Mastering the Basics: Building a Profitable & Sustainable Business with John Matthews of Gray Cat Enterprises

In this episode of You Don’t Know What You Don’t Know, we sit down with John Matthews, founder of Gray Cat Enterprises, to explore the “table stakes” every small business owner must have in place before chasing big marketing campaigns or the latest AI tools. Drawing on decades of experience leading billion-dollar divisions and two decades as an independent consultant, John shares practical strategies for dissecting your profit and loss statement, creating a local store marketing plan, managing time effectively, and building strong client relationships that last decades.

We discuss why less than 10% of owners write a real business plan, how preparation unlocks opportunity, and why mastering the fundamentals is your best defense against wasted time and money. John also opens up about his entrepreneurial journey—how he transitioned from corporate executive to trusted advisor across multiple industries, how he built credibility from scratch, and why lifestyle freedom is as important as financial success. Whether you’re running one store or building an empire, this conversation is packed with actionable insights to help you create a sustainable, profitable, and enjoyable business.

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John Matthews Bio:

John Matthews is the Founder and President of Gray Cat Enterprises, Inc. a Raleigh, NC-based management consulting company.  Gray Cat specializes in strategic project management and consulting for multi-unit operations; interim executive management; and strategic planning.  Mr. Matthews has over 30 years of senior-level executive experience in the retail industry, involving three dynamic multi-unit companies. Mr. Matthews experience includes:

* President of Jimmy John's Gourmet Sandwiches

* Vice President of Marketing, Merchandising, Corporate Communications, Facilities and Real Estate for Clark Retail Enterprises/White Hen Pantry

* National Marketing Director at Little Caesar's Pizza! Pizza!

Gray Cat Company Website: http://www.graycatenterprises.com/

LinkedIn profile: https://www.linkedin.com/in/john-matthews-00253a/

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About Steven Denny: Steven Denny co-founded Innovative Business Advisors in 2018 and serves as a Managing Member of the firm. Steve has been actively engaged in M/A activities in a wide variety of industries for the last 14 years and has developed specific products to assist clients in growing their profitability and enterprise value. His specialty is working with established private companies in the lower middle market with annual revenues from $1 – 50 million.

Thanks for listening to our You Don't Know What You Don't Know podcast! To sign up for podcast updates or to recommend a guest for our podcast, click here.

Transcript

0:02  
Welcome to the You Don't Know What You Don't Know Podcast, by Innovative Business Advisors. Successful business owners who have started, grown and led businesses share their journey and direction for the benefit of those traveling the same path. So welcome to the You Don't Know What You Don't Know Podcast. This is where we engage in conversations with successful business owners to learn the little things that make the journey of building their companies special. Today we're honored to have John Matthews with us. John is the founder and president of Gray Cat Enterprises. Gray Cat is a Raleigh, North Carolina based management consulting company, and John specializes in strategic project management and consulting for multi unit operations, primarily in the retail space. He also does interim executive management and strategic planning for companies. He's got over 30 years of experience in this space with senior level executive experience. I will let our listeners note here. John was the president of Jimmy John's gourmet sandwiches, so probably everybody in North America is very familiar and in love with Jimmy John's. John led that company as president for many years, and has also been with a couple of other major retail organizations. So John, we're excited to have you this morning. The one thing we know for sure is that retail is not going to go away with AI. People still love to get out and shop, don't they? Oh, absolutely, absolutely. And you know what? You got to have your ducks in a row as a retailer before you can even use the tools of AI. And I think it's, it's kind of like the shiny penny right now, everyone wants to chase it, but if you don't have good customer service, and you're, you know, taking care of your operations, you know it's one thing to use all these tools to get people to come in, and then they realize that you're out of stock, that doesn't really help you. So you got to make sure you've got your operations in place, your marketing in place, good customer service and AI should just be considered an additive tool to your toolbox. Well, you've developed some pretty amazing stuff, and you've got an unparalleled track record of growth within the retail space. Tell us a little bit more about what makes your business special and different than others within your space.

2:26  
Well, it's, I do have a unique background. I was very fortunate in my corporate days to be with three high growth companies. I started with Little Caesars. And when I tell this story, Steve, that when I started with 1300 stores, and five years later, we had 5000 stores. And if you think about the growth there, I went from a manager trainee in the store, you know, learning how to make pizzas, to five years later, I was the National Marketing Director, and I had 1600 stores. So it was clearly the mail room to, you know, a guy that you know is flying to 35 different markets throughout the country and and so, you know, when you do the math, we opened up, literally, a store and a half a day. I mean, that's, that's the, that type of growth. And so that experience, combined with, when I went over to the convenience store chain Clark Retail Enterprises, we had 800 stores. We quickly went to 1400 stores through acquisition, and then at Jimmy John's, when I was there, we doubled the size of the company. You know, you get used to knowing that what you're doing today has to change six months, a year, two years down the road for you to be able to manage that type of growth. And one of the things that makes me unique is I actually get hired by private equity companies to work with some of their high growth companies and work with their CEOs, and I give them a peek around the corner like, you know what? You're at 10 locations today, at 50 locations. These are the issues that are going to start to pop up, and you need to start thinking about how we're going to address those today and so on and so forth. So it, I guess I bring a unique perspective, because I was fortunate enough to be involved in those companies that had high growth track records, and the problems are completely different when you go from 10 locations to 50 locations, as you talked about, yeah, absolutely. And the funny thing is, is especially like in franchise organizations, where the franchisor is trying to grow, and one of the ways they grow is they get franchisees, they give them a franchise fee. And, you know, maybe they're based in Michigan, but this guy wants to open up stores in Arizona, and another guy wants to open up stores in Montana, and you're kind of going, we got to take this money, because this is going to help fuel our growth. But then when the dust settles, you realize you got, you know, 47 stores in 19 different states, and you can't manage your distribution. You can't manage your operations. You have no brand presence from a marketing standpoint, because you're everywhere and nowhere. And so it's, those are the challenges that that I try to at least coach some of the CEOs that I work with to say, there's growth and there's smart growth, and we want to focus in on smart growth. 

5:18  
When you talk about smart growth, so one of the things I'm hearing there is, do you build out a market first before you then jump to other markets or or is there a, is there a secret formula that you put in play there? Yeah, it's the contiguous model is the preferred model. Because you got to think about it from a distribution standpoint. At Jimmy John's, when I first joined there. We had 13 different distributors throughout the United States, and Jimmy wanted to introduce Jimmy chips, which is a proprietary Jimmy chip, which is a great idea. The problem is, is that in our Illinois locations, where we had a number of stores, we could get those chips for, yeah, we could get those chips for 30 cents, maybe. And I'm making these numbers up, but the guy in Utah was paying 70 cents for the same chip, and then he only had a couple of locations and the minimum order was a truckload. Well, by the time he got a truckload in at double the price, he couldn't sell enough chips to get rid of it before they expire. And so those are the growth and scaling challenges that you face, not to mention that we had one operations guy have to fly specifically to Utah to go look at his two locations, you know. And so there's cost and expense and time of one of our operational staff that has to do it, as opposed to the guy in Illinois who could drive around in an hour and probably see a dozen stores.

6:47  
Well in your own business at Gray Cat Enterprises, what are you most proud of these days? What, what, how would you, how would you, share that with our audience and tell us a little bit about how you made that happen. You know, probably the thing that makes me most proud, Steve, is that I've been doing this for 21 plus years and still alive and still thriving and still kicking, and it's the longest section on my resume, if you want to think about it. As far as tenure, it's, it's exciting to me that I've been able to maintain it. And I tell the story that when I first started, I was two months into it. I, I sat down with one of my former colleagues who had branched out on his own, and he said, John, I've, I've been doing this for 26 months, and I remember hearing that going, I want to do this for at least 26 months. And now it's been 20 plus years that I've been doing it, and I've been, I've been very proud of that, and the thing that is really helped me along the way is, I hate to say it, but LinkedIn has really helped. I get so much business from LinkedIn, and LinkedIn for me, back when I joined it, in 2005 broke down the geographic barriers to doing business. I was based in Chicago at the time, all of my clients were Chicago based, and then I was introduced to LinkedIn, and then all of a sudden, I could have clients in Iowa, and I could have clients in Arizona and whatever, because I had access to those folks.

8:18  
I know people listening to this today are probably laughing, kind of going, Really, you couldn't cross the state lines. But back then, prior to having that type of mechanism to do it, it was difficult to make inroads into a different state. There wasn't a way to communicate to folks saying that I could be a credible resource for you. LinkedIn has been a Godsend for me. And I'd say 90% of all my business in the last 10 years has come through either someone on LinkedIn that has read my blogs that I post out there, or connections that I have that they refer me to someone else and so on and so forth. And you've got a lot of material. You've got three books out there as well on your specialty. Yeah, so, and great material. I've been through some of it, and I highly recommend it. So people should, people should go find you on LinkedIn, connect with you and and get the benefit of reading your blogs and materials, because there's some real gold in there. Yeah. And that, to answer your, your question earlier, one of the things I did when I first started the company is I was always kind of a pack rat when it came to all of the materials that were sent to me when I was leading these divisions and everything like that. And I literally went into my laptop and jotted down all of the things that I thought people might be interested in hearing about, you know, we did an acquisition. Okay. So, how do you do an acquisition? What's involved in an acquisition? You know, we started, key performance indicators. Okay, what is a key performance indicator? So I jotted all these things down, and probably had, I know, a couple of 100 ideas to write blogs on, on and over the course of time, I've done exactly that. I've written a blog on each of these subjects, and I posted out on my website and on LinkedIn.

10:10  
It not only to educate other folks out there, but it does add credibility to what I do. And when people reach out to me after five years and they say, I've been reading your stuff every week on LinkedIn for five years. I'll be damned if I don't have a project for you now, John, you know, that makes me feel like, you know what? Maybe that's been worth it. You know, some folks are getting some, some value out of it, and now they actually have something that I can gain some value as well. 
Well, yeah, I'm sure you deliver a tremendous amount of value in the materials that are available there. So, you know, if somebody is got a couple of locations now, and they're, and they're dreaming of being a, you know, a fast growing multi unit operator, are there, are there particular bases that they gotta touch and they gotta do really well in order to be successful as they as they make that jump? Yeah, it, you know, one of the things that I put together a couple of years ago was the Gray Cat learning series, and it's on my website. So if you go to my website, Graycatenterprises.com there's 15 online courses there, and there's a handful that are for operations, there's a handful for marketing, there's some self improvement ones, and so on and so forth.

11:29  
I kind of wrote those with the guy that has one or two locations in mind, because one, they're not going to hire me for a big project. I, you know, they don't have the, they don't need you, need for, they don't need me yet. But there's someone out there that's kind of going, one, I don't even look at my profit and loss statement. My accountant gives it to me every month. Is there a way that I can improve myself and in my daily business? And there's a 45 minute course that I walk through a profit and loss statement, giving examples of how you can easily extract $20 $50 $100 every month out of your profit and loss statement and things like that. Or I don't know how to market my location. What are some ideas? There's a local store marketing course. So that's where I would start. Make sure you got the basics. Make sure you understand your business through key performance indicators. Make sure you're managing your expenses so dissecting your profit and loss statement. Make sure you're putting your self out there. It's one thing just to open the store and unlock it every day. It's another thing to go out your two or three mile radius around your store and try to prospect customers. So a local store marketing strategy or or maybe you just don't manage your time. Well, I've got a time management course that you could take. So to me, those are kind of the the table stakes. Once you figure out all of those basics, then you can start thinking about, Oh, I want to do this social media. I want to do digital marketing. I want to do this AI thing and everything. But if you don't have the basics down, you're just going to spend money and you're not going to see any result, because someone's going to walk in and they you're not going to have the product that they want, you know, that type of thing. So get your basics down. And like I said, I have 15 of those courses on the Gray Cat learning series on my website if folks are interested in those. Do you think that's the biggest failure of the one to two store operators that they just don't have all the basics covered? Well, I think that, I don't know if it's the biggest failure, because there's a lot of things that they could probably be doing wrong and everything like that. But what I would say is, if you don't have the basics down, you're not giving yourself a fighting chance. And even though I have been in charge of damn near billion dollar divisions and stuff like that in my corporate days, the very first thing that I did when I started Gray Cat is I sat down and I wrote a 23 page business plan for Gray Cat. How am I going to make Gray Cat, you know, stick around for a year or 10 years now, 20 plus years, you know, where am I going to get my revenue from? How am I going to control my expenses? What should I charge for my services based on industry, based on experience, based on whatever, you know. How do I go out and get this business? So I came up with a marketing strategy. I put together a financial pro Quora. I could tell you exactly where I was going to spend my time. There were three or four pillars that I was going to go after business, and today, I'm basically doing all of those pillars, still, with the exception of the interim executive management, which I've added in the last 10 years, where I actually go in and run divisions or run departments on an interim basis. That's something that's kind of popped up in the last 10, 10, years that I've been doing it. But I, that was the very first thing I did in the first two weeks of Gray Cat, I spent time to write a 23 business plan that I have over my shoulder, right over here, sitting on a work or a bookshelf that would, you know, to me, that was my basic table stakes that I had to do is, how am I going to, what's my plan? What's my strategy?

15:22  
You know, it's so fascinating, because we work with business owners all the time. And I can tell you, I think there, that probably less than 10% of business owners do what you just described, sit down and really think through what their business plan is. The one thing I love working with the SBA is the SBA requires that an owner do some of that work before they'll provide funding for which the exercise, in and of itself, is powerful, absolutely powerful. So, you know, I think that's, that's probably a strong indicator of your success as you were starting out. It gave you, gave you a roadmap, right? So you had, you, and it gave you some, it gave you some guardrails as well, right? So all those things can be very, very helpful. What, what were some of the biggest challenges as you were growing your business, as you were first starting out, you know, you said, LinkedIn became your best friend. At some point, people forget what it was like to live before the internet.

16:24  
You and I've been around, we saw that. Yeah, exactly. Now, you know, the biggest challenge is, you know, people used to know me as the guy, as the VP of this, and the CMO of that, and the Chief Operating Officer of this, and then all of a sudden I'm Gray Cat, I'm this guy, and they're like, who are you? What is this? What do you do? You know? And so it's, there's, you have to check your ego at the door. And I, I know, the first two or three years, a lot of my colleagues out there kept on saying, oh, he'll be back. He'll, he's just doing this, like everyone gets into consulting, and they'll be back to the corporate world. And I just had a different path. I even, when I was interviewing at my corporate jobs, I used to tell the people I was interviewing with my plan is, you know, I am going to go out on my own. I'll do this for five or six years or whatever, and but I am planning on going out on my own. So I did have that kind of embedded in, in my brain. But that was probably the biggest thing, is the establishing some sort of credibility out there as a management and operational consultant. And then once I got a few projects under my belt, and I had some case studies, and I could show empirically that I've added value in certain situations, then it started to take a life of its own. Then I started to get people that would literally, they'd bring the puzzle, the jigsaw puzzle pieces, and throw them at me and say, here's our problem. You figure it out. And I would sit there and solve the problem. And so that's what kind of keeps me going today, is I'm a, I'm a puzzle guy, and I enjoy kind of heading out into the abyss, so to speak, to tackle, you know, various problems that that folks will bring to me and various industries. I know you introduced me as kind of a retail guy, but I'm fairly industry agnostic. Now, I've been involved in technology and healthcare and B to B and a variety of different industries, and I still have some retail as well so.

18:34  
Well, the basic building blocks of successful business are the same, regardless of the industry, right? So you know, when you focus on those building blocks it's, it's easy to transfer those skills from industry to industry I would think. What's it like to, you're, I imagine you're at the point now where you get to basically choose your work as well, right? So you have, you've been established. You're well established. You've got great credibility, outstanding track record of performance behind you, you probably have the ability to say no now, if the right opportunity comes come, you know, if the opportunity that comes your way is not the right opportunity? Yeah, that is a nice feeling. It's also a nice feeling. Like I met a woman 17 years ago on LinkedIn. I sent out a random invite. She was a Vice President at Sylvan Learning Centers, and we had a nice chat. I think this was in the fall, 17 years ago, and I didn't hear from her for like, six or eight months, and then, like in June, she reached out to me and she says, you know, our guy just isn't working. I know we've never met in person. I liked our chat. I really don't have time to vet anyone else. Are you interested? I'll give you a project. And I said, Sure. And Michelle and I have established this relationship and friendship that after she left Sylvan, she went over to a company called Deluxe. She brought me into Deluxe. I have been working with Deluxe. They're my longest running client right now. Michelle left Deluxe and went someplace else. I'm working for her in that other place and Deluxe, because I had been there for so long and under her tutelage, so to speak, in introductions, I got to know so many people there that they've kept me on after she left four years ago. So I have established enough, you know, credibility within that organization that they, they keep renewing my agreement, and Michelle and I continue to become great, we, I mean, we've known each other now for 17 years, and it's just so, it's that type of relationship that I love working with her. She always gives me challenging projects. She's the one that's in the healthcare industry now, and so this is a new industry for me, and it's been exciting. And so it is kind of cool to be able to feel that enthusiasm over a particular project or people that you work with, and have the opportunity to pick and choose which folks you want to work with. Yeah, it is, that is really cool. And it's, it's nice to be able to kind of pick your tribe in that regard and work together with people that you really enjoy as you think about the vision for your business in the future, right? We're, you know, a lot of people think and and profess that we're kind of at this pivot point in, in, in history, here in 2025 right? AI, the next big thing, kind of the internet of the next generation is coming in, and industries are changing substantially, right? There's a lot of, lot of interesting things on the horizon. What are some of the positive trends that you see that are happening, that people should be kind of leaning into at this point?

21:45  
From my perspective, the thing that's kind of interesting to me is I've been reached out to so much in the last 12 months by AI type of companies that know that they just can't throw a product out there without having the bones and structure to that particular product. So they, I've been reached out to to help them basically write it down on paper first, so then they could have their their AI gurus kind of convert the knowledge into a tool that actually can be used better in the marketplace. I still think, Steve, that for the next decade, there's going to be people like me that are going to provide the important insight on how things actually work out in the field and with organizations that are multi unit and the whole logistics and mechanisms of how things get done that can't simply be replaced with a tool, because it's someone's gonna, without that inner knowledge of that, someone's going to create a tool that is going to be woefully unacceptable to the people that are actually trying to implement it, and they're going to get more frustrated by it because they're not taking into account all of the, the items that have to be considered in order for this tool to replace the existing functionality. And I do think that folks like me are going to be able to provide that that working knowledge. And I can tell you this already, because I've got a handful of meetings set up in the next month on exactly this subject that people want to pick my brain to make sure that they're covering off all the bases before they go out and try to design a new tool.

23:33  
You know, it is fascinating, too. I think the, my personal view on AI is that it is the wide collection of knowledge for, you know, for an old guy like me, it's like the Encyclopedia Britannica has got every subject and every, and every viewpoint ever written on that subject at my fingertips, right? But the, but the strategy of management by walking around, or what I call leadership, by being out with the troops, you know, that's, that's, that's, that piece is never going away, that AI can never take the, can never take that away. And it seems that in the post covid world, there's a lot of that that's missing. We kind of, you know, we kind of hit this pause button during covid and, you know, customer service and basic blocking and tackling of how you run your businesses is, is, is different now than it was before, right? And it's, I think the companies that get that right, you see, are really thriving in the marketplace, and the ones that don't just seem to kind of muddle along. Well, I'll give you, I'll give you an example of a tool. You know, I told you, I get 95% of my business through LinkedIn. I really know how to work LinkedIn. I have a huge network. I put a lot of original content out there. I get a lot of people that contact me through that. And then I have colleagues that are on LinkedIn that get nothing. They get buckets. They don't put anything out there. They don't, they don't, connect with people they don't know, they have small networks and everything like that. It's the same tool, but I did all the prep work in advance to optimize the tool, and other folks haven't done anything. And so take that to the AI example. I'm going to do, if I'm going to use AI, I want to do all the prep work that's going to optimize an AI functionality far better than someone who says, Oh, look at here's an AI tool that you can buy, a Best Buy. I think I'm going to use it. And then they go, Well, this sucks. I'm not getting any value out of it, but you didn't do any of the pre work. The pre work, it's kind of like getting back to the business plan. The reason why Gray Cat is alive today, I will stand on my grave saying it is because I wrote that 23 page business plan on the first two weeks of my my endeavor.

25:49  
Yeah, it makes all the difference in the world, but proper preparation prevents poor performance, right? There you go. There you go. It all begins there. Your, your business model, I think you're right. I think you're, you're, there's always going to be a call for your business model moving forward, the maybe even more call for the, for the experts in the, in the room that have got feet on the ground, hands on experience. What do you see as as some of the, for your business moving forward, what do you see as some of the challenges that may, may lie in your future that you may have to address in that regard? Um, you know, there's only one of me. There's only so many hours that I can put towards this. And quite candidly, I'm not sure I want to work 100 hours a week, so I know that I'm going to pick and choose the projects that I want to, want to work on, and the, and the folks that I want to work with. So I, I don't, I probably don't have as many challenges because I'm at the, you know, I've been doing this for 20 years, and I have done okay. And so I can kind of pick and choose. And so my biggest challenge is just how much time do I want to spend on it, or would I rather go out and play golf on a Friday instead? You know, it's, I'm to that point where I'm okay not working, you know, as many hours as I did 10 years ago. And you know, it's, it's a good, it's a good lifestyle. And one of the things that I, if I could tell the entrepreneurs out there, is that, you know, hopefully you're going to be financially successful in what you're doing. Hopefully you're going to be able to maybe work from home, like I do. And I started my company when my kid was in seventh grade, and I never really missed a baseball game or a track meet, because I work from home, and I could manage my schedule around that. And so I had a great lifestyle, in addition to being, you know, financially able to maintain this for two decades plus. So as an entrepreneur, I would highly tout the fact that it's not just about the dollars you need, the dollars to be able to maintain what you're doing, but it's also about your lifestyle. It gives you a chance to, you know, if it's sunny outside and I don't have any pressing client stuff, maybe I go out and work in my gardens or go play golf, and then if it's raining on a Saturday, okay, maybe I'll knock out three hours worth of work. So it gives you that flexibility and that lifestyle, and it's, it's to the point where I don't think I'll ever retire from it, Steve, because that would mean I would just shut it down to nothing, and I doubt that. I'm sure there's always going to be a 10 hour a month project out there that I'll want to do, and it'll be intriguing to me, and I'll just continue to do it, or there could be a huge project that I just long to do it one more time, you know, to go out and build something that's really big, you know. And I just think it gives you a lot of flexibility, and it gives you a great lifestyle.

28:57  
Yeah, I look at Warren Buffett, right, into his, well into his 90s and doing what he loves every single day. And that's, that's how I view my world as well. And it sounds like you're, you're in the club, John, so, yeah, great to be there. Listen, well, it's Warren Buffett. And then there's, well, remember he didn't, you know his fortune was really created from the time he was 66 on. So okay, well, there you go. He had a lot of practice time. Well, listen, this has been, this has been great. How do people, how do people reach out to you, obviously, LinkedIn. So what you're, you're on LinkedIn. You're very available there again. Talk about your website, your materials that you've got. How do people, how do people access your stuff? Yeah, this, so if you do try to find me on LinkedIn, there's about 10,000 John Matthews out there. Put in John Matthews Gray Cat Enterprises, and you'll find me. And it's G, R, A, Y, enter-- cat enterprises. My website is www.graycatenterprises.com. You can sign up to get alerts on the website. You can take a look at the Gray Cat learning series. You can look at testimonials. I'm also an industry speaker, so if you're looking for someone for your event, or something like that, you'll see some clips of me speaking and a list of topics that I already have kind of in the can that I could apply to your event. And then if you want to email me, it's John.Matthews@graycatenterprises.com. Fantastic. Well, listen John, thanks so much for giving our listeners a bucket of your time today. I appreciate it very much. You're, you're making a difference out there. And just want to say, God bless you, man, and keep it up. My pleasure, Steve, thank you. All right. Take care. Take care. Bye, bye. Thank you for listening to the You Don't Know What You Don't Know Podcast. We invite you to visit www.youdontknowwhatyoudontknow.com. And sign up to receive updates on upcoming episodes. You can also let us know if you'd like to be a guest or recommend a business owner to be interviewed. Find us on LinkedIn, Facebook and YouTube, where you can like, follow, share and join our efforts. Thanks for listening. We hope you join us again.