How Lutz Lehmann Helps Companies Navigate Finance, Growth, and Risk

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue Strategies and their 10X ROI B2B Growth Guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. Hello and welcome to another episode of the B2B Growth Blueprint Podcast. I'm your host, Mark Osborne, And today I'm very excited to welcome my guest, Lutz Lehmann. Now I'm going to read Lutz's bio to make sure I get this right. He has more than 3 decades of global business experience and is a go-to advisor for business owners ready to build value and exit smart. Since 2016, he has dedicated himself exclusively to mergers and acquisitions, exit planning, and business valuations, helping entrepreneurs strengthen their companies and unlock their full potential. Before founding his current company, Magnus Business Group, Lutz held CEO and COO roles in the electronics, telecom, and automotive sectors, leading with precision, purpose, and innovation. Armed with a master's in electrical engineering from a top German university, he brings both analytical rigor and real-world insight to every engagement. Lutz is a certified exit planning advisor, a M&A Master Intermediary, and a Certified M&A Professional, and is licensed in California. He has guided countless business owners in service, manufacturing, tech, and the medical industries to scale with precision, increase enterprise value, and build resilient operations that perform regardless of market conditions. His strategies have led to stronger margins, smoother exits and accelerated growth. Whether you're chasing expansion or prepping for a high-stakes sale, Lutz delivers actionable clarity, sharp strategy, and a relentless focus on bottom-line results. So, Lutz, welcome to the show.

Thank you. Thank you, Mike. Thanks for having me.

Yeah, absolutely. I've been looking forward to this conversation. But before we jump in on some of the topics, uh, why don't you give our audience a little bit of background? You You mentioned that you have a, you know, a master's degree from Germany and now you're here in California. Tell us a little bit about that, what that path looked like.

Oh yeah, it's interesting. I have to, I have to go back so many years. So yeah, after my university time, so I started in an electronic manufacturing business company About 800 people. So I really applied all my what I learned in that manufacturing company, and then I changed industries. I worked in telecommunication because at some point, as we all know, we had the internet boom. So I went into that. So I learned about everything about internet and how it works worldwide. And so, and then later on. And I think more than 20 years ago, I came and I worked as a consultant too later on in Germany, helped companies that were in trouble to get back into the profitable zone. And then I came to the US more than 20 years ago. It was more like a personal move because I met my wife.

Okay.

And started consulting here. I helped European companies to come over here and start a business that are successful. And then, uh, I worked more like in the automotive industry, right? And I was involved in mergers and acquisitions, uh, or was it maybe 20 years ago or 15 years ago the first time? And then, uh, 10 years ago I decided to go and work with, uh, medium-sized, smaller companies Uh, helping them to transfer their businesses and of course wealth and assets to someone else. Because I'm a, I'm an, I'm an entrepreneur too. I had businesses in the past, uh, and sold them. I know how hard it is to start a business from scratch, run it with all the ups and downs, uh, and have sleepless nights. So, and I want to make sure that the business owner who has their business for so many years and went through all that experience to get the most out of it. So that's my goal. And that's my motivation because I know what it means to run a business.

Well, and there's a lot of sort of unforeseen things that happen. And I know you and I have talked about this before that a lot of business owners, they're looking at a really long horizon of I'm planning to run this business for a long time. I don't need to be thinking about exiting or succession planning or any of that. Like, this is what I do and what I'm going to do. But then they find themselves surprised. And you've referenced like the burnout factor and that a lot of folks that come to you, although they had planned on being there a long time, now they're in a space where they're like, I need to sell it yesterday. So, tell us a little bit about what happens and some of those things that people might not be thinking about.

Yeah, it's a— that's a good question. I, I come across a lot when talking to business owners because a business exit is not on their agenda at all because they're involved in the day-to-day business operation. They have issues, they have to solve it, they have to jump in. Sometimes it is very busy, sometimes it's not so busy, but anyway, it's more like It's not on their agenda. And all of a sudden, you have a life event like what you mentioned— burnout. We talked about that. They have health issues. I come across that as well. The business owner tells me, oh, you know, I'm 60 or 65, sometimes 70. Sometimes I talk to business owners, they're in their 80s. Yeah. And They tell me I went through so many crises over the last decades. Yeah, we had—I mean—the most latest one, 2008—they had issue. Then they had COVID. Before that, they had other crises, and they survived. But it took a toll on them, right? So it's not that it goes away and. We think, oh yeah, if you're an employee, you might not think that way. A business owner thinks, okay, how can I run the payroll maybe, you know, next month or the next? So, and that's when they realize, okay, what am I gonna do with my business? Sometimes they don't know and they say, oh, I might sell it. I might transfer to my relatives, my kids, or have a nephew, whoever it is. Or do I just winding it down orderly or closing the doors? Yeah, right. And so these are the questions most business owners have. And there are options, right? There are many different options. Doing so. And as I mentioned before, they build a lot of wealth. And why not monetize it at some point, right? In a really, I would say, clever way. Because I'm working most of the time, not just on myself, I work always with a team. Because there is no business. That's what I realize so far that is ready to sell. There's always something where there are two reasons. One is sometimes an owner says, "Oh, you valued my business," and I thought it is actually twice as much worth. Right? Right. Sometimes I have to say. You know, your business is it's not really sellable on the market. Yeah. So there are many reasons to look in it, and if you if the business owner has still runway, we can fix that, right? We can help them to either make it sellable on the market or even increase value. And sometimes you can increase value. You can actually. Double the value if you have a little bit more runtime. And I'm talking about half a year, year, at least 2 years, sometimes longer to make it more sustainable. And even if you transfer it to your kids, they want to actually have a business they can run, right? And not dealing with certain issues they might have in future.

Well, and it's having that time to think about it gives you the flexibility to do a lot of things. And so that it's not so much that, well, when you get ready to sell, you need to plan a year more so that you can do some things today that start to make your business more ready to sell whenever you want to do it. So that if you do get surprised by disease or death, or maybe a partner in your business gets one of those surprises, you're much more prepared. So what does it mean for businesses to be prepared? Like, what are some of the things that, you know, they should do even if they're not thinking about selling in the next 2 years, but they know that when they do sell, they want to get the most value for, you know, what they've built and extract the most, you know, equity from that? What are some of those things? What does it mean to be prepared?

Yeah, I mean, you're absolutely right. And it's a good question. What does it mean? To be ready to sell, or maybe if you don't want to sell it, right? You want to continue. Yeah. In having a plan, having, for example, clean financials. So what does it mean, clean financials? Cleaning up financials means that, for example, personal items like you actually. Have a big car collection, right? And every expense that are related to your personal car collection go through the business. Yeah. So this is one thing. Another thing is, I've seen business owners that run almost everything through the business. Now they actually building a pool at home. They actually need a generator for if you know they have electricity shut down or whatever happened. I I've heard all that, right? So they do a lot. So that means, and and the reason is they want to not have a high taxable income, right? And I understand that. I mean, I get that. But there are other ways and actually not having a high taxable income. If you take those items out, let's say personal items, you can actually add another personal items which is totally legit. For example, retirement planning. Talk to your financial advisor and have a cash balance plan or something else, right? Or 401 that that runs through the business, which is totally legit. It will not jeopardize the value of your business, but it reduces your taxes at the end. Right? So this is just one one example. This is about financials, and make your financials also transparent. You know, to to to structure everything in a way that if someone from the outside comes in. Understands what you're doing, how the financials reflect what you're doing in business. So that, and where I can help to make it really transparent. So another 2 major items that I always see is, for example, customer concentration. That's how we call it when you have just Let's say one or two customers that cover more than 50 or 40, 50% of your revenue. If if a buyer comes in and looks like that, they say, "Oh, if this big customer leaves, I'm actually losing 50% of my revenue or even more sometimes." So nobody will buy that because the risk is too high because you might. You might know the buyer personally, and if the buyer sees that you're leaving, they might go somewhere else. Right? And then another big item or topic is the owner's involvement in the business. So if if if the owner does all the decision or makes all the decisions. And employees come to him with every single item. So that is also a big risk for a buyer because if you're not there as the owner anymore in the business, the employees knew that, oh yeah, I go to the boss and he actually has always the solution. I mean, that's fine. I always say, yeah, that actually feeds your ego to say, right? Which is okay. I mean, a business owner would not be a business owner if you're not having those kind of high standards. I would say you wouldn't be a successful business owner. But at some point, it is wise to delegate tasks to, let's say, key employees, build a team, and give up responsibilities and focus on, let's say, a business grow. Where do I get tapping into another industry, for example, or find another geographical, geographical area to expand the business? That's what business buyers or buyers of businesses are looking for. So these are the 3, I would say, major aspects: financial clarity, uh, customer concentration, And owners' involvement, and there are others. But these are, I would say, the major items that I'm always see where there is a lack of. And then one one other item is that's always a funny item. Almost, I would say, every business owner tells me when they sell the business or when they want to sell the business, a new buyer can come in and actually do marketing and sales, and they can double the business right away. Everyone tells me that. I say, okay, why haven't you done that yet? So, so, and I, I get that business owners are 60, 65. They're not so familiar with new technology, with Instagram and LinkedIn, Facebook and Twitter and, oh no, it's called X. Sorry. So, and they don't want to get into it anymore. They don't want to do blogs. They, oh, Sometimes I see they barely have a website. Sure. So, and that needs to be, that needs to be looked at. And if you have an advisor who can actually really get into that marketing piece and at least showing them to get started on that topic, that'll, that'll also help a lot.

That's right. Well, so you, you hit on a couple of points that, you know, really kind of resonated with me because one of them, you talked about sort of removing the owner as the bottleneck. Within the organization. And if you think about it, like so many business owners talk about, oh, the stress of, you know, having to make all these decisions and, oh, I can't be away from my business because I have to make all of these decisions. But, you know, even, you know, folks that focus on just operations in a regular running business will say, you know, building out the processes that can then run on their own, that you can remove yourself from that, building out a team, a leadership team that you can trust that can make decisions so that you can actually take a vacation and enjoy the fruits of your labor. Not only does that make your life better today, but it also makes the business run better and improves the value of the business when it comes time to sell. And so, it seems like such a— like there's multiple benefits to doing this, yet So, you know, so many businesses struggle with, you know, sort of doing that. And I think sometimes it's that, you know, it's the other thing that you talked about, which is this sort of, well, I don't want to overinvest in the business. And so, from the perspective of, well, we don't upgrade our, you know, our website because we don't really need it. Most of our customers come from, you know, referrals. And so, then it gets to where it's so antiquated.

Yeah.

It's a teardown, as you might say in the real estate space. Instead of keeping the house upgraded, it becomes sort of a total teardown. How do you help businesses think about sort of being sustainable and also sellable and sort of that there's some of those hidden dangers of underinvestment?

Yeah, that's a good point. It's I would say being prepared is just it's not just being prepared for an exit, but it also means it's just good business practice. That's right. Right to to continue your business in a way that you're not exhausted every day, as you mentioned, to implement processes, yeah, to build a team. And I have seen that it's— there are not many because I'm working in many manufacturing businesses, right? So, and they're related to construction, to machine shops and those kinds of businesses. And what I've seen, some business owners, they really built a team. They don't know everything. They come with the, um, uh, with, with, with the, uh, the message, uh, I'm not the smartest guy in the room. I have my CFO, I have my, uh, chief operating officer who runs the day-to-day work, I have my purchasing managers, I have my sales manager. I have my program manager, all my project managers in place. This is a team and he's still busy. So he nurtures clients, bigger clients, and makes sure that he gets the new, the latest technology that he can use. He works constantly on processes to, to, it's not just having the process here in your head. Just writing it down and communicate it in a way that everybody understands the process and then work on that. Make it more, make it more visible so that everybody can relate to it and they can live it in the company. And this is just, this is just a precursor for a business owner not only to sell the business at a certain time, It also gives them the freedom to have vacation, go to Hawaii for not just three days but for four weeks, lay on a boat in the ocean and enjoy the sun, right? And coming back and the business is still fine. So that's and this is as I mentioned, this is just good business practice. And I help business owners. To let's say have we call it job costing, right? You know, okay, you make an you have an estimate. You say okay, and you give a price. You have a bidding, and then you get the project awarded, and then you work on it. So, and then actually, if you finish everything, you send out an invoice based on based on your contract or agreement what you have with your client. But how do you know if it was profitable or not? So there's just the next step. There are not many. There are only really a fraction of businesses that doing it like that. They know they do job costing. They see what's the labor cost, outsourced services, material, everything like that. So there, and those businesses, it's not only that they're sellable for a good price. They also are for buyers. They're looking for those business because they look through, I don't know, 300, 400 businesses every year. Yeah. And they pick the best ones, of course. And it's not only that they pick it, they pay a premium and Then they make an— of course, they make an offer. And if it is well prepared, like what I mentioned, you have documented processes, if you have transparent financials, if you have a key team in place that actually knows what they're doing because they interview them— the process of due diligence is shrinking, the time process, because everything is in place. You don't have to Create documents. You don't have to dig where you find the information, because when I go in on to market with the company, I I put together a data room, and I know what the buyer is looking for, and I already prepare data rooms. So when they come up and start start due diligence, everything is there. Of course, there are some few items that needs to be done, but the majority is there. So that means the whole process. That is daunting. It's not easy to go through if you have never done it. It's not— if, if you can shorten the time, uh, your stress level is actually much, uh, lower than if you're dragging it on and on and on and you don't know what happened.

That's right. Well, and if a buyer is evaluating a few different businesses and Business A, every question they had, They have, well, the answer is either already there in the information, they just get pointed to it, or they can shortly produce it versus Business B where, well, why do you need that? Well, it might take us a couple of weeks to get that together. That makes it really easy to see the difference between what's a well-run business that would be easy to invest in versus a business that has a lot of risk. And so, obviously, pay a lot less for this business with a lot more risk than the one that seems a lot better run. You also hit on something a second ago that I think is worth calling out, which is a lot of business owners think, well, I really can't afford the overhead of hiring a full-time CFO and of hiring a full-time marketing or sales leader or hiring this operations person that's going to go through each of my jobs and You know, do this financial analysis for me. But I see today that there's so many fractional leaders within, you know, lots of different places of expertise that, you know, many business owners are taking advantage of that as a way of saying, well, I don't need to hire a full-time, you know, always-on person that may or may not, you know, be utilized the full time. But I can get a lot of these benefits by working with some of these experts that are out there. Have you seen that trend impacting the businesses that you work with?

Oh yeah. I mean, there are, I would say, medium-sized businesses or let's say smaller businesses that start revenue-wise, yeah, $8 million and up in between. 8 million, and I would say 10, 15 million, they hire a fractional CFO. They don't, as you mentioned, they don't need, they hire sometimes even a fractional marketing person to say, you know, for certain marketing strategies, I need someone to help me because everybody else, we're not up to the task here. Yeah, right. And I see that a lot. If you are larger, let's say you have 15 and up million in revenue, and your cost structure is just in a regular, let's say, ballpark range, then you have a CFO in there. And it is not— I have to make the distinction between CFO and accountant. Yeah, you might have an accountant, right? The accountant, he— they record everything that you have a P&L at the end and a balance sheet, but it doesn't say that it is— that you can see how you perform. A CFO looks at key KPIs. They look, uh, what is— what is the, uh, the strategy? How do we, for example, Buy a new machine or go into a different market. Can we afford it? Do we have enough work to do to utilize the machine? So they do their calculations and give the owner, you as the owner or the owner, the recommendation: Yes, we should buy it because then you have again if you invest call it capital expenditures capex. You at the same time reduce your tax burden because it's a tax shield, but you also increase volume, your market share at the same time. And the CFO can give you a good recommendation in either saying yes or saying, oh, I would not do it or wait until we maybe get a new job. But you're right. These nowadays it's a trend. It's not what we had thirty years ago, where you have to have an accountant and yada yada yada. Now I say, okay, I need someone who looks at my financials. So I look at a fraction CFO. I know I worked with a company once; they did signage. They they they had hired a marketing person. To actually come up with all the promotional videos. They look at the content, what they can put on on on the website. They look at SEO. They they have some other messages that they want to actually spread to the world, and then not only they're spreading it, but also monitor. Where where is the where are the most responses are coming from? What is the best way to marketing? So that's because we all know we don't. I mean, it was a saying many many years ago. We don't know what half of my marketing budget was successful and what not. Nowadays, with technology, you can see that you can really narrow it down much better than it was. So that's the old thinking to— should supposedly be replaced with the new thinking, right?

Yeah, that's right. Well, and that it's that interesting sort of the inflection point that we're at where the speed of innovation is just changing so rapidly that even things that were cutting edge, you know, 2 years ago, you know, are now starting to be sort of passé and tapped out. And so it's very hard to keep pace with that. And what we see is that it's It's having those kind of really strategic thinkers and thought leaders, that CFO versus the accountant. The accountant is sort of backwards-looking and can keep track of everything, but it's the CFO that can help you see around the corner.

Yeah.

And it's worth that investment in that sort of strategic leader, at least on some periodic basis, to keep you moving in the right direction and focused on The things that matter.

Yeah, yeah.

So, you're obviously an expert in a lot of super interesting things, and we could talk all day, but I got to be mindful of your time. But, you know, as we've been talking, and, you know, I'm sure our audience has been hearing some of the insights you've been sharing, tell us, you know, a little bit more specifically about the work you do at Magnus, sort of who you work with and the results that they get from working with you.

Oh yeah, yeah. As I mentioned before, a little, a little bit, I'm, I'm in, and Mark, as you mentioned in my intro, in your, in the introduction, I'm an engineer by trade. So I'm focusing on everything what is technical, which means I work with business owners that are in a manufacturing sector because I know what the design review is and how it looks like and how business supposed to be structured. I work with companies that are in the service industry, which means it comes also close to making things, for example, steel fabrication, construction, HVAC, electrical, plumbing, roofing, landscaping, those kind of service companies. And I also work with companies that are in the warehouse distribution area. Where you have a lot of inventory comes in and goes out, you need really fast processes and how payments are structured, everything like that. And then on on top of it, I work with companies that are in the healthcare business. I have done many businesses in that area, and there here and there some others. If there is a business that I'm not familiar with, I refer to someone else. That's what we say. Okay, I want actually want to make sure that a business owner who wants to transfer the business to someone else gets into the best hands so that because I don't know so much about biotechnology, for example. Sure. So that's these are the companies I'm working with. I cover, I would say. I wouldn't say Southern California, but mostly geographically, LA County, Ventura County, Santa Barbara County, Orange County. So I go a little bit further east too, but not that far. So because I would like to meet every owner in person, I'm maybe old-fashioned, but I know Zoom is around for so many years, and everybody got familiar with that. And we even on Zoom too. On Zoom too, but I want to see. I want to meet everybody in in person when it comes to a transaction. We have introductory meetings. I want to be sure that I'm always with the owner on his side, so that he's not exposed to some sometimes weird question from a buyer. So I can I'm always be there. And that's my, that's why I also add value. Right. And my process is, I start always with evaluation. Yeah. And it is good to know your value, what, what, what company is worth. Either if you don't want to sell it at all. Right. It's always good to know. Let's say it's $1 million, $2 million, $10 million, or $30 million worth, or even more. And then my valuation is not just based on numbers, it's also based on the qualitative aspects of the business we mentioned before— customer concentration, financial transparency, etc. I give feedback and ideas what can be done by a business owner or the team to really increase value over time if they have the runway. If they want to sell it later on, or if they continue the business for many, many, many more years or decades. And so this, and then of course, let's say he wants to sell it. I give him a strategy where I'm not only doing it on my own, because I always form a team which consists of. A financial planner who makes sure that we save taxes. I talk to a CPA who is known, who knows the M&A process because there are many different aspects where you can save millions of dollars if you're doing it right, but you can also lose millions of dollars as a net proceed later on if you're not doing it right. That's right. So and that needs to be looked at. In the beginning, as soon as possible, not at the end, so that you could put some measures in place that actually make sure that a business owner receives the most what he can do. So, and that's how I work. And then of course, I'm helping, I market the business, I do the vetting. Is it a buyer, for example, who has funds available or not? What's the background? See if it is a fit for the the seller. I'm hosting introductions with the seller and the buyer so that they get to know each other. I work with the due diligence process. It does not go always just one way. I have to say, business owners don't know that it goes both ways. The business owner should. If he sells the business to someone, he should know what the buyer, who the buyer is, and are they capable of because you built a legacy, right? You built a legacy. It's a huge step. And then also, yeah, helping you through the whole process until the business is sold. And one major thing is, and that's actually in the beginning, I really have to mention it. Is the business owner not just from the business point of view ready to sell it? Is he personally ready to sell it? Let's see, all of a sudden you sold the business and your wife said, what are you doing here if you sold the business every day? Uh, so it needs to be, it's a, it's a holistic approach.

Yeah.

And to talk to a business owner and, uh, maybe to the spouse too, What are you going to do after you want to sell it? Right? You want to play golf. You want to travel. You want to play with the grandkids. You want to meet them more often. I had different motives over the years. Some people, they sold their house. They bought an Airstream, and then they took off, traveled what they have not done in the past. And there are some other motives, right? So that they can. So I look at all these different areas. And, and see that the business owner who's really running the business and build it from scratch and running it successful, that he gets at the end the most out of it, and that he sees that the legacy is actually continuing. Yeah.

Well, for folks that have been listening and are liking what they're hearing, and they're like, yeah, maybe, maybe I'm not necessarily thinking about selling tomorrow. But I do want to do the things that would make my business more valuable and maybe even make the process of running the business more enjoyable, what's the best way for them to get in touch with you?

Yeah, I mean, I have a website called magnusbusinessgroup.com. You can search for me on LinkedIn. You can also send me an email at lutz@magnusbusinessgroup.com. You can call me anytime, and I also have, and it's there is no obligation to it. You know, we have a conversation and see where what what is the best fit. What what you can do, and that's at no cost at all. I have a kind of a questionnaire or let's say a survey. It takes 15 to 20 minutes online to go through it. 35 questions, multiple choice, and you get a report that actually shows you in what area you, you are really good and in what area you can improve. It gives you kind of a score, like, like think about the credit score, you know, if you have 800 and up, you are excellent. Um, and this gives you the same score if you are a little bit Let's say it's 700 or 600. It also gives you the scores. Okay, there are areas where you can improve. So that's actually what I can offer. And if you go on my website, you can click on that, put your name in it, and then you can, you get lead right into that survey if you want.

Fantastic. What a great resource. Well, Lutz, thank you so much for taking the time to join us today. I know I've learned a lot. I'm sure our audience has as well.

Yeah, thank you for having me, Mark. And yeah, I appreciate it. It was a very, very nice talking to you and looking forward to the next one.

All right, talk to you soon.

Talk to you soon. Bye-bye.

Thank you for joining this episode of the B2B Growth Blueprint podcast. We hope you've gained insights to grow your business. If you enjoyed this discussion, Please rate, comment, like on your favorite platform, and share to others who will find it useful. Do you know a CEO, founder, or leader at an early-stage B2B services, tech, or SaaS company who would like to be a guest and share their story? Send us a note. Let's schedule a conversation.