Ashley Altum is the CEO of Profit Matters as well as a leader and serial entrepreneur who has dedicated her life to helping small business owners scale their companies through a financial lens centered around rules, processes, and automation.  Her number one strength is discipline making her both routine and structured.  Ashley holds a Master's Degree in Business and a Texas Certified Public Accounting (CPA) license.  She has experienced two successful exits from manufacturing and construction businesses. From a small agricultural country town to the big Dallas city, Ashley is on a mission to scale Profit Matters to the largest bookkeeping firm in America by making accurate financial statements at an affordable cost accessible to every single business owner.

Mike and Ashley discuss how she went from a multi-million dollar exit to nearly bankrupt in only 18 months.

Ashley shares the story about her decision to get into an industry she knew nothing about and the lessons she learned while building a company in an extremely competitive market.

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Mike: [00:00:00] Hey everybody. This is in the trenches with Michael King where we talk with business owners, leaders, and executives about the lessons they've learned while fighting in the trenches of the business battlefield. I am Michael King and I am super excited to bring you this conversation today because we're talking about two of my favorite things in business.

[00:00:18] We're going to touch on the importance of cashflows, and we're going to talk a little bit about leadership and particularly about. Difficult conversations. So, one of the things that I find really interesting in business is when somebody approaches me with an idea they have for a startup or for investing in a business or a just outright buying a business and they don't have any experience in that particular industry.

[00:00:46] And there's a lot of challenges that come along with getting into a business that really, you don't know. Anything about, you don't have any experience to benchmark what's going right or what's going wrong against, you don't know a lot of the lookouts, and that's not to say that it's impossible to get into a new industry or to invest in an industry that you're not familiar with.

[00:01:06] Business is hard enough as it is. But when you go into an industry, you don't know anything about, it takes just another level of care and attention and deliberateness that you need above and beyond going into a business that you are super familiar with. So today I'm talking with Ashley Altum. She's the CEO of profit matters, and Ashley has a really interesting story.

[00:01:28] Ashley had a successful exit from a manufacturing company.  where she, she cast out for a significant amount of money and Ashley decided to take the proceeds from that cash out and purchase a company in a completely different industry. So, she went from manufacturing to concrete. And,  Ashley's going to tell us the story about how she almost went bankrupt in that 18-month period following the purchase of the company.

[00:01:57] The other thing that I'm going to talk about with Ashley is difficult conversations. And I don't think anybody particularly enjoys having difficult conversations, but as any leader will tell you, they're absolutely essential. You can't avoid them. In fact, when you do avoid them, bad things inevitably follow.

[00:02:16] So Ashley's going to tell us about how she avoided difficult conversations with a lot of her team in the concrete company. Because they were by and large industry experts. Ashley knew nothing about the industry. And so even though she knew that some of the decisions that her team was making,  she didn't feel like she had the right to have a conversation with them about it because she didn't have the industry experience they did.

[00:02:42] So today we're going to provide you with some tips on how to successfully buy into a company that you have no industry experience in. So, we're going to tell you some things to look out for. How to get help. And we're also going to talk about how to have difficult conversations with people on your team when they are a subject matter expert and you aren't necessarily.

[00:03:04] So without further ado, here's my conversation with Ashley ultimately

[00:03:19] absolutely. Thanks for joining us today. 

[00:03:20] Ashley: [00:03:20] Thanks for having me. Happy to be here. 

[00:03:22] Mike: [00:03:22] So Ashley is the founder and CEO of profit matters and a self-described almost serial entrepreneur 

[00:03:30] Ashley: [00:03:30] almost working on it. 

[00:03:32] Mike: [00:03:32] Ashley, why don't you tell us a little bit about your background and what an almost working on its serial entrepreneur looks like.

[00:03:39] Ashley: [00:03:39] So I have a master's degree, an MBA from Tarleton state university, a little tiny town called . Stephenville, Texas really close to home for me. Part of the a and M group. I got a CPA license and I have worked as a CFO up to a CEO and been CEO of a couple of my own businesses. Some have done better than others.

[00:04:03] Mike: [00:04:03] So on that note, before we started recording, you were telling me about a Steve jobs quote that's applicable to your entrepreneurial journey. It's, it doesn't make sense to hire smart people and then tell them what to do. We hire smart people so they can tell us what to do. Wise words from Steve jobs, but you were telling me that you employed those words into your last business endeavor and it nearly bankrupted you.

[00:04:29] Ashley: [00:04:29] That's right. Almost bankrupted by letting other people call the shots 

[00:04:34] Mike: [00:04:34] before we dive into that, and that's definitely going to be what we focus on today. Help me understand how you got into that business. What was the industry and tell us how you got into that business? 

[00:04:45] Ashley: [00:04:45] Sure. So, I was the CFO of a company that sold, and my share of that company was enough that I potentially could have retired or made some really nice investments and not worth it.

[00:04:58] Again. Upon exiting and working through due diligence, I was approached by someone else who said, Hey, I've got this concrete company and it is running me in the ground and I really need to get out of it. Could you take a look at the books? Helped me catch everything up and potentially help me wind it down.

[00:05:21] Mike: [00:05:21] So he approached you because you're a CPA? You're exiting this other business, so you've got some time on your hands and you said, sure. So, he approaches you and says, Hey, can you help me just wind the business down? I want to kill it in its sleep and walk away. And you said, sure, I'll help you cause through that process.

[00:05:38] Is that accurate?

[00:05:42] Ashley: [00:05:42] Grow any business. Sales solves all problems. If the margins are good and you can add to the top line, then you can make a business a huge success and coming off of a big high of a wind or rat at the end, I guess of that high, I thought, Oh man, there's no way that I can't make this deal work. 

[00:06:00] Mike: [00:06:00] So you're coming out of the exit, you're helping this guy wind his business down.

[00:06:03] You start diving into his financials and a light comes on in your head and he said, this actually isn't a bad model. It just needs some Ashley. I can come in here because I know all the things. Look how successful I was on this accident. I know all the things. So, you thought if you go into this business, they just had a sales problem, not a business model problem.

[00:06:25] And. Save the day. That's right. Okay. So, once you had that realization, right, cause you're still winding it down technically, but you have this confidence coming off the exit that you can save today. Do you approach the owner and say, Hey, instead of winding it down? Maybe I can buy you out. 

[00:06:43] Ashley: [00:06:43] Yeah. I said, Hey, look, I can fix your cash flow problem.

[00:06:46] I can put some money in the bank. I can pay off the debt. I can get you an asset purchase agreement where I actually own the company. And so, you're not out of work. I can actually put you to work there as a sales manager with a really nice salary. And he agreed. 

[00:07:01] Mike: [00:07:01] Awesome. And what was the industry? 

[00:07:03] Ashley: [00:07:03] Concrete construction 

[00:07:06] Mike: [00:07:06] in your last industry that your exit was in?

[00:07:09] Was in what. 

[00:07:10] Ashley: [00:07:10] Manufacturing, 

[00:07:11] Mike: [00:07:11] manufacturing, concrete, 

[00:07:12] Ashley: [00:07:12] definitely not manufacturing concrete. Knew nothing about concrete, 

[00:07:16] Mike: [00:07:16] but you knew about business, 

[00:07:18] Ashley: [00:07:18] knew about business and thought, if you know about business, if you're really good at one business, you can be good at all businesses. 

[00:07:24] Mike: [00:07:24] Okay, so did he agree to the purchase.

[00:07:27] Ashley: [00:07:27] He agreed to the purchase purchased. The company had not fully exited. This was in August, and then we didn't fully exit until the following January, so there was some overlap where he continued to run the business as he did originally, and we poured sidewalks and patios and driveways for custom home builders.

[00:07:47] Mike: [00:07:47] Now, just directionally, what was the size of the business from a revenue perspective at the time that you got into it? 

[00:07:52] Ashley: [00:07:52] Yeah, when I got into the business, it was less than a half a million dollars 

[00:07:56] Mike: [00:07:56] in sales in sales. Okay. So, the exits done in January. You're all in by that point,  you pay off some of the some or all of the existing liabilities, and now it's go time.

[00:08:08] You've just got to pour fuel on the fire to grow the sales. 

[00:08:12] Ashley: [00:08:12] Yeah. I took all my chips off the table and I moved them over to the other table without. Any sense that I wouldn't be a super success and I wouldn't make this company $100 million top line company in a very short amount of time. And that was my goal on the wall.

[00:08:29] Mike: [00:08:29] So in new company you have you who knows nothing about concrete, you have a former owner who is now like the director of sales or something like that. That's leading the charge on sales. How did you fill the gaps? There are other roles, I'm assuming in a concrete company other than the CEO that doesn't know anything about concrete and the former owner who's now running sales, how did you fill those seats to build your team?

[00:08:54] Ashley: [00:08:54] Yes, so funny enough, originally as said, we were doing this residential concrete construction, but I happened to meet somebody. In the airport lounge and he was a general contractor doing ginormous projects and he offered me to do it. My first commercial project and doing that commercial project made me realize a couple of different things.

[00:09:18] One, we needed a really big team and two, we could hit that $100 million Mark I had on the wall really easy by doing jobs like this over and over again. So, I believe that you could. Have the best business. If you had one sale two, you had a really amazing team that knew what they were doing. So, I went out and I hired some people that were considered industry veterans, if you will, and the best in the business and paid them a lot of money to come over.

[00:09:47] Mike: [00:09:47] And these industry veterans, I'm guessing if they're the best, they're not small companies, they're probably at some of the larger concrete or construction companies around the U S 

[00:09:57] Ashley: [00:09:57] yeah, they came from,  one of the top concrete companies in our area. 

[00:10:01] Mike: [00:10:01] Okay. And again, just for scale, what size are those companies from a revenue perspective?

[00:10:08] Ashley: [00:10:08] Talking about companies that do more than $300 million in revenue a year. 

[00:10:12] Mike: [00:10:12] Okay. So, they're coming from these large kinds of mega concrete companies down to a little baby, almost startup. Size company that's under half a million in revenue.  and you're going to use your business expertise, the former owner’s sales knowledge in the superstars, and you're going to take this from under a half a million dollars to $100 million plus is quickly as possible.

[00:10:35] Ashley: [00:10:35] Yes. So quickly let that a sales manager, previous owner goes, because that relationship didn't work. So one of the things I learned was when you buy a business and you want to make a lot of changes and you want that business to look and act different than it did before, you can't have the same people in that made it look and act like that.

[00:10:53] You have to make a change. We constantly were butting heads on the way we were going to do things. So, with him out of the way and me on this mission to do $100 million in revenue, we,  quickly added the right people. And we started bidding against those $300 million concrete companies and we were trying to win jobs.

[00:11:17] In the same market, 

[00:11:18] Mike: [00:11:18] how was that going? 

[00:11:19] Ashley: [00:11:19] I thought it was going well, but we went really fast and I didn't know anything about the business. 

[00:11:25] Mike: [00:11:25] I'm assuming you were winning some of the contracts. 

[00:11:27] Ashley: [00:11:27] We were winning jobs. We were,  having a woman in the concrete business is kind of like a novelty. It doesn't exist.

[00:11:34] See, you could walk into just about any general contractor’s office. And you could try to get an appointment. Typically for man walked in for a cold visit like that, they'd be turned away by kind of the gatekeeper at the front desk. But when they push the button and say, there's somebody here who's a concrete contractor who wants to meet you, they say, well, who is it?

[00:11:53] And they say, I don't know, but it's a girl you immediately hear, send her back. 

[00:11:58] Mike: [00:11:58] Do they still have buttons like where you walk in and there's a gatekeeper and they, they ring the back? 

[00:12:02] Ashley: [00:12:02] No, but it's like a receptionist at the front desk at these big GCs and they're definitely protecting the person behind the door.

[00:12:10] Mike: [00:12:10] And so they would hear your sales pitch and 

[00:12:15] Ashley: [00:12:15] give us the opportunity. A woman owned business hub. We were exercising all the rat certifications. We were saying all the right things. I felt like we had all the rat processes business. Wise and financially set up. I guess we walked and talked the walk just as good as fuck walked in, talk a 

[00:12:36] Mike: [00:12:36] little trip up.

[00:12:37] The best of us. Walk the walk and talk the talk. Just the talk and walk the walk 

[00:12:41] Ashley: [00:12:41] it just as good as anybody else could. 

[00:12:43] Mike: [00:12:43] Awesome. And since the former owner that had experience in bidding these jobs has gone, were you the one that was leading the charge on the bids now? 

[00:12:51] Ashley: [00:12:51] I was not. We hired an estimator and that estimator also came from one of the big concrete companies and he came over with a wealth of knowledge and information.

[00:13:01] I did exactly what we talked about in the beginning with the quote. I hired people who I thought were amazing and I got out of their way and I let them do what they did best. 

[00:13:13] Mike: [00:13:13] So you're just crushing it today now, right? 

[00:13:16] Ashley: [00:13:16] Yeah. I wish what happened? I didn't have hard conversations that I should have had, and I went into a business that I knew nothing about.

[00:13:25] Mike: [00:13:25] What, what was going sideways that dictated that you have hard conversations and what was going sideways that made you realize, I don't know what I'm doing? 

[00:13:34] Ashley: [00:13:34] Yeah. One thing is residential concrete that I initially got into, and this, this move to commercial concrete are two completely different things.

[00:13:43] The margin on commercial concrete is. Really thin. If I would have looked into that a little more before I did it and done my own due diligence before making that switch, it was all that a top line revenue number looks really sexy and I'm going to go for it, and I could do a 20% on the line of a million, or I could do 5% off of 100 million, and that hundred million dollar number sounded really good to me.

[00:14:10] Mike: [00:14:10] So you soon learned that the margins on the commercial jobs were really small. A razor thin. I have a little bit of experience in the, in the commercial world, and one of the things that I know that's different from residential to commercial is payment terms. For example, a company that I was an executive at years ago had a deal with one of the major telecoms in the U S and we had a kind of a sexy job that came our way.

[00:14:33] And the job took six, seven, eight months. We had to pay our vendors net 30 usually, but we weren't getting any, our invoices were being paid net one 80. From our client. Did you run up into problems like that where Tesla became an issue on these huge jobs? 

[00:14:53] Ashley: [00:14:53] Same. Exactly. We grew too fast. Instead of learning how to do a $10,000 project really good, we learned on 1 million and $2 million jobs where when we ran into problems, we had to pay for those problems.

[00:15:06] What I quickly learned was. People don't want change, but people definitely don't want to see any change in construction. So yeah, there was slow payment terms. You need a ton of capital, more working capital than we had. You have people who say, you don't know what you're doing in this business. I know how to do it better, let me do it and just stay out of the way.

[00:15:27] So all of the things that I had learned in business, a process, procedure, ways to do things. Nobody wanted to actually do those things. So here we have people who come from a $300 million company. Running a small startup like a $300 million business. So,  we're spending money like a $300 million business.

[00:15:48] Also, 

[00:15:50] Mike: [00:15:50] you just didn't have the money there to spend, 

[00:15:51] Ashley: [00:15:51] didn't have the money there to spend, made a few mistakes, didn't get paid. I knew nothing about this business. 

[00:15:59] Mike: [00:15:59] So that's where the Steve jobs quote ties in. You brought those really smart people in. Cut out of their way and let them do it. But I guess it sounds like the gap was they didn't really know what the right way to do it at this smaller order of magnitude.

[00:16:12] And so they, they didn't really convert very well from the large behemoth concrete companies down to the. The little baby million-dollar sub million dollar a year company and the cash flow, the cash situation just didn't keep up with their way of doing business. 

[00:16:28] Ashley: [00:16:28] Yeah. We were competing with $300 million companies and we had no business competing with them and I wasn't willing to try to buck the system and go to these people and say, Hey, we are actually going to do something different, because I didn't, I didn't know how to make it better.

[00:16:42] I knew how to be made it make it better as a process or a procedure. We're going to. Do this or we're going to do that. But when you get to that scale and you have so many things going on, it's chaotic. You're a CEO, you're running a business. Not only are you trying to run the business, but you're trying to learn the business.

[00:16:58] It's a big challenge. 

[00:17:00] Mike: [00:17:00] So from the time you acquired the concrete company, until some of the red flags started coming up,  as a, as a financial expert. You start seeing the cash problems. How long are we talking from the time you came in until you said, oh shit, this isn't working? 

[00:17:16] Ashley: [00:17:16] Yeah. I would say probably 18 months in, I hit my big, oh shit, this is not working.

[00:17:23] And at that point, you're so far in, you know you're neck deep in water. It's like there's no option, but to keep going is what it felt like. I'll tell you also, once you put a whole lot of money and time and effort and energy into something, you kind of marry that something. It is really, really hard to give up and I just don't feel like I'm a give up person.

[00:17:45] And so I think that that was one of the big things was proving a point of I could do this because if I could win in one business, I could win in any business. And it's absolutely not true. 

[00:17:55] Mike: [00:17:55] So can I assume based on. What you were just saying, that when these cashflow problems came up, were you putting the money in from your personal assets to bridge those cashflow gaps?

[00:18:06] Ashley: [00:18:06] Personally draining my bank account personally draining me. Relationships, personally draining myself. 

[00:18:14] Mike: [00:18:14] What kind of relationships did you drink? 

[00:18:16] Ashley: [00:18:16] Oh, here's what happens when you empty a bank account and you empty yourself emotionally and you attach yourself to a business. Everything starts to suffer, but especially your relationships at home start to suffer.

[00:18:33] So you find yourself more isolated from friends. You find yourself more isolated from your spouse. I did in my case for sure, and I think that that's a common thread amongst business owners who experience a massive failure like this. 

[00:18:46] Mike: [00:18:46] I can't imagine what the emotional roller coaster would be like coming in an 18-month span from a huge exit.

[00:18:55] From the company that you were with for quite a while. You moved from the ranks into a C-suite position, led them to a successful exit, riding high, and then in the span of a few, really a few short months, 18 months, you acquire a company, you have all these ambitions and dreams of making it do big things as well.

[00:19:17] You hire what you think are the right people and you're paying them these crazy salaries. You meet a guy at the airport that gets you into the commercial industry. You see the forest through the trees of how to get to the nine-figure revenue goal pretty quickly, and you start running fast and then realize, I have no more money.

[00:19:37] Me 

[00:19:38] Ashley: [00:19:38] whole life 

[00:19:39] Mike: [00:19:39] is completely wrecked and. I don't know what to do to get out of this hole. What? What was that like? It's, I'm, I'm imagining it was scary. 

[00:19:48] Ashley: [00:19:48] Yeah, sure. It's like who's been raising my children for the last 18 months? Home life is just complete until the wreck, but it's not only that the life is a wreck.

[00:19:58] The businesses are wreck; the finances are rack. Like everything felt like it was an absolute disaster. And I think it's at that time, like you. You just take a look around and you go, I can't do this anymore, and you make a plan of exit, and that's, that's what happened at that time. 

[00:20:14] Mike: [00:20:14] Do you remember the moment that you realized; I have to tap out.

[00:20:17] Ashley: [00:20:17] Yeah, I do.  and it wasn't that I absolutely had to, I had factories set up. I had a line of credit set up that wasn't exhausted. 

[00:20:24] Mike: [00:20:24] Factoring, 

[00:20:25] Ashley: [00:20:25] factoring where you can give somebody else your receivables in exchange for cash up front. So, if I was, if it took me 120. Or 190 days, let's say, to get paid. I could get that money the day the contract was signed by factoring company, if you will, but they were going to take money off the top, basically a really high interest rate.

[00:20:47] Mike: [00:20:47] It sounds like a payday loan. 

[00:20:48] Ashley: [00:20:48] Similar. 

[00:20:49] Mike: [00:20:49] Okay, so factoring was an option and there were some other ways that you could run up, basically additional debt. To keep the Casper edge going, but you decided not to. 

[00:21:01] Ashley: [00:21:01] Yeah. I talked to a couple of investors and people looked at the financial statements and we looked at projects and it just felt like the hole wasn't going to end.

[00:21:10] It was like when they say if you try to save a drowning person, you'll drown yourself. It felt like we were drowning, and it felt like it was time to get out of the water. 

[00:21:21] Mike: [00:21:21] One of the things that you mentioned early in the conversation that was a lesson learned, other than not having any industry experience was that.

[00:21:31] You learned the importance of having difficult conversations with people? How did that fit into the story? 

[00:21:37] Ashley: [00:21:37] Yeah. I'm still learning that something that I'm currently practicing every day, and so the situation is this, you can't go into a business you know nothing about because you don't know how to tell other people when they're doing something wrong.

[00:21:51] The whole thing is, yeah, if you know how to build a computer and your Steve jobs and you were there when the very first one came out, you know the ins and outs of that computer. You can hire somebody and get out of their way, but you absolutely know when something's going sideways. I had no idea when something was going sideways until it was too late.

[00:22:12] You get on a project that lasts the whole year, halfway through the project. It's a little late to be trying to recover. You have to know everything step by step the entire way. And I just would've done things differently. Also, there were a couple of times that I saw something going sideways called the team and we addressed it.

[00:22:32] Nobody felt like we should change anything. It was this methodology of, well, let's just keep going. This is part of it. We're learning. I can't tell you how many times I heard that this term and I would never agree to it ever again in my whole life. Let's buy some projects so we can learn. So, we're going to bid a project at $0 million to break even, so we can let other people know.

[00:23:00] We are really good at what we do. So, they're going to go with the low bid. They're only going to choose you as a high bid if they know that you are just quality through and through. So, we're going to go work for some of the top feces and we're going to show those GCs. We can kill it. But we're going to do the job at a zero margin.

[00:23:19] So they hire us at a really good margin next time. So, some of these things that we're going to buy jobs and we're going to do this and that. I felt like in my heart of hearts,  deep in the pit of your stomach, he goes, something's not right here. But then you go, you know what. I'm paying this person $150,000 a year because they know what the hell they're doing and I down.

[00:23:37] So I'm going to trust that this person is giving me really good advice and I'm going to see how this plays out. And it played out very poorly for me. And I'll tell you, I saw Brene Brown recently, and she considers herself a researcher. And in her research, she said, I think that the number one determining factor between success and failure is the ability to have a hard conversation.

[00:24:01] I took that away from, from that meeting, and I thought about it a lot and I thought about people that I knew personally who were super successes, and all of those people are happy to have a hard conversation. They're willing to do it. And I have always avoided confrontation at all costs. And I realized if I wanted to be successful in that business, I had to be willing to step up to these people and say, you know what?

[00:24:27] I know that you think that's the best way to do it. There's actually a better way, but when you know nothing about a business, how can you say you have the right to do that? 

[00:24:36] Mike: [00:24:36] Yeah, that, that's interesting. I think I shared with you before, there's a great book called the hard things about the hard thing, about hard things that walks through a lot of those, those types of conversations that you have to have with people in business.

[00:24:50] I highly recommend that for you and anybody that hasn't read it before, but I can certainly sympathize with you as somebody that has no industry experience. When you have these people that are making high six figures that you've brought in because they're the experts, who the hell are you to tell them.

[00:25:05] That the strategy that they're employing is wrong. But I think that the, the asset that you had coming into the arrangement was your business acumen and your business acumen was telling you this isn't right, but you, because of your 

[00:25:21] Ashley: [00:25:21] investment in the 

[00:25:22] Mike: [00:25:22] business, well, you're disinterested in, in confrontation.

[00:25:27] The only thing that you really brought to the table was that business acumen, that general business acumen, and you were afraid to leverage that. And so that left you pretty much high and dry. Is that accurate? And what have you done to improve yourself in the skill of having hard conversations? Is that something that you've worked on?

[00:25:45] Ashley: [00:25:45] Just working on it currently every single day. And so, one of the things is I'm practicing that I don't have to be nice to everyone actually tried this today. I go out of my way to be really nice to people. And then what I realized is people aren't nice to me back, but I don't have to be nice to people.

[00:26:03] I don't have a responsibility to own anyone else's emotional outcome, actually, their physical outcome either. So instead of me carrying the burden of, I'm about to make someone feel a different way, I feel I only have the responsibility to show up and be genuine and kind and direct. So, if I can do that, I think it would make a major.

[00:26:24] Impact on the rest of my life and more, especially on my business life. 

[00:26:29] Mike: [00:26:29] Genuine kind and direct. 

[00:26:32] Ashley: [00:26:32] I think so. 

[00:26:33] Mike: [00:26:33] So the concrete company is all but gone now. 

[00:26:36] Ashley: [00:26:36] Yes. 

[00:26:37] Mike: [00:26:37] It still has. It's hooked up to a little bit of life support, but it's not really doing much. Is that right? 

[00:26:43] Ashley: [00:26:43] That's right. I just think, why would I spend my time, effort, energy on a business I could make three or 5% on, on a good day, on the bottom line, when there's a lot of good businesses out there that make a really nice margin.

[00:26:55] Mike: [00:26:55] So for. Other serial entrepreneurs in training, like you've described yourself that are thinking about going into a new industry or a new business, what would your advice for them be? 

[00:27:05] Ashley: [00:27:05] Does that make sure you researched the business? Go find who's the best, let's say handful of people in that business. And I mean, beat their door down to get an appointment because I've met some of the best people in this industry now, and they have asked me over and over again why this business I'd get out of this business.

[00:27:24] I'm stuck in this business. This is horrible. I've felt. Bankrupt seven times over and over again. And if I would have actually gone out and said, Hey, I'm going to be the best in this business, this is what it looks like, then I would have went to meet those people ahead of time and I would've had a full understanding of exactly what I'm getting into.

[00:27:44] So what I would say was not only financially understanding what you're getting into, but really understand what you're getting into across the board 

[00:27:51] Mike: [00:27:51] before you get into a business venture. Six, seven, eight, nine, 10 people that have been down that path in that industry, and maybe even in that industry at the same size business that you're looking to get into, right?

[00:28:06] Because we learned the $300 million executive may not be the good $500,000 executive but find people that have walked in those shoes before. As many of them as you can and solicit advice from them and find out what they would do it. Do they think it's a good opportunity? What are the risks? What does the upside look like?

[00:28:25]  they're going to be able to tell you, Hey, 5% is an amazing margin in this industry, and then you can start to think, okay, if these are the risks and this is the, for example, the cash that's going to be required to grow it. And I'm doing all of this. I'm putting all these chips on the table in the hoping to hit 5% margin.

[00:28:45] Maybe that's not for me. Maybe it is, but maybe it's not. 

[00:28:48] Ashley: [00:28:48] Yeah. Don't also don't get an attached emotionally to a business. Know when you can walk away. I think as it. Starts to explode. When you grow too fast, you feel like, oh man, how could I walk away? One, I've got too much money in it. And there were a couple of those points where I knew it was time to walk away and I could have walked away much nicer than I did, and it just would have been a better scenario.

[00:29:13] And I think that I was so emotionally tied to the outcome of my business. I tied my personal identity to that business, and it was a train wreck. 

[00:29:24] Mike: [00:29:24] I can certainly sympathize. I think that for me it's hard not to get emotionally connected to the business, but I try to do, to avoid that is I sit put scenarios out ahead of time.

[00:29:37] With kind of if then, so when there is no emotion and there is no drama, I say if the business gets to this point, I'm going to walk away. Because you do tend to have make emotionally based decisions in the moment I have found in life. It's, it's helpful for me. And, and that's true for the upside to,  have that plan, some of those scenarios.

[00:29:57] So that along the way, if you find yourself caught up in it, you've already made the logical decision. And trust yourself in that moment that the unemotional you. Knew what was best and then execute accordingly. 

[00:30:10] Ashley: [00:30:10] That's right. So, I think anytime that you start a business, or you are going to purchase a business,  another recommendation that I would make is fully understand the capital requirements of that business.

[00:30:23] Even if you pivot at one point, like I did really understand what that looks like along the way. It'd be much easier to get an investor on the front end than it would on the backend.  they the age old saying of take money when you don't need it instead of waiting until you need it and desperately looking for it because it doesn't work.

[00:30:42] And so I'd say like fully understand, but also have a number of, if you want to put $200,000 in a business, then you want to invest that into it. Then write down you're going to invest 200,000 but when you use all that 200,000 don't panic that it's gone and put 200 more in. No, that 200,000 was your number and happily walk away.

[00:31:05] Mike: [00:31:05] We see all the time; I would say 60% of the businesses we work with. The problem with the business isn't a leadership problem. It's not a product problem. It's not a quality of service issue. It's the inability to properly plan for cash flows and understand what those capital requirements are to run the business.

[00:31:26] One of my favorite sayings is revenue is vanity. Profit is sanity, but cash is King. People love to focus on the profit and loss statement and see the, especially that big number at the top. Sometimes they're disciplined enough to see what the profitability is at the bottom, but looking at the balance sheet and understanding what, what kind of cash assets you're going to be able to have and what's going to be required.

[00:31:47] To grow the business and to scale the business easily, 60% of the time. That's where businesses go wrong because they just don't, they don't even think to do it. It's not that they do a bad job of it, they just don't think about it. They say, I know what the margins are and if I can just hit this revenue, I'm going to walk with this much money.

[00:32:04] But, but I think your case is kind of hyperbolic,  constructions like that where you can have great profitability, have more revenue than you've ever had, more profit than you've ever had. More employees, more customers. Shit. I can't make payroll and what's going on. So, I would definitely want to piggyback on the importance of understanding the cash flow requirements to run the business.

[00:32:25] So due diligence, talk to people that have walked the walk, be willing to have difficult conversations, understand cashflow requirements. So, the concrete business is all but gone. What are you up to today? 

[00:32:39] Ashley: [00:32:39] I'm doing what I do best. So, before I was CEO of the concrete company, I was CFO of another company.

[00:32:48] And,  I should live in that financial space. I'll tell you, a good friend of mine and mentor Rick Savio says, simplicity, probability, and leverage in all things in your life. And he says, the concrete business is definitely not. Simple. The probability of me succeeding in it was less than half because I had no experience.

[00:33:09] And then was I able to leverage any of my current skills or relationships to make that successful. And I also was not. So, what I would say is if you could leverage those,  if you could use simplicity, probability, and leverage to make a business successful,  that would be best. So, I'm using those skills and in applying those three things to my current business, profit matters.

[00:33:32] And I think there's a lot of business owners out there that. Need accurate financial statements to make better decisions, but also not overpay on their fair share of income taxes. And then business owners who are relatively small think, Oh, I cannot afford a bookkeeper. So, we've made a service that allows small startup businesses or businesses, I'd say under $5 million, really have an affordable option to have a CPA and a bookkeeping team work on their team.

[00:34:01] Mike: [00:34:01] And where can people learn more about your services? Sure. 

[00:34:05] Ashley: [00:34:05] A profit matters dot C O 

[00:34:08] Mike: [00:34:08] C O and not C. O. M. 

[00:34:10] Ashley: [00:34:10] no profit matters.co 

[00:34:12] Mike: [00:34:12] profit matters.co Ashley, thank you very much for sharing your story today. I really appreciate you stopping by. 

[00:34:18] Ashley: [00:34:18] Yeah. Thanks for having me.

[00:34:30] Mike: [00:34:30] Thanks for joining us today. Please don't forget to subscribe to in the trenches with Michael King on your favorite podcast platform like Apple, Google, or Spotify. Once again, I'm Michael King with KFP solutions. We'll see you again next week.