On today’s show, I’m talking with Pete Martin, who started, scaled, and sold four of his previous companies (including car leasing, systems integration consulting, business process outsourcing, and software distribution). Pete will share how he intentionally applied what he learned in the first couple exits to his last venture in order to scale up EntryPoint to sell to KPMG for 12x EBITDA without having to go with the sale or take an earn out.

This is a very rare story because many times professional services companies are valued around 1x revenue or a small multiple of EBITDA with an earn out. Pete explains how he created a company manifesto at the very beginning, created a very unique service and pricing model and then scaled up using very little cash… all on purpose.

What You Will Learn In Today's Podcast Interview

How and why Pete created a company manifesto on day one
How seeing his business as an asset helped Pete achieve his goals
Why Pete declined a $5M customer contract
Why you should look at 5 years for an ROI on each hire
What polling your employees about culture and values will tell you about your business
When to hire full-time or part-time employees and what that means for culture
The underappreciated impact of invoicing on your cash flow and company (for employees and customers)
Ways to scale your company without using any capital
How to balance cash flow when hiring, whether contractors or salaried positions
What happens when a company lives in accordance to its values, as well as the long-term client Pete secured by owning up to an expensive mistake
How to get out of the owner’s trap (when you are the key employee)
How to build a narrative that allows a strategic buyer to buy into the reasons they should acquire your company
How Pete got the business sale unstuck within 30 minutes after talking to the VP of KPMG
The difference between a strategic buyer vs a financial buyer of a business
What happens when you tie outcomes to your Net Promoter Score and get your employees aligned with that

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About the Guest:

Pete Martin worked in sales, operations, and executive management for over 25 years beginning in sales at IBM, executive management at SAP, and then building six of his own companies. Pete has been personally involved in the sales of over $1 billion dollars of software, services, and technology to global companies including Dow Chemical, Lockheed Martin, Eli Lilly, and Continental General Tire, as well as small to medium-sized businesses.

Pete started, scaled, and sold four out of four previous companies (two remain active including AskMyBoard) including car leasing, systems integration consulting, business process outsourcing, and software distribution. His last firm was sold to the global auditing giant, KPMG.

Quotes:

07:08 - “Even though I made, pretty much, nothing on the exit, the learning in the time that I owned it was pretty much priceless. That was basically a million dollar MBA.” - Pete Martin

12:00 - “Let’s just go build a really, highly valuable company. Because when you do that, you have lots of options.” - Pete Martin

15:36 - “Those first couple of hires that you bring on board will pretty much, irreversibly, set the culture. So you’ve got to be really mindful of what you do up front.” - Pete Martin

23:57 - “We used to take our employees through, we called it, Finance 101 because we wanted them to understand the impact of ‘not getting your timesheet in so we can invoice’ has on the company.” - Pete Martin

26:35 - “The value of a business that has a bunch of independent contractors is not worth the lot, because anybody can go replicate that tomorrow.” - Pete Martin

Links and Resources:

Pete Martin

AskMyBoard.com

Email: pmartin@askmyboard.com

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You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

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