really give you a rush to be able to do that. So that’s good stuff. Cool. Well, now, as you’re out there looking around now, and in your you’re thinking about business to invest in, what are the kinds of businesses that you look at to invest in.


Luke Layman  10:48

So I’m a little bit different than a lot of investors, you know, institutional money, if you were to go to a private equity firm, or a family office, or even a venture capital, depending on the, you know, the type of business structure, I’m looking for businesses that I that I call late stage accelerators. So they’ve already had a proven framework, they the business can work, we already know that they’ve got a customer base, they’ve got good operations, good delivery, they have sound finances.

But inside the segment, specifically, I’m looking for service based businesses that are Amazon proof. If you know if you can be put out of business by an Amazon delivery truck, it’s going to make it very hard for me to do it. But a lot of the businesses that I look at are high touch, high customer focus. And I just don’t believe that those businesses are going to go away, we’re still going to need folks to take care of the lawns, we’re still going to need dry cleaners, we’re still gonna need people to cut our hair long after Amazon comes and goes.

So those are the types of businesses and I’ve got a great story of a friend of mine here that runs a beautiful landscaping business for everybody that thinks that they got to keep a 600,000 are landscaping business, I’ll tell you the story about his $9 million landscaping business is just doing incredible stuff.


Damon Pistulka  11:54

Yeah, yeah, that’s I mean, and that’s a great example of what I what I see when when we have people looking for businesses, they don’t realize that they’re all around them every day. And you look at things like, like you said, landscaping is a great one, some of these custom remodeling and some of these other ones and I’m not talking about the guy in the truck kind of remodeling, I’m talking about that Do you know millions of dollars of business a year and and they have very, very substantial businesses.

And it’s in its niche in its very high touch, they make things just like somebody wants them are doing just like they want them. And and they’re cool as heck. But they’re cool as heck, and they can and they can make a really good life and leave a good legacy. Hmm. Yeah. So when when you’re out and about doing things now, what do you see in the in the economy that are bright spots that are coming around? Since we’re kind of waking up out of this COVID fog?


Luke Layman  12:59

Well, everything’s a bright spot, you know, and unfortunately, there’s a there’s something that’s happening inside the environment right now, that I think is actually not doing anybody any service. And that is the government bailout. And that, you know, it’s not gonna be a popular sensation for folks that have taken PPP money, our businesses took PPP money. Yeah, the problem is that, that businesses grow and thrive when under duress, and it’s no different than ourselves. Right? You know, our best growth opportunities come from learning opportunities.


Damon Pistulka  13:31

Yeah, you know, you’ve


Luke Layman  13:32

got a busted knee right now, you’ll learn some things about how to how to cope with that busted knee and had to move farther. But when you think back on your life, to all the challenges that you faced in your life, the pilot training was a great example. They said that that was the shortest year of your life made up of the longest days. Well, if you were to talk to me on a Thursday afternoon, at the end of a 60 Hour Workweek going into my fifth day, yeah, you’d have had a hard time convincing me that I was learning anything other than how to bleed and you know, have a lot of pain points.

But that’s the that’s the thing in the environment that I see right now is that there’s a there’s a leveling of the playing field. What I hope doesn’t happen is I hope people don’t miss the true lessons of resiliency as business owners to be able to figure out how to shore up your finances or to tighten the belts or to hire quality talent but I think honestly, it’s a bright spot. And I think that actually now more than ever is just a great time to enter business as well as exit businesses. There’s just a lot of opportunity in the environment right now.


Damon Pistulka  14:35

Yes, yes, there I agree to because the the pent up demand alone for everything. I mean, if you look even look during COVID, right, we have we have ecommerce clients and yeah, Amazon does hurt or help them in certain instances. But that was something that was super strong all the way through. And now when you look at any look at Again, we talked a bit about the remodeling or those kind of things home improvement. I don’t know if if if you’ve been into a home improvement store for the last year, there’s nothing hardly on the shelf





Damon Pistulka  15:15

Yeah, exactly. Exactly. And it’s it’s nuts, you know, you look at the price of lumber, you look at everything else, it’s because everybody’s upgrade and everything, because they’re sitting at home, they’re looking at, oh, hey, I need, we should redo the bathroom now or the kitchen or whatever they’re doing, and they’re getting that stuff done. So there’s some of that’s been strong right along. And, and I contend and I know, this is not again, this is not a popular belief is that, you know, what we saw most of were the restaurants in the in the gyms and other things like that, that have foot traffic coming in out of it. But there are big swaths of the economy that kept right on rolling women.

Sure. And, and going right on, you know, I do a fair amount of work with manufacturing. Yeah, they had a hard time selling, but the ones that already had established customers, I can talk to five that had a hard time because they were looking for customers. And I can talk to five more that said they had to beat customers off because they, they were just they that you know how to turn them away, because they were just too many,


Luke Layman  16:16

while the manufacturer is a great sector, and you know, there is a that’s a sector that I love, right this second, that just just because COVID hit and you slow down for a year doesn’t mean that the demand went away. This is the thing about COVID. And this pandemic, that if you truly like, you can email me and tell me if you’re listening to this, did you have a contingency response plan? For a pandemic? I think we had one for a hurricane or a flood before Yeah, we got a pandemic. Yeah, this is not real.

And I know that’s going to be really contrary to people this was short. And when we look back on this in the lifecycle of businesses, this is a very short span. Yeah, this recovery is going to happen quickly. So when you go back to the manufacturing, all that those are lead items for end uses, and those things are still going to need to be consumed. They may not have gotten consumed in q4 of 2020. But if you if you were hurting as a manufacturer, in 20 2020, q3 q4, I expect you to have a booming year in q3 or q4 of 21.


Damon Pistulka  17:25

Yeah, Yeah, I would agree. There’s there There seems like the you know, all the indicators are there and people that that, like I said, that have that are doing a good job writing got solid customer base, it’s just getting bigger. It’s getting bigger. So there’s some interesting stuff happening there. So that’s good. The so when you’re out and about and you’re looking to invest in a business, what are some of the key things that you look at?


Luke Layman  17:52

Well, first of all, is the maturity of the organization. So it you know, I think you kind of alluded to it either on air or off air, here’s, I do not value a business that the CEO is irreplaceable, that matter of fact that the higher value of the business is if that guy or gal can go take two weeks of vacation, and the business is underwritten on uninterrupted to beautiful business, I love it. So that’s kind of the first and foremost is I look all the way at the top, but that is actually reflective of the culture of the organization, that so you know, one of the things that I look at, it’s something that that a private equity firm may not go look at is I want to sit down with your family.

I want to find out the relationship that you have with your spouse, I want to find out how you treat your children. I want to find out if your present, being I want to find out if you’re peaceful, are you engaging, because that’s going to tell me a lot about the way that you engage your employees. So don’t be surprised when I asked if you come to dinner, bring your family this is not a no, we’re not going to go have three whiskies you’re gonna bring your family, at least for one of the meetings here so that we can take a look at that. But for me, I’m also not looking for folks that are looking to exit with their bag full of cash and go retire to the Caribbean.

I’m looking for high growth companies. So folks that are growing greater than 30% year on year. I know that that kind of curtails a little bit. But one of the things Damon that I see on a lot and and I don’t think this is bad for lifestyle businesses, if you get to the place that you’ve built the business,

you have the income that you want, leave it it’s it’s a beautiful business, take more vacation, have more impact, spend more time your kids, but I’m looking specifically for businesses that if it’s a $2 million gross revenue, that we can turn into five or five turn into 10 I want to take that thing on a rocket ship and I truly do believe that the majority of the impediments that we put on our our businesses are only the impediments that we put on ourselves that are reflected in the business.


Damon Pistulka  19:52

Yeah. So this is a good point. Most people when you start talking about growth, like like if say So first of all, when you when you look at your investment horizon, how long do you typically when you go from two to five or five to 10? How long would you think that would be? Is that over five years? Three years? 10 years?


Luke Layman  20:13

What are you up to? 24 months?


Damon Pistulka  20:15

Yeah, yeah, so you’re gonna do that in 24 months. So when I’m looking at my business, and this is, this is what I really, I really like to get into with people, because that business owner that’s sitting there with a $5 million revenue business, say they’re making a million bucks a year off that now, and that’s a 10 million in revenue, that’s not going to be $2 million in revenue. And they even, or whatever you want to call it, the measure you’re doing, you’re probably going to be closer to three, and your multiples going to go up.

So it’s it’s that the multiple that you value, your business is what I’m what I’m referring to there for the people that may not know. So my, if my business is worth five times my 1 million, when I start, it’s probably going to be worth 12 15 million when I get to the second level there. And and everybody wins more when you do that. So it’s one of the things that we do a lot with, with with our clients, different industries, obviously, but it’s it but it is the same.

And when you don’t really think about that, as you’re looking at scaling opportunities is what the value and the end goal is, as much I believe when it’s when it’s a private owner that is running a lifestyle business and not concerned about legacy as much. Yeah, but I’m so you’re going in and you’re doing this, and you touched on something about the impediments to growth. And you touched on something that is really a hot topic in my mind. And that is self imposed impediments. Sir. So what are some of those things that you see that when you’re out and about that, or in the companies that you’re helping the self imposed impediments?


Luke Layman  22:02

I’ve heard a lot of things out of business owners, like my industry doesn’t support it. And that, you know, if you’re thinking about multiple locations, or without localities, or bottom line, you know, if you’re pushing three, four, or 5%, and I say, I want you to do 10%, you go, my industry doesn’t support it. There’s a lot of misconceptions. And what I ask is just simply how do you know that? Did you go to the book on local business growth and say that, you know, local business growth is limited to 30% year on year, and you can only do 6%? In a, you know, real estate office or whatever it is? And it’s like, No, you don’t know that to be true.

Not saying that is untrue. But the majority of it is actually not the environment telling you. It’s the belief that we have around it. And then the story that we’re telling ourselves about the belief that when the kid began to pull those onions, the layers of the onion back you go, that’s just not true. So So two things for people that are looking to exit their business.

Number one, is if if you believe that your business is limited in its growth potential, and I don’t believe that your business is limited in its growth potential, you are going to get less money out of the transaction. That’s it. Because if you can’t, and that’s what I mean, we’ll kind of get into some, some challenges facing it. But if you can’t see the growth plan, and I can, then it’s going to be my job to take that business on the growth trajectory, and I expect a higher return on my investment.


Damon Pistulka  23:34

Yeah. Yeah, that’s a great point. Because as we are we’re helping our clients in the consulting and preparing their business for sale, one of the things that we do is we, we, a articulate B helped them to start executing on the growth plan. And see, we make sure that that growth plan is if you’re not all the way down the end of that growth plan, and you know what? growth? You know, we’re on Plan A, but we know what Plan B is going to be.


Luke Layman  24:02

That’s so important. Dame NC,


Damon Pistulka  24:05

let’s go ahead. Yeah, sorry.


Luke Layman  24:06

Sorry to cut you off there. I just I just couldn’t agree with you more. That is absolutely so spot on is that I see these businesses and that, you know, people you know, when they recast your financials, that’s, that’s one of my favorite took out all these owner compensations. It’s like, well, I hear you that you took your own owners compensation out because you had your executive retreat. And, you know, for us, it’s Wilmington, North Carolina, that your wife’s taho was on there. I hear you doing all those things.

Yeah. But I also have to go pay the person that’s going to come take your spot, right. So yeah, so you know, when I look at these finances, like, okay, we were, we were 3,000,003 and a half million 4,000,004 and a half million, 5 million, but next year, we’re going to be $9 million. And it’s like, I don’t believe you. I don’t believe you because you showed me that you can do 10% growth year on year. And now you’re going to tell me that you’re going to do 150% growth. So show me why this And maybe it is right you have windfall contracts, you open the location, there’s there’s certainly some things, but I couldn’t agree with you more is.

So show me a we’re in. We’re in year six of our 10 year plan. We’ve hit 78% of the markers along the way. And we have every reasonable expectation that we’re going to hit on the remainder of 78%. of the markers. Yeah. And you okay, if so, so part of the telling of the story, and I got me on to get me on a tear here, part of telling the story about your business is not what your business can do in the future. It’s what you did in the past. And then what more resources are going to do to only accelerate when I put that fuel on the fire? What are those more resources is going to do to make us grow together?


Damon Pistulka  25:46

Yeah, yeah, exactly. And that’s one of the things that it’s it’s funny that you take off on that, like, because it’s one of the one of the things that well, I it’s, it’s one of my sticking points, one of my emphasis points with people. And it and it drives me absolutely batty. When when I see somebody and I just thought last week, we had a potential client sent me three pages of potential potential things that’s going to happen, potential things you’ve got happen. How much have you paid for potential? When it’s not partially realized?


Luke Layman  26:20

No, you, you, you the seller pays for potential,


Damon Pistulka  26:23



Luke Layman  26:24

your purchase price, because I’m not gonna invest in hopes and dreams and prayers, right? I can’t fill up a bucket with with those things. So unfortunately, for you that all that’s going to do is that’s going to create doubt in our plan. And that’s going to lead to a lower number for you.


Damon Pistulka  26:40

Yeah, yeah. And by the way, everyone, that way, we never even talked about this before we got out. But it’s so it’s so uncanny that, but it happens all the time. I mean, because I hear this, and I’ve seen this as a business owner, you look at and you go, man, there’s potential, there’s potential or potential. But when you look at your business, and the way that a business buyer looks at it, if that potential is not laid down in a plan set out in goals, and you’re not marching towards them, and make an incremental progress, that someone can go back and see that I said, I was going to get to 100. And I’ve made it to 30. And I’m on my way to 40.

Now, just like I said, that that’s the only way that you can you can get someone to realize or believe that you are going to hit 100. Otherwise, just pulling it out and writing it down. means nothing.


Luke Layman  27:30

I chuckle a little bit, I was in a forum the other day, and they somebody, we were talking about strategic plans. And someone said, My group of mentors and CEOs don’t believe in strategic plans and like what? So, you know, I had to do a little fact check, right? We talked about beliefs. It’s like because I believe that a strategic plan. So when I grew up, so when you look at mine, so there’s a inverted pyramid is how I do it. At the top of it is the Decennial plan, what do I hope to occur in 10 years, and then we break that down into the year and we break that down to the quarter. And then we get to actions and milestones, KPIs, right, so we break those things up with, you know, okrs, or KPIs.

But there’s, there’s specific metrics. So for us it when somebody says, I don’t believe in a strategic plan, I’m like, What? It just makes me chuckle. No, no, you know, early on, I went to score, right. And I, you know, I think it’s a great organization. But you get what you pay for? Yeah. So if you want a template business plan that somebody has collected out of a textbook, and they go, all you need to do is get these 30 pages to figure out I’m like, No, okay, that I get it, that that is not a strategic plan.

That’s a business plan that maybe you’re trying to go get a bank to give you some loans or something like that. That makes sense. But absolutely, I want to see where you are on your 10 year plan. But I also want to see what happened three years ago on your 10 year plan. And then I want to see how you adjusted your 10 year plan based on the metrics that you were achieving along the way. Yeah, and it’s just not that hard to create that you can literally create these things in a day or two and put yourself on the way.


Damon Pistulka  29:11

Yeah, yeah, well, it’s in virtually every business we go into. And we talk to you we go, Okay, what is your What is your budget for this year? What have you laid out? What are your projections? What are you doing? And they go, Well, we didn’t do it and I are talking $100,000 business, I’m talking $40 million business $50 million business and it’s because the owners, when you start a business and you grow it that big because we do work with a lot of people like that they started from nothing and it’s decent size now, right?

They never did it then and they’re comfortable running that big old business out of their checkbook almost at the size of this today. But that’s fine for them. But when you start to go out and try to do anything with it, beyond that, even investment cash capital or selling anything else, it all changes because of just exactly what you said. And it’s not hard. It’s it’s take what you did last year and put a factor on if


Luke Layman  30:12

you multiply by 1.3.


Damon Pistulka  30:15

seasonality and it all works out, it’s simple enough and break it down into weekly stuff that your people can understand that I’m supposed to do this on a weekly basis and start measuring it. I mean, it’s not hard. And it does so much for you. Because the other thing, let’s talk about this a little bit, and I’m sure you’re gonna see this in these businesses is that if you don’t lay out goals, people don’t know what the hell they’re supposed to do. Or if they’re doing a good job. That’s right.


Luke Layman  30:45

That’s right. Yeah, there’s a there’s an analogy, or a saying, I don’t know who to attribute it to. I’m gonna write this down. Maybe you’ll send me an email and tell me that I heard you know, a few chatons say this many years ago, when I was a senior in college, he said, it’s not his quote, a leader is one who knows the way it shows the way it goes way. And I don’t know who set it up. I’ll Google it and figure it out here in a minute. But when you look at that quote, is that you know, a leader is one who knows the way shows the way and goes away? So no, we’re not talking about leadership. Yeah, but but how do we, if I’m going to take my business?

So one of my core mantras is what got us here won’t get us there? Yeah, if you’re running your $40 million business, the way that you ran your 4 million, or your $400,000 business, you know, it’s hard, it’s hard to tell people, right, if somebody goes out and do it the same way, and I grew up to $40 million, you will hit a threshold, the thing that I would challenge that person to get to that $40 million business is,

what did you change along the way, you know, the way that you you’re probably ISO 9001 certified, or you know, whatever it is, in the industry, 4000 series, you probably went, you have some finance processes, you actually have the ability to collect receivables and make payables happen. So you obviously did something.

But it’s I don’t know why, you know, David, it’s like, it’s like, folks get to the point in October, and they’re like, you know, for folks on a, you know, December, fiscal year, and they go, Ah, I just don’t really have the time to go put two or three or five days into, you know, into strategic off site. And I’m looking at him, I’m like, well just pay it. Just go to Damon and just have David come in your business and go look at a couple of managers deliver it back to me. And then guess what, I’ve got a strategic plan. Also, we can start


Damon Pistulka  32:29

marching forward? Well, it is it is interesting, because you’re right in, and it’s something that you don’t necessarily need to do, because a lot of it is a lot of it is number crunching, a lot of it is asking questions that an outside person can can do for you. And then you can refine it so that two to five days that you look at can really be a long afternoon, or two, and then another long afternoon or two to deliver it to your team and revise and do whatever else you need to do. And then you’re then you then you sit down in January, with your team on on your first weekly performance meeting or whatever you want to do on your your second Monday of the month and go How did we do?

We said we’re gonna do this, how did we do? And and the thing that that is just eye opening for me, when I’m setting in those meetings for the first time, and people look at that and they go, you look around the room, and it might have five or six managers in that room. They all know, if their departments there, whatever they’re responsible for, did we do it or not? Because we’ve got a few numbers, we don’t have 100 numbers we’re looking at, we’re looking at a handful of numbers.

But my customer service person knows that, hey, we we did this, my, you know my operations person that wherever it is, they know they did what they should do, if they’re if they’re, if we’ve set this up, right? We’ve set up the numbers. And then the beauty part about this whole thing is you don’t go to the end of the month and wonder did we make the money or not that we should have? Did we grow like we should have? Well, you know, every week if we hit the if we hit the sales goals, we hit the profitability goals, and we hit the we deliver like are supposed to the customer, whatever else you might check on. Those financials are going to turn out pretty damn close at the end of the month.


Luke Layman  34:23

Yeah, there’s something that’s just I was taking notes as you were talking there. accountability is something that went over I know, we’re not talking leadership and this discussion. So that said, Well, you know, we’ll we won’t get too far into it, but people thrive when held accountable. Yeah, love when leaders are accountable. Yeah. And, you know, I don’t have to be self deprecating in my communication and say, Hey, I know that you know, the business is arrived because I did something wrong or something.

But if there’s two key mistakes that I see leaders making, number one, well, first and foremost, they don’t have KPIs If you are in any size business over seven figures, and you do not have key performance indicators, you are doing it wrong. If you’re looking to figure out what happened in the last quarter, you’re doing it wrong. But but most folks have bad KPIs. When they look at their KPIs, they tie them all to financial metrics. And those are important. Sure, but but financials really tell the story historically.

Yeah. What the, what most businesses need to do is they need to know about customer satisfaction. So if we go back to the marketing world, we could look at the lifetime value of the customer is your lifetime value of the customer only stays lifetime if they stay your customer. So you better have a KPI that supports having the lifetime of that customer or you’re gonna shorten that number up pretty quick. Yeah, the other giant. So that’s the first one people. First and foremost, if you don’t have KPIs, spend an afternoon. And just as an aside, I’ll come back to the real point in a second. consultants, coaches and peer networks is you know, I use them all the time, consultants come in and fix a specific problem.

Coaches come in and fix my problem. And appear networks are the one that helps me to rise the tide and float all the boats, right, we don’t have to have any lows or losers in this thing. So consultants, coaches and peer networks, I digress a little bit KPIs Mistake number one, and then folks don’t operate on the correct interval. We did just because the IRS says that we have to record our taxes on a one year basis does not mean we have to run our businesses on a one year basis, we could run it out, we could pick and measure it a week or two weeks.

But I do split this process 12 weeks, one quarter, there’s four of them in a year, I look at all the business components on 12 week cycles, because that’s when I can put the big so go back to the aviation speak. That’s what I could put the big rudder steer back in the business and go, Hey, we actually have something that we need to refine and something that needs attention, because it’s not working correctly. Yeah,


Damon Pistulka  37:09

yeah, give it long enough so that you can test you can make, see if it’s gonna work or not, and get it and then you make the changes. That’s a, that’s a great thing to think about is just how long do you How long do you do something before you start making changes, because oftentimes, you find business owners either they want to wait way too long, or they want to make it they don’t see a change is two hours, we haven’t seen a change, we better change it again,


Luke Layman  37:34

employees can hang with that. Right? You know, every week they come in, and the boss has a new idea that that that will work either.


Damon Pistulka  37:41

Yeah, yeah. Yeah, Good stuff, good stuff. Well, when when you’re in, in these businesses, and we it goes back to this again, you talk about the owners and and things and we’re gonna bring up the C word. And that’s culture. And when you when you start to look at these, what are some of the things that you see that are really good? In the in these businesses, when you see some of the culture? And what are some of the things that you see are just really detrimental, that they might not even that the owners may not even see themselves?


Luke Layman  38:19

Well, first, first and foremost, I look at what’s written. So before I even go look at a business, I’m going to go to the website, I’m going to find out what they say about themselves. So, you know, I like to develop a vision, mission and culture statement, and the vision is all the way into the forever.

And I’ve actually done a lot of research on this. And I know a lot of people have differing opinions about how to write vision, mission culture statements, where are we going? Who do we serve? And how do we treat our people, vision, mission and culture. And I want to see what you say about your company. And then I want to ask what your frontline leaders say about your company, you know, so how often do you check in with them and ask them what the culture of the company is.

So for me, I value communication and issue and accountability. The cost of admission for me is integrity. You know, if you if you can’t have integrity, I don’t have any business doing business with you. We can we can make 1000 legal documents, but if I can’t shake your hand and trust that you know, or that you’re going to do what you say that you’re going to do. We don’t even need to try this thing.

But communication initiative and accountability and then I want to see what’s reflected in the organization. And I don’t care what your words are, right? That you know, any any number of words can work. There were they are a reflection of you. But like, you know, good one that I love to see is charity. Well, when you say charity, if you are a company, not c three, just a company that values charity.

Is that reflected in the way that you treat your employees writing a writing a $10,000 check Check to a cancer society, which I absolutely encourage everyone do writing a $10,000 check. If you value charity is not the same as an extended lead leave policy for, you know, a mother on maternity leave is has, you know, some need some time to their children. It’s not, you know, a couple of extra days off for here. So I see these these complete breakdowns, he’s in congruences in environments where people are not there, they’re saying one thing, and it’s not actually reflected in the way that they lead their businesses. Hmm.


Damon Pistulka  40:36

Yeah. Yeah, I know that you do see that. And you see that too, when people say how they’re part of the community, and you go, Okay, show me how, and you see, no community involvement. You don’t see that they, you know, give their employees paid time to go work at that it whatever Boys and Girls Club down, just take it, take it, do whatever, fix up a park, whatever it is, and, and it’s a great a great example of that, and how your, your, you know, are you walking the walk or walking the talk? Excuse me, walking the talk,


Luke Layman  41:10

there we go. One of the and Damon will go just a little bit deeper here. One of the things that one of the big breakdowns I see in CEOs is they say they value profit, and wealth, or they don’t. And but here’s what I generally see, when you say to see, do you value wealth, then they go? Yeah, but it’s not active anywhere in their life. You know, when you go out to a dinner, and they tip poorly. And it’s like you’re hoarding the money. Yeah, that’s not what you know what a consultant comes in, you’re like, I’m not going to pay a consultant, I’m going to power through this thing myself. I’m going to hire an entry level employee, because it’s going to save me money.

No, that’s not well, that’s scarcity. Yeah. And that that income grew unsee. And this is what you know, for me is what I look for in businesses, I look for myself, I can point to places where I’ve done it myself, your business is only a reflection of you. So I say that I value my family. But But if I if I work 50 hours a week, 6070 hours a week, that’s not really congruent with my values of family, and then also how I also afford time for my members of my organizations to spend time with their family. Yeah, so there’s really big incongruencies that I see in organizations along the way.


Damon Pistulka  42:38

Yeah, yeah, that’s a great example, too. It is. I mean, it’s, it’s hard. I mean, it’s, it’s hard to run a business. And I totally appreciate the difficulty in that. Having done it for many years, and continue to do it in the different aspects. But it’s, it’s not hard, or it’s not easy. And it’s don’t want to lighten that in any way, shape, or form. It’s just that the demands on businesses as you get larger, get more, and your your breadth of knowledge and the things that you need to be doing and those businesses, and I don’t mean technical because, you know, when you look at businesses, that’s that’s why people generally get into business because they’re technically good at something. And that doesn’t prepare you at all to run a business.


Luke Layman  43:31

Yeah, I kind of chuckle again, I you know, when you say it’s hard to run a business. Sure, it’s hard, you know, and it’s like, What’s so this goes back to the identity and beliefs and stories. What why specifically, if I’m talking to a business owner, I’m gonna say, I’ve got a great friend, that’s that’s running a beautiful hospitality business, downtown Raleigh, and it’s, but by all measures, it’s hard. They suffered from a fire a couple of years ago, they get a lot, a lot of hard.

But when I when I look at a business owner, and I go, what specifically about your business is hard, and managing people, employee retention, what specifically about employee retention is hard. And then when we begin to pull those layers back, it’s you know, it’s the questions of five why’s, by the way, nobody ever asked the question of why if you want to alienate people, you ask the question, why, but what about this? How does this affect you? What does it mean for you? If it does happen?

What does it mean for you, if it doesn’t happen, it’s like a little marriage counselor for business owners right here as therapists, business owners, but you know, the story that we tell ourselves and I will tell you that, you know, I operated from this position of scarcity for many years, for the idea that business needed to be hard and what that meant for me, the story that I was telling myself, was that I needed to be always on and always responsible, and I prided myself. Let’s see if I can show it to you about it won’t but emails, 42 emails on here, I’ll see if they’ll pop up there. I used to go to bed with zero emails, like it was some badge of honor.

And I would do you know, it’s like Who told you that that zero on your inbox, and I would wake up at six the next morning? Like, what does that mean? So, you know, when we come back to it, why don’t you pick the story that serves you as a business owner, if it’s going to be hard, let it be hard doing the thing that serves you. It doesn’t need to be hard that your employees won’t come to be work, come to work, it needs to be hard that you teach coach, mentor, recruit and challenge employees to grow and enable you on your dream. Right. So you know, just choose your heart, you pick what you want to do.


Damon Pistulka  45:40

It is that’s a great point. And I don’t mean it is hard, like, gonna be you down hard. I mean, it hard I can challenging that makes you better. That’s, that’s what I think it is. And it’s, and it is, it is that that, you know, I honestly think that running businesses is simple. Right? In the whole scheme of things. It’s simple. The hardest point, I believe in running a business is just being the most challenging. I quit using the word hard. The most challenging thing is, am I working on the right things right now? Bingo.

That’s it. I mean, when you look at it, and you go, okay, what’s what? And? And who’s doing what, because you go back again, attractions? Like, should I really do this or not? And am I working on the right things? And and you get those two things, right. And everything else becomes a lot less difficult to get done. And and I think it is, but interesting, interesting sidebar, we’re getting to this, I could go on forever like this, because I’d say the the when you talk about the beliefs and what people think, when you start to uncover the or peel the layers back on the onion, like you said, there, there are really, it is inside of us, that limits us in most of these things.

And, you know, it’s it’s someone was telling me about this the other day, and it’s been long enough now we almost forgot about it. Starbucks went into a business, into an industry that everybody thought that you should pay a quarter or whatever the heck it was for a cup of coffee. And that was just a little side drink when you had had a meal or something. And now look at it today in his coffee is coffee.

It’s coffee, you know, and look at it now. They just looked at it differently. And they put it together and back then some of you someone who said, Well, you can’t make any money in coffee. That’s right, corner, a cup, or whatever it is. And you also as you were talking to some of the my industry Most importantly, you don’t know that because maybe you’re not looking at it. Right. And it is interesting that so Oh, man, good to



hear now. Right? So we


Damon Pistulka  47:50

got my brain going. And I’m like, okay, where do we go next? But let me let me ask you the question. So what what happened? I asked you, I should be asking you?


Luke Layman  47:59

Well, you know, we got really deep into it. Damon, I love these. I love these conversations. You know, when I think about business ownership, and I just want to kind of reflect back and I don’t have anything to add here I we could go on all night is business can be easy. It’s Matter of fact, it should be easy. And and when we look at it, we, as business owners get so mired down in the day to day tasks. And I’ll just I’ll interrupt myself for one second, I’ll give you a give the listeners one thing.

When I think about the tasks, I don’t have my book here, I only aim to accomplish three things in one day. And the reason I know what three things are, is because I’m intentional. Every morning that I look, I do a sweep of all the things that need to be done. And I pick the three highest value activities. And those are the only things that I set out to do until those things are done. But the three questions that I asked myself, am I the only one that can do the task? If no, it doesn’t mean that I’m not going to do it.

It just means that I know that it’s not the highest value. The second question is if I do this task, is it going to generate near term revenue in the next three to six months? And the third question I asked for myself is if I do this task, is it going to add long term strategic value to the company in the next 12 to 36 months? And if as the business owner, you cannot answer one of those questions in a yes, you’re probably doing the wrong thing. And I know that we all have to do things right. There’s a lot of value in taking the trash out metaphorically and physically.

But you know what, I would just kind of encourage business owners and what we didn’t really get into is how do you prepare yourself for the exit. I just want folks to think about one thing. You are going to exit your business The end of the analogy all the time, right? Whether it’s feet first, or your walk yourself out the front door, you are going to exit your business, the time to plan for exiting your businesses today, I don’t care whether or not you want to exit it, I’m actually looking at a business right now manufacturing business and they are not ready for exit 66 and 67 years old a business and it’s like you’re too late, it’s you can’t affect the changes you needed to be 10 years ago.

So no matter where you are in your business lifecycle, prepare for the exit. And the exit can be very simply this, I reached the portion of the business that gives me full sustainment, it gives me all the energy that I need, it provides me the finances that I want, and I want to work less in it. That’s an exit, that is a way to exit your business. And exit does not have to mean a bag full of cash delivered to your Caribbean vacation home. So yeah, those are just a couple of closing thoughts. Lots of great, we could go on daymond all night. But you know, I certainly appreciate the opportunity to talk with your listeners today.


Damon Pistulka  51:03

Yeah, you know, and one thing to add on that it’s funny, it’s funny, you bring that up, and and we do as we help help people prepare for exits, and some of our clients are 10 years away, right there, and we’re helping them with their businesses. But one of the things that we often do that i’m sure you see a lot is we we we stress, spreading out your investments. And because we often see that, you know, 90% of someone’s wealth is tied up in their business.

And if you start that early, and you say, Listen, you made a million dollars this year, why are you just leaving it set in your business, take $200,000 of that, and go do something else with it, put in the market, put it in property, put it I don’t care, go buy cars that will appreciate it doesn’t matter. But take it out of the business. And and just keep doing that and keep that you know, spread out your investments.

Because if you do that over time, it gives you flexibility and gives you options. And just like you know, most people don’t realize that if you start planning tax consequences if you’re going to walk with a big pile of cash tax consequences, if you start five plus years at a time, you can save millions of dollars in taxes. Millions, not 10s of 1000s. Not not 200,000. But millions and and it’s well worth it to start thinking about that suffer. But we as humans, we don’t like to think about the end in that situation. But anyway, why do you


Luke Layman  52:36

think that’s so important there and I’ll just kind of leave with one closing thought there for my Airforce days as a young lieutenant, the Air Force was going through a restructuring where we needed to start flying unmanned airplanes. And as you can imagine, for a young fighter pilot, the concept of sitting in a six by six booth in Las Vegas was none too appealing. But I had done the math on it. And I figured out that based on my age, and my time in the airplane that I was a right candidate. And what they they they told you was if you volunteer now, we’ll send you to this other airplane down in Florida. And it was a smaller single engine thing.

And my I talked to my squadron commander about it. He said, you know, probably a good idea, Luke for you to volunteer for that. And I went into the bar that afternoon, Friday afternoon at Pope Air Force Base northcom. And I sat down with a guy named Greg being a bingo. And bingo said I’m gonna give you one piece of advice, Luke. He said never exchange a bad deal today for a good deal tomorrow.

And I see business owners all the time, postponing future opportunities for enjoyment or success in exchange for a bad deal today. They’re like, I’ll just work a 70 hour work week or I’ll forego my vacation because I’m a little wait until you wait to wait till I retired a few years and you know, I just couldn’t agree with you more daymond it’s like you know, be diligent be specific about the way that you’re running your business and and be you know, be cognizant, mindful and challenge the ways that you think about it.


Damon Pistulka  54:10

Yeah, yeah. Great stuff live. Well, awesome conversation man. I just so it’s so blessed that you that you stopped by today and were able to to explain, you know, some of the things you see some of your opinions it was it was great just learning from you. So if people want to reach out to you, Luke, or you’re trying to get a hold of you, what’s the best way to do that? Yeah, I’m


Luke Layman  54:34

easy. Luke Lehmann Comm. You can find me there’s contact information on there. I answer all the emails personally to Luke at Luke Lehman calm if you want to ask questions, maybe a little bit slower to respond. I’m open on all the social media channels as well. So I’m good.


Damon Pistulka  54:48

Good, good. So And one last thing before we go you you had mentioned the kind of businesses that you’re investing in and let’s just say that one more time, so so people can hear that if they


Luke Layman  54:58

Yeah, so generally, the characteristics service based businesses. So service local based businesses. Positive EBIT are usually in the one to $10 million range is what I’m looking


Damon Pistulka  55:07

for. Okay, real good. Well look awesome. Thanks again for joining us. Thanks everyone for listening on LinkedIn live. And if you didn’t hear if you want to listen to this again, you can listen to it on our blog. It’ll be up in a week or so. Or you can listen our podcast we’re on data, no 1415 different channels so you can get us there. Thanks so much, everyone. Thanks, Luke. And we will be back soon.

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