February 18, 2025 • 28 mins
This episode covers the inspiring journey of a tech entrepreneur transitioning to the manufacturing sector, sharing valuable insights about entrepreneurship through acquisition, business readiness, and the vital role of communication. Listeners will gain practical tips on preparing for a successful business sale and fostering a thriving workplace culture.
• Exploring the transition from technology to manufacturing
• Importance of mentorship and personal background in career decisions
• Understanding the seller's perspective in the exit strategy process
• Key factors buyers consider when evaluating a business
• The need for clean financial records and separation of personal/business finances
• Critical steps for preparing a business for sale
• Insights on talent management within the manufacturing industry
• The significance of communication in leadership decisions
• Ways to run a sellable business for long-term viability
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
no-transcript.
(02:59):
So you said you were in thetechnology space before.
Tell us a little bit about therole that you played in the
technology space.
And then somehow you made thatleap from technology into I want
to buy a manufacturing shop.
So let's hear a little bitabout your journey, if you don't
mind.
Speaker 2 (03:21):
Well, you know, my earliest professional life was
as a web developer.
So I started a web-basedsoftware websites pretty much
self-taught.
That was like dot-com boom,dot-com bus days.
So when I started that, Iworked for a couple of different
(03:45):
uh agencies advertisingagencies, a sports marketing
agency, a pharmaceutical agencyso that was over many years.
And, uh, that was great.
And, uh, I had a partner that Iworked at those two companies
with, who was more of a creativeguy, and so we kind of worked
(04:07):
in tandem and we just got to apoint where like, hey, we're
pretty good at this and we knowwhat we're doing and we've got
some connections.
Now let's just do it on our own, let's go out, start our own
business.
So, um, so we did that, we.
Well, I took the, we took theuh, you know we have the kaufman
(04:31):
foundation here, uh,entrepreneurship, and they do
these at the time at least, theydid these new venture classes.
So I really didn't have anybusiness background or anything
right.
But being in a marketing uhenvironment, you just you you
learn a lot about a lot ofdifferent businesses and how
they made money so how big of ashop was the marketing team that
(04:54):
you were at before you guysstarted exploring your own
venture?
uh, the last one you know 30people, not huge so small.
Speaker 1 (05:02):
Big enough to haveable contracts, but small
enough that you're getting apiece of everything that's going
on in the business.
Speaker 2 (05:10):
Yeah, and I had a lot of experience in pitches and
you know traveling and so I waslearning business skills
alongside of doing development.
You know heads down developmentand I was also learning how to
run teams.
I eventually was, you know, hadkind of development and I was
also learning how to run teams.
Uh, I eventually was, you know,had some hiring
responsibilities.
Speaker 1 (05:29):
Um, so I was kind of developing all those skills.
Speaker 2 (05:32):
But, um, so we started this business.
We went through the new ventureprogram and that was basically
do a basic uh business plan, yep, uh.
And so we did a business planfor a little interactive agency
and once we got out of that, westarted it.
We started in my partner'sspare bedroom crammed a server
(05:56):
into the closet and starteddoing business.
That's awesome, Love it.
Paid ourselves peanuts for awhile, but eventually we started
to grow, started to hire staff.
Right before I exited, we were adozen employees in an office
(06:16):
down here in the crossroads justdown the road from KCSB
coincidentally, kcsbcoincidentally and yeah, well,
now we were 50-50 partners and Ithink we just after about nine
to ten years we just kind of hadstrategic divergence and he
(06:39):
ended up buying me out of thatcompany and took it over and so
I exited and didn't just kind ofsoftware consulting for a few
years, but I always wanted toget back into business ownership
.
I just felt like that was wheremy heart was right.
So I, you know, had started,owned and operated a agency and
(07:01):
uh, I that's where my heart was,you know.
Speaker 1 (07:05):
Yep.
Not really great working forother people, so and for some
people that they thrive in thatspace and other people, they
need to have a say in the biggerpicture for them to really feel
like they're achieving whatthey were made to achieve.
Yeah, yeah.
Speaker 2 (07:25):
I guess that's kind of where I'm at.
So I so I had exited and I wasdoing like I just started a
little software consulting.
I was just doing small projectsfor people for a number of
years.
Speaker 1 (07:38):
But at that point you're, you're still just
working a job for yourself.
It's not a company, yeah.
Speaker 2 (07:43):
It's sole proprietorship, yeah, yeah, just
working a job for yourself.
It's not a company, yeah, it'ssole proprietorship, yeah, yeah.
So I uh eventually I had one ofmy customers who was software
development manager there hadbeen a former employee said, hey
, come in, do some consultingfor us.
You know, be real flexible withyou.
(08:03):
It's like, okay, sounds good.
And then, uh, eventually theytalked me into a job.
So I did take a job, uh, but Iwas like, okay, I'm still
looking actively.
So I uh I had sold a business, Ihad started a business and sold
a business and I sort of knewlike we basically hired a
consultant to help us negotiatethe separation and the value of
(08:27):
the company and all that Yep.
But I still didn't know enoughabout just going out and buying
a business.
So I really dug into the worldof ETA, entrepreneurship through
acquisition, and it's a big one, you know.
So I just like you, you know,got all the books you know
(08:48):
there's a book by a guy namedWalker Dybul buy, then build.
Harvard Business School has abook on buying small businesses
and got into that community andjust kind of dug it.
So I started really justseriously looking at evaluating
businesses in the Kansas Cityarea.
(09:08):
I had this geographicrestriction because I had family
here.
I didn't want to move somewhereand so manufacturing was on my
list.
You have to have someflexibility if you've got this
geographic restriction.
So what could you see yourselfrunning?
You know, and I'd kind of donetechnology and software.
(09:31):
So I was I was kind of lowlooking for that, but maybe a
little different.
But manufacturing was on thelist and my father worked in
manufacturing for 40 some years.
There's a company in which dogcalled chance rides they make
amusement rides.
Okay, um, he started with themvery early on and uh, he, you
(09:56):
know, worked with them untilthey absolutely kicked him out
the door.
But he, uh, he just loved thatjob.
You know he always talked aboutit.
He started as a draftsman intheir engineering and then, you
know, eventually went throughseveral roles and then towards
(10:16):
the end of his career he wasrunning their production and I
remember visiting as a kidseeing prototype rides and I can
remember him pointing out to methese new machines they had
that would cut partsautomatically, you know, and he
was basically a CNC lathe, butyou know how amazing it was.
(10:38):
I was like, oh, that's cool.
So I just, yeah, manufacturingwas within the realm of
possibility for me.
Speaker 1 (10:46):
And I just want to pause on that for a minute,
because I think some people inmanufacturing would say that
they don't see that everyonearound them is miserable, like
it's just a bunch of blue collarworkers that hate their job and
they can't wait for Friday atfive to go home and get on with
their life.
(11:07):
I think it's so important that afundamental influence on your
view of manufacturing wassomeone who loved it so much
they couldn't stop talking aboutit even when they weren't
working.
And it's not because it doesn'tsound like it was, because your
dad always had work on hisbrain because he couldn't relax,
but he loved what he was doing.
(11:27):
And I think that I thinkleaders need to be very, very
intentional about communicatingwhat they love about what their
company does, because it's easyto get so bogged down in
production that people don'tever remember that.
(11:48):
This is an amazing thing thatwe're taking a lump of something
and turning it into adifference maker.
I don't know you telling thatstory, just it brought it to
life in a real powerful way.
I really appreciate you sharingthat.
Speaker 2 (12:02):
Yeah, yeah.
So yeah, and there's somesimilarities into the business I
had run before in this business.
So that was a essentially acustom software shop.
So people would still just cometo us and say we need this, we
(12:23):
need to make this and we had toget, we had to.
You know, there was customerservice involved, there was
estimation and you know all ofthat is very similar to how we
work.
Now, hey, I've got this part Ineed to make.
I've got to figure out what'sgoing to take us to do this part
, how long, what are all thevariables around making this
(12:47):
part so very similar to customsoftware, just it's's.
You know, yeah, bits and bytesversus pieces of aluminum or
steel, yep, um, and then all ofthe production process, the
service after production, um,and then obviously all the
regular business functions.
(13:08):
So I felt, uh, in a custom shoplike this, I felt pretty good
that it's a different world,maybe a lot to learn, uh, but I
can handle it yep, that'samazing.
Speaker 1 (13:22):
So so you went from a career to having some
independence, back into a careermode, knowing that's not where
you wanted to be, into a careermode, knowing that's not where
you wanted to be.
And then manufacturing was oneof the things on your radar and
this opportunity came up, and Iguess I'd love to shift the
conversation a little bit tobenefit those who are.
(13:45):
They may own a shop and theythink you know what, someday I'm
going to want to get out ofthis, or or maybe they're
thinking about retirement now,or maybe they're like you know
what.
I've been running this shop for14 years and I just need
something different in my lifeand they're wanting to sell it.
With you being a year and ahalf out from this acquisition
process that you were goingthrough.
(14:06):
What would you tell that guythat's thinking about their exit
strategy?
Someone like you is looking forand you don't speak for
everyone, but to the extent thatyou can share your journey,
what do sellers need tounderstand about it?
Speaker 2 (14:26):
Well, you can go out and if you do some research on
the ETA community, you'll seelists of things you know.
Here's what you have to have ityou know here's what buyers are
looking for.
So that information is out there.
So do some research.
But you're looking forsomething with a good track
(14:48):
record, a steady track recordand, of you know, like growth
and revenue.
You might have a specificrevenue target you're looking
for, but you know that's veryimportant and you need to have
clean financial records.
That's one that's pretty key,like you have to be using
(15:12):
QuickBooks or some financialsoftware where you can produce a
P&L or a balance sheet and youhave to have those ducks in a
row.
And you have to have yourfinances personal finances
separated from your businessfinances.
So, as buyer, when I wasevaluating a business, if I saw
(15:39):
like this seller's personalfinances are completely
intertwined with this business'sfinances, that was a big red
flag, because what I'm trying todo is figure out how healthy is
this business as far as itsability to generate cash and
profit?
And if I can't sort that out,that's bad.
Speaker 1 (16:04):
One thing I'd like to talk about that because a lot
of small shop owners don't fullyunderstand this that if you
don't pay yourself um, I'mtrying to think this through if,
if you don't pay yourself outof the profitability, you're
actually needing to look at yourrole as an employee, and if you
(16:26):
leave the company, that moneythat you are making needs to go
to someone else to run thecompany, who will hopefully run
it for the price that you aremaking, needs to go to someone
else to run the company who willhopefully run it for the price
that you're paying yourself andnot underpriced if you're paying
yourself less than you make.
So for a person to say, hey, Imake X amount of dollars and I
(16:47):
have this level of profitabilitysometimes we distort those
numbers because a lot of peoplewhat they'll do is they'll say
they were this much profitable,but they don't pay themselves
any money.
And I think the reallyimportant things to understand
is you've got to know where yourmoney's coming from, and
(17:08):
whoever is buying the companyneeds to understand.
So how are you getting paid outof this deal?
Are you on the payroll or areyou just taking a little draw?
And what does that do to theprofitability of the company?
Speaker 2 (17:19):
Yeah you really should be paying yourself a
market value salary out of thecompany.
The company should be able tobear that.
If not, you need to get it intothat shape, and that's probably
another key piece of advice isif you are wanting to exit, the
(17:42):
time to start getting the ducksin a row is now.
It takes time.
Do need to get your funds andfinancial statements together.
If you do need to talk to abusiness broker, uh, do that
really early rather than waiting.
Speaker 1 (17:59):
It's only going to create stability for your
company.
I mean, even if you're notselling for eight years, oh gee,
you got it done six years early.
Now you have to run yourcompany on good books for six
years, that's only your company.
Speaker 2 (18:11):
It's not-.
Speaker 1 (18:12):
Exactly.
Speaker 2 (18:13):
Yeah, that business.
And I highly recommend going toa business broker and having
that discussion because they can.
They're the experts that cantell you here's what you need to
do to look attractive.
They'll tell you, hey, you needto start taking a salary out
because a buyer's going to lookat that.
(18:34):
You need to start separatingout your finances from the
business.
Maybe you need to take a yearor two to get your revenue on a
growth track and you're lookingat there's different ways to
judge the value of a business,but usually it's some multiple
(18:55):
of EBITDA, which is acalculation you do from your P&L
and it's, I would say,generally a measure of your
company's ability to produceprofit.
And so they can help you walkthrough that and tell you what
your EBITDA is and what you cando to improve it.
(19:17):
but you also you know I wouldn'thave come into this shop if I-
didn't know there was a goodstaff in place, like if I had to
come in and be the guy runninga machine, I wouldn't have
pulled the trigger because I'mnot a machinist.
So you need to make sure that anew buyer can come in and have
(19:39):
a reasonable expectation thatthey don't have to step right
into that job, be the technicalexpert if they don't have that
expertise.
Speaker 1 (19:49):
Yeah, that's great and I think you also need to if
you're looking to sell.
You need to minimize theday-to-day operations role that
you play in your company as muchas you can so that there's not
that void that occurs when youleave and a lot of tribal
knowledge goes.
I mean, every ownership's gonnaleave with tribal knowledge,
(20:09):
but you need to minimize thatimpact as much as possible and I
I encourage people thinking ofgrowing a company they can sell.
Take time off, get away fromyour company for a while so that
you can prove that this thingcan run three weeks without me
and I'm not on my phone all day,every day down.
(20:29):
Yeah, that is really key.
Speaker 2 (20:32):
Everything I looked at, I thought is this person so
key to this business that theycan't be separated from it
successfully?
And if I didn't think I couldstep in and keep the business
going once this person walkedout.
It was a hard no.
Speaker 1 (20:49):
Yeah.
Speaker 2 (20:49):
So you got to get yourself in that position.
Speaker 1 (20:52):
Man, such great insights.
I really appreciate you,especially since you're so new
into the industry.
I appreciate you just lettingus crack open your brain for a
little bit just to understandthat You've got great wisdom and
I appreciate your ability toarticulate that journey.
So anything else you'd want tosay to that person who is
(21:13):
thinking of selling theirbusiness in the next two to 10
years?
Speaker 2 (21:20):
Well, there's a good book called Build to Sell.
Go read that.
And this is not just for peoplelooking to sell, but also
people maybe that are operating,looking to buy a business.
You need to operate it, even ifyou're never going to sell that
(21:40):
business right, or you don'tintend to sell it for a long
time.
You need to run it as if youwant to sell it right, as if
you're putting somethingtogether to be sellable because
that is good for your business,to run it in that way.
You know, yeah, it's beneficialto you to run it with that
(22:02):
attitude, because you'll createa healthy business, yeah, so
there's another great book outthere called who, not how.
Speaker 1 (22:08):
Uh, or you're looking to hire people, not how do you
figure this out?
And if your solutions arethrough the people you surround
yourself with, then you'rebuilding a viable company that's
not dependent on you as the the, the linchpin of the whole
organization.
Yeah, that's another one.
Speaker 2 (22:28):
That's tough because you you want to be stepping in
and take care of things or notspend that money on that person
or that consultant or whatever.
Speaker 1 (22:39):
Man, I have a feeling we could talk for another 20
minutes easily, or two hourseven, on some of these stuff.
You've got some great insightsand stuff.
One of the things I like to dowith my guests is what I call
the speed feed round, where Ijust throw you some questions
and you give me your initialresponse to it.
Are you comfortable doing that?
Uh, sure, maybe comfort's notthe, maybe that's well big news
(23:02):
around here, of course, chiefsgoing to the Super Bowl.
So if you could, you're shakingyour head.
That's not your dream come.
Speaker 2 (23:09):
I'm like I can't believe it.
You know, I mean I just can'tbelieve it.
I'm a long-suffering Chiefs fan, right, right, I mean, you know
, somebody listen to this, ifyou know.
Like you know, I went to theTyler Thigpen days.
Speaker 1 (23:24):
Like I just can't.
You endured the 90s, Some ofthe 90s were great, but when the
Chiefs and and when we kept theguys were great, but when the
chiefs kept grabbing hold of49ers, quarterbacks and anyone
that could, and it just wasn'tworking out right.
Well, so if you could go to theSuper Bowl with anybody, who
(23:45):
would you pick to go to?
Speaker 2 (23:48):
Oh go to the Super Bowl with anybody.
Well, you know, I would have topick my girlfriend because
she'd kill me if I went withanybody else.
Let's say I was forced to gowith, you know, somebody other
than a per or a close personalfriend.
Jeez, you know, I'll just sayHerm Edwards, because he's a
(24:14):
former Chiefs coach and he's ait seems like a pretty.
He's a kind of a funny guy.
You might be entertaining tosit there and watch a Chiefs
Super Bowl with.
Speaker 1 (24:23):
I like that.
I like that one.
That's a good one, all right.
So for those early morning daysat the shop, what do you do for
energy drink?
Are you a coffee guy?
Do you do any energy drinks?
What are we going to see youholding in the mornings?
Speaker 2 (24:37):
Oh, definitely coffee , and I'm like a big, stupid
thermos guy.
Okay, so I come in with mycoffee and my kids like to make
fun of me because I have thisridiculous thermos that I carry.
I love it All right.
Speaker 1 (24:53):
So what, in your opinion, is the greatest threat
to manufacturing?
Speaker 2 (24:58):
Greatest threat to manufacturing Right now.
Uh, right now, um, it's got tobe talent, you know.
It's got to be having havingthe right people, you know.
(25:31):
Uh, there's things thatmanufacturing is going to do to
get around this talent issue,and that's automation and
technology.
No matter how much you automateit, you're still going to need
very talented people to work inmanufacturing, and that's a big
problem, right?
Speaker 1 (25:41):
now?
Yeah, really good insights.
So what is the most importantleadership tool in your tool
belt?
What do you think is the mostcritical thing you've learned
about leadership that you haveto use?
Speaker 2 (26:08):
you can't communicate enough.
Yeah, that's great.
I wish you know I need to bebetter.
We all need to be better.
Talk, talk to your people, letthem know what's going on.
Speaker 1 (26:12):
Don't don't leave mysteries and that's whether you
have a 40 year old guy or a 40year veteran or a 15 year
veteran or someone who's brandnew to your company.
Speaker 2 (26:20):
That communication is important yes, and if I had to
pick a number two, it'd probablybe just healthy humility.
Speaker 1 (26:27):
Yeah, love that Great insight.
What's one thing that we didn'ttap on today that you would
love just to dive in deeper, toshare just some of your opinions
on, if we had more time?
Speaker 2 (26:43):
Oh boy, I don't know, that's a tough one, you know.
Maybe you know big mission ofmine is to grow and to scale and
it's difficult, especially witha small shop.
So you know that's probably abig topic.
Yeah, you know it's on my minda lot and is a big challenge
(27:11):
that I'm thinking aboutconstantly.
Speaker 1 (27:13):
Love it, and so I'd encourage people that if they
see you at an upcoming NTMAevent or any of the networking
events, and if they wanted tocontinue that conversation,
you'd probably be interested incontinuing that conversation.
Speaker 2 (27:27):
Oh, absolutely.
Speaker 1 (27:28):
All right, love it.
So if people wanted to find you, brandon, would they go to
kcspmachinecom.
Speaker 2 (27:36):
Yeah, there's a.
There's contact form there.
My email is Brandon atkcspmachinecom.
That's the quickest way to geton me.
I don't really do Twitter.
I am on LinkedIn.
You're welcome to look me upthere and connect.
Speaker 1 (27:52):
Very good.
Hey, this has been outstanding.
I really appreciate you givingus some time today and just
sharing some of your journey inmanufacturing and some of the
wisdom you've had from a careerof leadership, and it's cool to
see you applying those skillsets in your new context.
So thanks again for being here.
Speaker 2 (28:10):
Well, thank you very much for the kind words.
I appreciate it.
It's been great.
Speaker 1 (28:13):
All right, man Take care, all right.
no-transcript.
(02:59):
So you said you were in thetechnology space before.
Tell us a little bit about therole that you played in the
technology space.
And then somehow you made thatleap from technology into I want
to buy a manufacturing shop.
So let's hear a little bitabout your journey, if you don't
mind.
Speaker 2 (03:21):
Well, you know, my earliest professional life was
as a web developer.
So I started a web-basedsoftware websites pretty much
self-taught.
That was like dot-com boom,dot-com bus days.
So when I started that, Iworked for a couple of different
(03:45):
uh agencies advertisingagencies, a sports marketing
agency, a pharmaceutical agencyso that was over many years.
And, uh, that was great.
And, uh, I had a partner that Iworked at those two companies
with, who was more of a creativeguy, and so we kind of worked
(04:07):
in tandem and we just got to apoint where like, hey, we're
pretty good at this and we knowwhat we're doing and we've got
some connections.
Now let's just do it on our own, let's go out, start our own
business.
So, um, so we did that, we.
Well, I took the, we took theuh, you know we have the kaufman
(04:31):
foundation here, uh,entrepreneurship, and they do
these at the time at least, theydid these new venture classes.
So I really didn't have anybusiness background or anything
right.
But being in a marketing uhenvironment, you just you you
learn a lot about a lot ofdifferent businesses and how
they made money so how big of ashop was the marketing team that
(04:54):
you were at before you guysstarted exploring your own
venture?
uh, the last one you know 30people, not huge so small.
Speaker 1 (05:02):
Big enough to haveable contracts, but small
enough that you're getting apiece of everything that's going
on in the business.
Speaker 2 (05:10):
Yeah, and I had a lot of experience in pitches and
you know traveling and so I waslearning business skills
alongside of doing development.
You know heads down developmentand I was also learning how to
run teams.
I eventually was, you know, hadkind of development and I was
also learning how to run teams.
Uh, I eventually was, you know,had some hiring
responsibilities.
Speaker 1 (05:29):
Um, so I was kind of developing all those skills.
Speaker 2 (05:32):
But, um, so we started this business.
We went through the new ventureprogram and that was basically
do a basic uh business plan, yep, uh.
And so we did a business planfor a little interactive agency
and once we got out of that, westarted it.
We started in my partner'sspare bedroom crammed a server
(05:56):
into the closet and starteddoing business.
That's awesome, Love it.
Paid ourselves peanuts for awhile, but eventually we started
to grow, started to hire staff.
Right before I exited, we were adozen employees in an office
(06:16):
down here in the crossroads justdown the road from KCSB
coincidentally, kcsbcoincidentally and yeah, well,
now we were 50-50 partners and Ithink we just after about nine
to ten years we just kind of hadstrategic divergence and he
(06:39):
ended up buying me out of thatcompany and took it over and so
I exited and didn't just kind ofsoftware consulting for a few
years, but I always wanted toget back into business ownership
.
I just felt like that was wheremy heart was right.
So I, you know, had started,owned and operated a agency and
(07:01):
uh, I that's where my heart was,you know.
Speaker 1 (07:05):
Yep.
Not really great working forother people, so and for some
people that they thrive in thatspace and other people, they
need to have a say in the biggerpicture for them to really feel
like they're achieving whatthey were made to achieve.
Yeah, yeah.
Speaker 2 (07:25):
I guess that's kind of where I'm at.
So I so I had exited and I wasdoing like I just started a
little software consulting.
I was just doing small projectsfor people for a number of
years.
Speaker 1 (07:38):
But at that point you're, you're still just
working a job for yourself.
It's not a company, yeah.
Speaker 2 (07:43):
It's sole proprietorship, yeah, yeah, just
working a job for yourself.
It's not a company, yeah, it'ssole proprietorship, yeah, yeah.
So I uh eventually I had one ofmy customers who was software
development manager there hadbeen a former employee said, hey
, come in, do some consultingfor us.
You know, be real flexible withyou.
(08:03):
It's like, okay, sounds good.
And then, uh, eventually theytalked me into a job.
So I did take a job, uh, but Iwas like, okay, I'm still
looking actively.
So I uh I had sold a business, Ihad started a business and sold
a business and I sort of knewlike we basically hired a
consultant to help us negotiatethe separation and the value of
(08:27):
the company and all that Yep.
But I still didn't know enoughabout just going out and buying
a business.
So I really dug into the worldof ETA, entrepreneurship through
acquisition, and it's a big one, you know.
So I just like you, you know,got all the books you know
(08:48):
there's a book by a guy namedWalker Dybul buy, then build.
Harvard Business School has abook on buying small businesses
and got into that community andjust kind of dug it.
So I started really justseriously looking at evaluating
businesses in the Kansas Cityarea.
(09:08):
I had this geographicrestriction because I had family
here.
I didn't want to move somewhereand so manufacturing was on my
list.
You have to have someflexibility if you've got this
geographic restriction.
So what could you see yourselfrunning?
You know, and I'd kind of donetechnology and software.
(09:31):
So I was I was kind of lowlooking for that, but maybe a
little different.
But manufacturing was on thelist and my father worked in
manufacturing for 40 some years.
There's a company in which dogcalled chance rides they make
amusement rides.
Okay, um, he started with themvery early on and uh, he, you
(09:56):
know, worked with them untilthey absolutely kicked him out
the door.
But he, uh, he just loved thatjob.
You know he always talked aboutit.
He started as a draftsman intheir engineering and then, you
know, eventually went throughseveral roles and then towards
(10:16):
the end of his career he wasrunning their production and I
remember visiting as a kidseeing prototype rides and I can
remember him pointing out to methese new machines they had
that would cut partsautomatically, you know, and he
was basically a CNC lathe, butyou know how amazing it was.
(10:38):
I was like, oh, that's cool.
So I just, yeah, manufacturingwas within the realm of
possibility for me.
Speaker 1 (10:46):
And I just want to pause on that for a minute,
because I think some people inmanufacturing would say that
they don't see that everyonearound them is miserable, like
it's just a bunch of blue collarworkers that hate their job and
they can't wait for Friday atfive to go home and get on with
their life.
(11:07):
I think it's so important that afundamental influence on your
view of manufacturing wassomeone who loved it so much
they couldn't stop talking aboutit even when they weren't
working.
And it's not because it doesn'tsound like it was, because your
dad always had work on hisbrain because he couldn't relax,
but he loved what he was doing.
(11:27):
And I think that I thinkleaders need to be very, very
intentional about communicatingwhat they love about what their
company does, because it's easyto get so bogged down in
production that people don'tever remember that.
(11:48):
This is an amazing thing thatwe're taking a lump of something
and turning it into adifference maker.
I don't know you telling thatstory, just it brought it to
life in a real powerful way.
I really appreciate you sharingthat.
Speaker 2 (12:02):
Yeah, yeah.
So yeah, and there's somesimilarities into the business I
had run before in this business.
So that was a essentially acustom software shop.
So people would still just cometo us and say we need this, we
(12:23):
need to make this and we had toget, we had to.
You know, there was customerservice involved, there was
estimation and you know all ofthat is very similar to how we
work.
Now, hey, I've got this part Ineed to make.
I've got to figure out what'sgoing to take us to do this part
, how long, what are all thevariables around making this
(12:47):
part so very similar to customsoftware, just it's's.
You know, yeah, bits and bytesversus pieces of aluminum or
steel, yep, um, and then all ofthe production process, the
service after production, um,and then obviously all the
regular business functions.
(13:08):
So I felt, uh, in a custom shoplike this, I felt pretty good
that it's a different world,maybe a lot to learn, uh, but I
can handle it yep, that'samazing.
Speaker 1 (13:22):
So so you went from a career to having some
independence, back into a careermode, knowing that's not where
you wanted to be, into a careermode, knowing that's not where
you wanted to be.
And then manufacturing was oneof the things on your radar and
this opportunity came up, and Iguess I'd love to shift the
conversation a little bit tobenefit those who are.
(13:45):
They may own a shop and theythink you know what, someday I'm
going to want to get out ofthis, or or maybe they're
thinking about retirement now,or maybe they're like you know
what.
I've been running this shop for14 years and I just need
something different in my lifeand they're wanting to sell it.
With you being a year and ahalf out from this acquisition
process that you were goingthrough.
(14:06):
What would you tell that guythat's thinking about their exit
strategy?
Someone like you is looking forand you don't speak for
everyone, but to the extent thatyou can share your journey,
what do sellers need tounderstand about it?
Speaker 2 (14:26):
Well, you can go out and if you do some research on
the ETA community, you'll seelists of things you know.
Here's what you have to have ityou know here's what buyers are
looking for.
So that information is out there.
So do some research.
But you're looking forsomething with a good track
(14:48):
record, a steady track recordand, of you know, like growth
and revenue.
You might have a specificrevenue target you're looking
for, but you know that's veryimportant and you need to have
clean financial records.
That's one that's pretty key,like you have to be using
(15:12):
QuickBooks or some financialsoftware where you can produce a
P&L or a balance sheet and youhave to have those ducks in a
row.
And you have to have yourfinances personal finances
separated from your businessfinances.
So, as buyer, when I wasevaluating a business, if I saw
(15:39):
like this seller's personalfinances are completely
intertwined with this business'sfinances, that was a big red
flag, because what I'm trying todo is figure out how healthy is
this business as far as itsability to generate cash and
profit?
And if I can't sort that out,that's bad.
Speaker 1 (16:04):
One thing I'd like to talk about that because a lot
of small shop owners don't fullyunderstand this that if you
don't pay yourself um, I'mtrying to think this through if,
if you don't pay yourself outof the profitability, you're
actually needing to look at yourrole as an employee, and if you
(16:26):
leave the company, that moneythat you are making needs to go
to someone else to run thecompany, who will hopefully run
it for the price that you aremaking, needs to go to someone
else to run the company who willhopefully run it for the price
that you're paying yourself andnot underpriced if you're paying
yourself less than you make.
So for a person to say, hey, Imake X amount of dollars and I
(16:47):
have this level of profitabilitysometimes we distort those
numbers because a lot of peoplewhat they'll do is they'll say
they were this much profitable,but they don't pay themselves
any money.
And I think the reallyimportant things to understand
is you've got to know where yourmoney's coming from, and
(17:08):
whoever is buying the companyneeds to understand.
So how are you getting paid outof this deal?
Are you on the payroll or areyou just taking a little draw?
And what does that do to theprofitability of the company?
Speaker 2 (17:19):
Yeah you really should be paying yourself a
market value salary out of thecompany.
The company should be able tobear that.
If not, you need to get it intothat shape, and that's probably
another key piece of advice isif you are wanting to exit, the
(17:42):
time to start getting the ducksin a row is now.
It takes time.
Do need to get your funds andfinancial statements together.
If you do need to talk to abusiness broker, uh, do that
really early rather than waiting.
Speaker 1 (17:59):
It's only going to create stability for your
company.
I mean, even if you're notselling for eight years, oh gee,
you got it done six years early.
Now you have to run yourcompany on good books for six
years, that's only your company.
Speaker 2 (18:11):
It's not-.
Speaker 1 (18:12):
Exactly.
Speaker 2 (18:13):
Yeah, that business.
And I highly recommend going toa business broker and having
that discussion because they can.
They're the experts that cantell you here's what you need to
do to look attractive.
They'll tell you, hey, you needto start taking a salary out
because a buyer's going to lookat that.
(18:34):
You need to start separatingout your finances from the
business.
Maybe you need to take a yearor two to get your revenue on a
growth track and you're lookingat there's different ways to
judge the value of a business,but usually it's some multiple
(18:55):
of EBITDA, which is acalculation you do from your P&L
and it's, I would say,generally a measure of your
company's ability to produceprofit.
And so they can help you walkthrough that and tell you what
your EBITDA is and what you cando to improve it.
(19:17):
but you also you know I wouldn'thave come into this shop if I-
didn't know there was a goodstaff in place, like if I had to
come in and be the guy runninga machine, I wouldn't have
pulled the trigger because I'mnot a machinist.
So you need to make sure that anew buyer can come in and have
(19:39):
a reasonable expectation thatthey don't have to step right
into that job, be the technicalexpert if they don't have that
expertise.
Speaker 1 (19:49):
Yeah, that's great and I think you also need to if
you're looking to sell.
You need to minimize theday-to-day operations role that
you play in your company as muchas you can so that there's not
that void that occurs when youleave and a lot of tribal
knowledge goes.
I mean, every ownership's gonnaleave with tribal knowledge,
(20:09):
but you need to minimize thatimpact as much as possible and I
I encourage people thinking ofgrowing a company they can sell.
Take time off, get away fromyour company for a while so that
you can prove that this thingcan run three weeks without me
and I'm not on my phone all day,every day down.
(20:29):
Yeah, that is really key.
Speaker 2 (20:32):
Everything I looked at, I thought is this person so
key to this business that theycan't be separated from it
successfully?
And if I didn't think I couldstep in and keep the business
going once this person walkedout.
It was a hard no.
Speaker 1 (20:49):
Yeah.
Speaker 2 (20:49):
So you got to get yourself in that position.
Speaker 1 (20:52):
Man, such great insights.
I really appreciate you,especially since you're so new
into the industry.
I appreciate you just lettingus crack open your brain for a
little bit just to understandthat You've got great wisdom and
I appreciate your ability toarticulate that journey.
So anything else you'd want tosay to that person who is
(21:13):
thinking of selling theirbusiness in the next two to 10
years?
Speaker 2 (21:20):
Well, there's a good book called Build to Sell.
Go read that.
And this is not just for peoplelooking to sell, but also
people maybe that are operating,looking to buy a business.
You need to operate it, even ifyou're never going to sell that
(21:40):
business right, or you don'tintend to sell it for a long
time.
You need to run it as if youwant to sell it right, as if
you're putting somethingtogether to be sellable because
that is good for your business,to run it in that way.
You know, yeah, it's beneficialto you to run it with that
(22:02):
attitude, because you'll createa healthy business, yeah, so
there's another great book outthere called who, not how.
Speaker 1 (22:08):
Uh, or you're looking to hire people, not how do you
figure this out?
And if your solutions arethrough the people you surround
yourself with, then you'rebuilding a viable company that's
not dependent on you as the the, the linchpin of the whole
organization.
Yeah, that's another one.
Speaker 2 (22:28):
That's tough because you you want to be stepping in
and take care of things or notspend that money on that person
or that consultant or whatever.
Speaker 1 (22:39):
Man, I have a feeling we could talk for another 20
minutes easily, or two hourseven, on some of these stuff.
You've got some great insightsand stuff.
One of the things I like to dowith my guests is what I call
the speed feed round, where Ijust throw you some questions
and you give me your initialresponse to it.
Are you comfortable doing that?
Uh, sure, maybe comfort's notthe, maybe that's well big news
(23:02):
around here, of course, chiefsgoing to the Super Bowl.
So if you could, you're shakingyour head.
That's not your dream come.
Speaker 2 (23:09):
I'm like I can't believe it.
You know, I mean I just can'tbelieve it.
I'm a long-suffering Chiefs fan, right, right, I mean, you know
, somebody listen to this, ifyou know.
Like you know, I went to theTyler Thigpen days.
Speaker 1 (23:24):
Like I just can't.
You endured the 90s, Some ofthe 90s were great, but when the
Chiefs and and when we kept theguys were great, but when the
chiefs kept grabbing hold of49ers, quarterbacks and anyone
that could, and it just wasn'tworking out right.
Well, so if you could go to theSuper Bowl with anybody, who
(23:45):
would you pick to go to?
Speaker 2 (23:48):
Oh go to the Super Bowl with anybody.
Well, you know, I would have topick my girlfriend because
she'd kill me if I went withanybody else.
Let's say I was forced to gowith, you know, somebody other
than a per or a close personalfriend.
Jeez, you know, I'll just sayHerm Edwards, because he's a
(24:14):
former Chiefs coach and he's ait seems like a pretty.
He's a kind of a funny guy.
You might be entertaining tosit there and watch a Chiefs
Super Bowl with.
Speaker 1 (24:23):
I like that.
I like that one.
That's a good one, all right.
So for those early morning daysat the shop, what do you do for
energy drink?
Are you a coffee guy?
Do you do any energy drinks?
What are we going to see youholding in the mornings?
Speaker 2 (24:37):
Oh, definitely coffee , and I'm like a big, stupid
thermos guy.
Okay, so I come in with mycoffee and my kids like to make
fun of me because I have thisridiculous thermos that I carry.
I love it All right.
Speaker 1 (24:53):
So what, in your opinion, is the greatest threat
to manufacturing?
Speaker 2 (24:58):
Greatest threat to manufacturing Right now.
Uh, right now, um, it's got tobe talent, you know.
It's got to be having havingthe right people, you know.
(25:31):
Uh, there's things thatmanufacturing is going to do to
get around this talent issue,and that's automation and
technology.
No matter how much you automateit, you're still going to need
very talented people to work inmanufacturing, and that's a big
problem, right?
Speaker 1 (25:41):
now?
Yeah, really good insights.
So what is the most importantleadership tool in your tool
belt?
What do you think is the mostcritical thing you've learned
about leadership that you haveto use?
Speaker 2 (26:08):
you can't communicate enough.
Yeah, that's great.
I wish you know I need to bebetter.
We all need to be better.
Talk, talk to your people, letthem know what's going on.
Speaker 1 (26:12):
Don't don't leave mysteries and that's whether you
have a 40 year old guy or a 40year veteran or a 15 year
veteran or someone who's brandnew to your company.
Speaker 2 (26:20):
That communication is important yes, and if I had to
pick a number two, it'd probablybe just healthy humility.
Speaker 1 (26:27):
Yeah, love that Great insight.
What's one thing that we didn'ttap on today that you would
love just to dive in deeper, toshare just some of your opinions
on, if we had more time?
Speaker 2 (26:43):
Oh boy, I don't know, that's a tough one, you know.
Maybe you know big mission ofmine is to grow and to scale and
it's difficult, especially witha small shop.
So you know that's probably abig topic.
Yeah, you know it's on my minda lot and is a big challenge
(27:11):
that I'm thinking aboutconstantly.
Speaker 1 (27:13):
Love it, and so I'd encourage people that if they
see you at an upcoming NTMAevent or any of the networking
events, and if they wanted tocontinue that conversation,
you'd probably be interested incontinuing that conversation.
Speaker 2 (27:27):
Oh, absolutely.
Speaker 1 (27:28):
All right, love it.
So if people wanted to find you, brandon, would they go to
kcspmachinecom.
Speaker 2 (27:36):
Yeah, there's a.
There's contact form there.
My email is Brandon atkcspmachinecom.
That's the quickest way to geton me.
I don't really do Twitter.
I am on LinkedIn.
You're welcome to look me upthere and connect.
Speaker 1 (27:52):
Very good.
Hey, this has been outstanding.
I really appreciate you givingus some time today and just
sharing some of your journey inmanufacturing and some of the
wisdom you've had from a careerof leadership, and it's cool to
see you applying those skillsets in your new context.
So thanks again for being here.
Speaker 2 (28:10):
Well, thank you very much for the kind words.
I appreciate it.
It's been great.
Speaker 1 (28:13):
All right, man Take care, all right.
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