This week, we had the pleasure of sitting down again with The MLP Group (Manufacturing Legacy Partners). We welcomed Mac McVey and Scott Ellsworth, two key members of the group, to the podcast. We dived into what The MLP Group does as a company and how they help manufacturers grow and transition their ownership.
The MLP Group is a multifaceted team of highly skilled and experienced subject matter experts. They’re dedicated to strengthening American manufacturing by facilitating the successful ownership transition of small to mid-sized manufacturers.
Collectively, they bring over 300 years of experience and expertise across all functions and aspects of a business to assure the survival of companies as they approach and transition to new ownership. Additionally, they help the company thrive, increase the owner’s value, and continue to support employees and the community. The Manufacturing Legacy Partnership is protecting the legacy of the small manufacturing supply chain in the United States.
If you’d like to contact The MLP Group, please email: michael.mcvey@clearview-mgt.com.
If you have any questions, comments, or topics you just want to hear about, please let us know. Subscribe today and help fabricate the future.
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A Guide To Selling Or Keeping Your Business With The MLP Group (Mac & Scott) – (MFGMonkey Episode 17)
In this episode, we are joined by Mac and Scott. Welcome to the show, guys. Thanks for coming in.
Thank you for having us.
This is part of the MLP group, Manufacturing Legacy Partners. We had a big group where we had a bunch of issues. I think it’s something with you guys because we have some more issues now. Our IT guy figured it out by shutting everything off and restarting it. That’s what he pays for his tattoos with. We met because of Claudia.
The three of us hit it off. I met you for breakfast afterward, and we had fun talking about manufacturing. We’ve been sitting here for 45 minutes talking about everything. We probably could have recorded what we were talking about. Thanks for coming in again. Scott, you drove up from Cincinnati. How was that?
It was all right. It’s a beautiful day out. It’s good to get out. The good news is I didn’t have to go across the bridge down into Kentucky, which I don’t think anybody’s going to be doing for a month or so now.
Why is that?
Two trucks collided on that Brent Spence Bridge, an over-and-under bridge. One had some phosphate stuff on it, a big fire, and now they’ve shut the bridge down. I-75, north to south, is the main corridor in the United States, and it’s shut down.
That’s the trip to Bourbon Land.
It’s always a choke point whenever we get on the Cumberland. We sit there for a long time.
Now, you’ll sit there forever unless you go around.
That happened now.
No, that happened 2 or 3 days ago, something like that. It’s going to be closed for almost a month. They’re thinking, while they do tests, as to whether you can even get back on the bridge.
I’m sure all that steel’s compromised. Big fire, I’m guessing.
Since you bring up fire and materials, we’re talking about manufacturing.
About The MLP Group
Tell everyone again about MLP, how you guys have found it, and why you founded it. What you guys are doing with the MLP group is passion. I see that in you guys now that you’ve run a company. You’ve been in IT, Mac, your whole life. I think that the cool thing is now that you guys have all this experience, you want to pass it on. You’ve helped people do other acquisitions. I know when we were talking at breakfast, Scott, you worked for a company. You tried to get him to do an acquisition or set up for an acquisition and he waited how many years and then when he finally was ready to sell, it was too late. He lost millions of dollars probably.
I think he still owns the business. I think that happens a lot. I guess this is what I was saying to Mac. What I see is that a lot of business owners have a passion for their business. They start that business because they love what they’re doing, and they make a difference. That’s the cool thing about manufacturing. You make a product and it’s tangible and you have it at the end of the day.
In manufacturing, you make a tangible product. At the end of the day, you can measure your success by the number of parts made and shipped. Share on XI did some work for a while doing advocacy work and there’s nothing tangible about that. What happens is that you don’t know how to measure it, but in manufacturing, we can measure things. It’s real. At the end of the day, you made X number of parts, you shipped this amount, and you did A and B. You can see that’s Italian to me.
I used to say, “It’s the only thing I know how to do. Nobody would ever hire me if we didn’t have manufacturing companies.” I know that’s not totally true but the thing about manufacturing is that if somebody’s not making something, nobody makes money. You don’t need accountants. You don’t need lawyers. You don’t need HR people. You don’t need any of that if there’s not a product somewhere in it.
The fear and the reason that we started doing this is there are trillions of dollars of manufacturing companies owned by primarily older men, and a lot of them are Boomers. I’ve met manufacturing owners who are in their 70s or 80s, even 90s. They look at “I want to get out but I never thought about it and so I never prepared for it. I never did anything to get ready.”
That’s what we want. We want to come in to help you so that you can leave, get what your business is worth, or maybe even more, and move on. Your employees get to stay employed. They have a job. You have a legacy and you have something you want to leave behind. It’s to your family, your community, and your employees. If you don’t do that or if you shut the door and you have a fire sale, nobody wins.
Responsibility To The Employees And The Community
I think that it’s bigger than the company at that point. One of the things that you brought up is it’s probably less about the owner’s family and more about all the employees’ families. That’s a responsibility that I feel as an owner you have to your employees. For us, when we have a lull in business, my responsibility is to be conservative enough in my decision-making that I’m not laying people off a month here or two months there.
Another responsibility long term is setting up the company to be sustainable so when I’m gone, it’s still running, and the people still have a job. They’re not scrambling to find something new. I have seen that with the company that I worked with. One of the owners died. They didn’t have a succession plan and there was this big turmoil and chaos for probably a month or a year or two because they ended up in a lawsuit. There was nothing done and thank God, I had moved on, but looking from the outside in, I’m like, “That’s serious stuff right there.”
To take that a little further, it’s not just the employees of the manufacturer. It’s all the others in the community that support it. The number is something like 1.8 people are employed in the community for every employee of the manufacturer.
You brought that up the last time that we talked. I thought that was an amazing statistic, the barbers and the grocery.
The housing, utilities, doctors, lawyers, and all of those things.
You look at the stories that you see about these small towns. They had a carpet company down in Georgia and that carpet company went away and the town almost vaporized.
Look at Cabela’s in Nebraska. If you look at that story and watch that Netflix, it’ll make you cringe.
Just in our own backyard, they have the story down in Moraine. Fuyao came in and bought that plant and started doing glass. It was a project recently and I think it’s on Netflix, but you see when GM left that area how that crushed the area. You think about that for these large companies and these large manufacturers. To them, you’re no more than a number.
You hear things like, “GM is laying off 10,000 people,” and it doesn’t sound like okay. That’s just a number for them.” You go to a small manufacturer that’s owned by somebody who is in the community, they’re tight in the community. Everybody knows them. “Mac, how you are doing?” You go to the coffee shop, you go to the grocery store, wherever, and all of a sudden, that business goes away. It’s very disruptive. You’re not just a number. You’re a person in the community and you should feel that.
Our objective and the reason that we got together is that we’ve got a bunch of us that feel like, “We’ve got a ton of experience.” If you look at the pictures of us, you can see there’s a lot of gray hair. We earned that rightfully by stressing out, but we can help people to transfer that business. We’re not brokering you. We don’t want to come in and help you to sell your business. That’s not it. We want to help you understand what it takes to be ready to transfer.
One thing that so many owners don’t recognize is the problem with you selling your business is you, almost inevitably. You’re in the middle of it. You are the business. If you don’t separate yourself from it, anybody who’s looking to buy your business is going to say, “The business doesn’t exist without you in it. I need you.” You’re going to say, “I’m not going to sell you the business if I have to work in it. I may as well keep it.”
I think what we want to do is we want to help those owners understand what it takes for them to be able to step back and have something that moves on, thus the legacy partnership. It’s what you leave behind. It’s about your legacy. This isn’t about anything other than how you leave your business to survive in the future.
The Biggest Challenge
What is the biggest challenge that you guys are seeing right now with what you’re doing?
Everybody understands it. Nobody wants to do it.
It’s facing the reality.
We’re not totally sure. We’ve talked to a number of folks and we hear great feedback. Everybody understands there is a huge problem coming. If it’s not here already, there’s a huge problem coming. I don’t think people yet have perceived the value of getting ready. This is probably where I think more business owners are. They’re so entrenched in the level for today that they’re not thinking about what happens tomorrow.
To me, it seems like it’s more of that. I think a lot of them aren’t even listening to the numbers. It’s not registering. It’s like, “That’s somebody else. It’s not me. It never will be me. I’ve heard these big dramas before about other things, and I just kept working, and we survived. We made it through it. This is another one of those things. We will survive.”
I don’t know that they fully understand all the potential loopholes, barriers, and things that exist out there to them passing it on to somebody. It’s like passing it on to a child. A lot of them may even think, “My kid’s going to turn around. Somebody’s kid’s going to turn around, and they’re going to want to have it.” They don’t make the statistics about those that are not success stories, the reverse, or disaster stories where kids take over, and they don’t want it, and they have no real clue as to what’s happening with it. It crashes.
There are so many things. We’ve had people talk to us about what’s the difference between what you do and performance consulting. Helping you come in and become more lean and set up a different system, processes, and on and on. They don’t realize all of the barriers that may exist to making a sale. They may be thinking “We’ve got a contract, so what? Everybody’s got contracts. We’ll be able to do this. I’ll deal with that when it comes.”
The next guy will still get to keep that contract even if I pass away or decide to leave the business to my kids. Mac, as you were talking, it made me realize that what we’re selling is a lot like life insurance or writing a will. Nobody wants to think about the end. Nobody wants to think about that period when they’re going to sell the business because that’s not fun.
Selling a manufacturing business is like life insurance or writing a will. No one wants to think about the end, but it's crucial to plan ahead. Share on XYou don’t know what’s past that, but there are all of these things that you need to know. You need to understand how much money I need to be able to live on afterward in the way that I’m used to living. What contracts and what things have to be done so that the business is going to survive from a structure standpoint and governance and all of the legal things?
What do I need to do to the operation so that I have people in place who operationally can make the business continue to operate? What about sales? If everybody knows me as the owner and I walk away, is anybody going to continue to buy from me? What about all of the cyber security and all of those things? If I have a business that is right on the edge of being picked off, people are going to look at that.
When somebody comes in to buy, you want somebody looking at your business with a buyer’s mentality and helping you get it so that it looks right. You and I have talked about building a house. I compare it a lot to selling your house. When you’re going to sell your house, you go through it, and you think about all the things that you have lived with for years.
The switch that doesn’t work that might set your house on fire or the rooms that hadn’t been painted or the places where the kids had drawn on the walls and all of that stuff. You come in and you have somebody look at it. Usually, it’s a realtor says, “You could get $100,000 for your house the way it sits right now, but if you did A, B, and C, you could get $150,000 for your house.” That’s the thing we want to be able to do. We want to help them to be able to do that.
It is interesting that you compare it to selling a home. I bought and sold a couple, and my home right now will end up selling it in the next year or two. We’re doing the exact same thing. I’m measuring if I put new windows in and siding, what is my return on my investment there? I’m a numbers nerd, so I have it in a spreadsheet, and then it’s a gamble. Am I going to hit that mark selling it, or am I going to spend $60,000 and make an extra $30,000?
What if nobody shows up? Look at all the condos that are being built in Columbus right now and apartments. What if all the manufacturers don’t do well, and they start to lay off, and Columbus 2020 tries to attract all those people in? Now they’re leaving. You can’t even sell your house.
It’s not our current environment, thank God.
The flip side of that is how much do you know about how much value putting this into my house has as opposed to somebody who’s got 30 years in real estate? Having that opinion, having somebody there, that’s what we bring to the table. We can help you with that.
That it’s awesome in the companies. I was supposed to do a show with a long-time friend of mine. We went to junior high together, Tayte French from French Oil Mill in Piqua, Ohio. She’s being groomed to take over the CEO’s seat. They’re one manufacturer that, they get it and it’s multi-generation. They’re a staple in our hometown.
If that company would go away, it would be a black eye on our hometown. They’re doing the right things to make sure that they succeed for generations. She’s excited about it. I made the mistake. I was putting together questions and I’m like, “How does it feel to be the first woman CEO leader of French Oil?” She’s like, “That’s not true.”
I forget what she told me. She’ll correct me. It was either her great-grandmother or grandmother who was president at some point. I’m like, “That’s pretty damn cool.” Especially when we look back on those generations where there were not a lot of women leaders back then and it’s cool. They’re an amazing company. I don’t know if you guys have been to their facility, but it’s impressive. There are not a lot of companies out there like French Oil that are doing the things that you guys are bringing to the table but it’s very helpful. It’s the responsibility of that company or any company to do that if they want to succeed in the future.
Making Your Business Sustainable Without You
We hear quite a bit because we’re in and out of so many factories that customers that we deal with say, “We know that this company is on the brink of going. The owner is retiring and we don’t know what their plan is. We’re trying to find a second source because we aren’t confident in this source.” I think that that’s so important to your sales. Your customers have to have the feeling that your company is sustainable without you. If you don’t, then you’re going to start losing those customers and your business is going to be worth less.
You’re bleeding off value.
Think about that. If you’re coming in to buy a company and you find out that the three main customers all know that the owner was going to get out one way or the other, what happens there? You’re going to go, “Tell me how solid those contracts are. Tell me how solid that business is with Mac and Dustin. Are they going to continue to buy from you?” A lot of times owners don’t know that, and they don’t think about it. It’s about how I survive today. How do we get through today? What’s today’s battle? They’re not thinking about tomorrow?
I agree with you.
Some of that moves into the arena of talent. What all do they have for talent? Where all does it exist? How far-reaching is the talent? Is the owner continually evaluating that? How many salespeople do I have? Which ones are performing, and which ones aren’t? If this one is the only one that’s performing, why is it that I’m not doing anything about the others?
We’re surviving. These guys are making it happen. To me, you constantly need to be evaluating all the players, especially when you’re talking about small manufacturing, all the players you have within that organization and what impact they are having on the whole today and the whole in the future. Are they all evaluating that at the same time?
I heard something you said about fun. You were talking about the company in Piqua. They should be looking at how we constantly make it fun. How do we constantly make this fun and exciting for all the people in here? If we have somebody that’s not doing that, maybe we should do something about it. Give them a chance. Let’s work with them. I think that in some of those organizations, they don’t. “That’s just Mac. He’ll always be the same.”
Manufacturing companies should focus on making the work environment fun and exciting for all employees, and address those who don't contribute to that atmosphere. Share on XDo you think that’s part of the problem with the next generation wanting to own manufacturing companies? I think you had said earlier that that manufacturing is not sexy. I hear that all the time. As a manufacturing nerd, I don’t buy that. When I was a kid, what we did on vacation, we went on manufacturing plant tours.
My dad owned a trucking company. We went through Kellogg’s. This was back in the day when you could go through the real factory. Not some fake made-up thing that you’re allowed to go through. We went through Kellogg’s. We went through Hershey’s. We went through all of these places that make things. Why don’t kids think this is sexy? Why don’t they want to buy these businesses?
I don’t know that they don’t. One of my big, hairy, audacious, and I always think ten years down the road, is I want to buy companies. That’s one of the things that I want to learn as much as I can and at some point, I figure out I’m good enough that I can turn a company around. Eventually, that’s what I aspire to.
My big, hairy, audacious goal is I want to buy companies and help turn them around and possibly resell them or keep them in my portfolio. A lot of the companies that I work with are transitioning into the next generation, like French Oil. Tate’s my age. She has a passion for it. The next generation is taking over.
There are tons of stories like Piqua Steel. They’re a big rigging company. The owners now who are taking over are 13 to 14 years older than me. They are good friends with my uncle. I know them because I grew up with them and things, but they’re taking it over and they’re younger owners. I don’t know that it’s necessarily that younger people don’t want to buy or be involved in manufacturing.
We go to another spectrum. My cousin works at Honda. I think we talked about this. She had a choice to make. She went to BG, hated BG, Bowling Green University. It wasn’t for her. She works at Honda now on the floor. She and her fiancée, I don’t know how much they make, but they’re 22. They own a home and have two dogs and new vehicles. Maybe not new, but newer. They have an amazing life.
I think that now there is a shift in our society where people are starting to understand, “If I go to college, I’m going to rack up $200,000 and come out and possibly not have a job or I can go work at a Honda and make $70,000 or whatever.” I don’t I have no idea what they make, but if they’re a welder or whatever, they can make good money. They have zero debt because Honda is going to pay for it.
Let’s go back to where you were talking about wanting to buy companies. We’re going to make this about you now. This is a new show. Now we’re the hosts. Isn’t this fun?
I wouldn’t need another beer.
Tell us. What does that look like? This is the thing that owners don’t get. Is there somebody like you out there looking to buy them? Are you only looking to buy distressed companies?
I’ve only bought distressed everything, vehicles and homes, because I think that that’s where the true money is.
Who loses on that or who gains? What about the guy who owns the business or owns the car? He fixed it up. He sold it to somebody who was paying for it.
I think that if somebody wants to buy a turnkey, they want to buy a franchise. They don’t want to work in the franchise, or most people don’t. They don’t buy a Chick-fil-A to sling chicken. They buy it and they want it to be turnkey. There are people out there who want to buy manufacturing companies that are turnkey.
They buy it. There’s a president in place or a general manager. There’s a sales manager. There’s H.R. There’s all the processes all lined out. That’s what you guys bring to the table where you can set that company up. It’s turnkey for the next owner. It’d be a lot of fun for the owner who says, “I don’t have it in me, and I just want to sell it. I don’t care about turning it around.”
I think it would be a lot of fun to buy a company like that where the owner has said, “I don’t have the energy to get it to turnkey.” It’d be a ton of fun to go in and buy it. Do what you guys are doing. You would be my consultant. You come in and help turn it around. You have that turnkey company and then you either sell it or it sits in your portfolio and chugs away. You have all the right people in place.
That’s what it is. We’re trying to put the value back into business.
He brings up a question. I think that there are all kinds of people out there who are looking to buy a business. Some people say, “I want to be my own boss. I want to own a business.” They’re looking for something. What we’re going to do is we’re going to go in and help this business to be more successful in the future, work out some of the bugs that would keep it from even being sold, some of the legal things that Claudia deals with. They’ll say, “That’s what I want.” This thing is up and it’s moving pretty well. The trends are moving upward. Now, I get somebody else who’s good at some of these different functions. I can take that and make it go forever.
That’s like buying a job. They want to work in the business. They want it to be there. That’s where their job is. That’s where their income will be. They’re committed to that.
What I hear from Dustin is a little bit different. He doesn’t want some of the legal problems. He doesn’t want to have to deal with it.
I don’t want any legal problems. I want zero.
He looks at it and sees some production problems, sees an opportunity for new technology, and culture. “I know somebody that they’d be great in this spot. We could take it and then run with it.” He doesn’t want it to be fixed.
He wants to be a TV star. He wants to be manufacturing flippers.
I’m pretty low-key outside of this.
You don’t want to go in a steady state.
That’s the other half of the clientele that we’re looking for. We’re looking for the guys like Dustin who say, “I want to buy this business. It has the opportunity to be something. I see it as a bargain. I’m going to buy it. I’m going to bring you guys in to square it up for me. I’m either going to keep it in my portfolio or I’m going to flip it at some point to somebody who wants a nice investment.”
That’s the other half of the people that we’re looking for. We’re looking for those who are the owners. Ideally, we want to get to them first. It goes back to preserving that legacy. If they aren’t interested in that and they’re ready to fire sell or ready to move on, then we’re looking for the guys like you who want to pick it up. It’s about preserving manufacturing. We don’t want that manufacturing to go away.
It is a very interesting thing that you guys are doing to me on a lot of different levels. There is a die-casting company in Chicago. I may have talked about this or touched on it, but they were a die-casting company. Great facility. They called us to represent them. I drove up to Chicago and met with the owner. Probably 60% of everything was shut down.
I get in there and I’m like, “This is interesting.” Immediately, I’m like, “What is going on here?” The engineer and the buyer tell me that GM had pulled $50 million of sales out and sent it to Mexico because of cost savings or perceived cost savings. The owner was scrambling to figure out how to replace that capacity to fill up that $50 million.
They were very interested. I sent them a contract. We had multiple opportunities that we were working on for die-casting. It wasn’t a $50 million spend, but it was it was probably a $20 million to $25 million spend. They dragged their feet on signing our agreement and came to find out the owner woke up one morning. It was like, “F it. I’m out.” They tried to sell. As soon as they were trying to put the deal together, GM pulled everything out. The one buyer said, “We’re not interested in buying anymore.” He literally said, “I don’t have the energy for this anymore. I’m closing the doors.”
That is the absolute worst outcome of the whole thing. It’s lose, lose, lose. Your community loses. Your employees lose. You lose. That’s what we’re trying to avoid. We bring in 300-plus years of experience in every single aspect of the business. It’s not the operations. It’s what makes us different. We’re not coming in and saying, “Let us look at operationally and production-wise what you do. Let’s throw out some improvements.”
When a manufacturing business fails, it's lose-lose-lose. The community, employees, and owners all suffer. That's what we're trying to avoid. Share on XWe’re looking at operations, sales, marketing, HR, legal, and compliance all the way down through, including going to your computers. Do you have a backup disaster plan for your computers? That’s the stuff that people look at when they’re buying their business. They don’t want to buy a pig in a poke and hope that things aren’t going to go bad.
Having A Specialized Team
I do think it’s interesting how you guys are structured because you do have one person that is their gig. AJ is all about protecting IP, fraud, and cybersecurity. You have an accountant on staff, and Mac loves accounting. The thing that I find interesting about you guys is you have one person who has a niche, and they specify in that issue.
If you have a client that their cybersecurity is a mess. They don’t have any sales and marketing. Their HR, their recruiting, their training, and their development are a wreck. You bring that to the table and maybe their accounting is solid, and they don’t need any issue. There’s nothing there to fix. You don’t bring in the accountant and those forensic people. How many people do you guys have on your team now?
Nine.
I don’t want to put you on the spot, but each person has their specialty. Can you run through from accounting down to whatever?
Before we do that, I want to add something here because we do have individuals who specialize, focus, have education, experience, whatever in specific arenas. However, I think it’s even more than that because each one of those has other arenas that they’ve touched on. If you look at a business, everything that that business does is integrated.
What operations impact accounting, HR, and talent management? Obviously, what talent management does can mess with everybody. When you look at what we bring to the table people that specialize in all these areas, as opposed to sometimes you’ll find that they find somebody that has a big broad picture but doesn’t specialize.
The specialization works. At the same time, each person who’s evaluating operations can say something to the lawyer. “Claudia, I think you need to pay attention to this because here’s something that I heard. Here’s something I saw.” That adds another dimension to it that can make a huge difference in the whole assessment.
It’s not nine silos. It’s nine people that have very deep experience in a certain aspect of business, but very broad experience in the whole business.
That’s hugely important. I don’t care what company it is. Production and sales always clash. I don’t care if you’re building homes or making something. Once you get production and sales working together as a team in accounting, you understand what your cost accounting is. The sales understand this is why we’re giving a price increase because we didn’t make any money.
If you’re transparent with your numbers and the cost accounting, then sales aren’t pissed off because they don’t understand the price increase. Production understands that everything that they do and if they don’t scan on and off jobs correctly, it affects the customer. I think that is culture. If everyone understands what’s going on in all facets of the business as you guys have, where there’s so much crossover, then it creates more cohesiveness.
The other thing is I asked the stupid question. I’m HR. I asked the stupid question of operations. If operations are listening, that’s a good thing. If operations aren’t listening, it was a stupid question. If operations are listening, sometimes the stupid questions from the other people because we act as a team, you listen and you go, “That’s still a stupid question, but you made me think of this.”
I have to tell you, Mac, you’re bringing up a good point that it’s that cross-functional thing that you can’t get as an owner. If you’re the owner of a small business that’s a $30 million or $50 million business or even less than that, you are the person. You’re the one who’s at the top. You have no peers. You have nobody to bounce things off of. You’re the one who’s expected to know everything.
Typically, you couldn’t get the breadth of experience that you’d get with the MLP group. That’s the thing that makes this different. I had told Mac I had socialized this idea for a number of years. If it’s just me, although I’ve run an entire business and I’ve operated it, I’m not an accountant. I’m not an HR manager. I’m not a legal expert. I’m not an IT person. At the heart of it, I’m an ops guy. Now, I can draw on all of these people that have this other experience and we bring something to you that you can’t get somewhere else.
As an owner, you understand. There are some out there who are so narcissistic that they think that they know everything. As a good leader, you have to understand that we’re weak in this department. Let’s hire that. I think that owners need to hire themselves out of a job. I was sitting on a panel one time, and I forgot what the company was. The guy took it, and when he took it over from his dad, they were a $10 million company, and he has grown it to $100-plus million. Very successful story. One of the things that he said is, “My job is to hire myself out of a job every single day. That’s what I’m looking at doing.”
He goes, “Now, I show up to meetings because I feel like I have a responsibility, but I add no value to the meeting because I’ve hired such wonderful people that they have all the issues figured out.” If it gets down to a decision to be made that nobody feels comfortable with, that’s where I earn my money because I’m the tiebreaker at that point.”
He’s like, “My job is to hire myself out of a job.” That always stuck with me, and that he’s got it. You’re going to fail as a person. People learn more from failures than they do from successes. Those who say that they have never failed have failed with that mindset unless they don’t look at things as a failure. Maybe it’s a mindset that, “I messed this up, but it’s not a failure. I learned from it.” That’s a success.
I think that there’s that too. If you can let go and let somebody else fail in front of you and not get jacked up about it, then you are building that. That’s been hard for me personally. I see somebody do something and I’m like, “This is going to end in a disaster.” If it’s not that big of a disaster, I’ve let it happen.
That’s an interesting scenario. One of the things that can happen in that position of hiring to put me out of a job. That person never is in the position to be out of a job. If you look at that person, that person becomes the core of putting this together and watching it. Now it gets fun. He can keep watching this and say, “You know what else we could do? What would you guys think of this?”
It could get creative. It’s the word maybe we should have a subdivision or whatever it is. You could create a culture that could be creative. I think that we are potentially going into another stage or another industry age, whatever it is, 4.0, 5.0. If you talk to kids in the younger generation, at least younger than me, you’re going into a great generation.
You’re going into a great phase of manufacturing where what’s the next IT tool that will come out? What else could we create? What could we do with chemistry today that we couldn’t do yesterday because of the data we now have from these different IT tools? I’m part of the supply chain for Honda, and we create blinkers. What if we could do something different with that blinker such that it does this when you blink? To me, the end is not even close. You could do all kinds of different things even if you’re in what’s perceived as a tight supply chain.
What a cool time to live in as the Millennial and X generation and those beyond, all of us old geezers, we’re getting out of it. Either you’re going to have to reinvent how to make this stuff or you’re going to have to buy our businesses and use that to make even more stuff. That’s what we’re intent on. How does that wealth transfer from the generation of Boomers to the next generation as owners and what’s the value of it when it transfers?
Do we transfer you a shell of the company that we built, or do we build it up and transfer you a robust organization that you can pick up and you can take it into the next generation and be even more successful with it? We’d like nothing more than to see the United States booming with manufacturing companies.
Impact Of COVID On Manufacturing
I think that we’re on our way there. I said this back when we had a big reshoring. Reshoring is an old term. We’ve been talking about reshoring since we offshored. Over the last four years, we have seen companies restore because of the tariffs and the things that made it not so attractive to go overseas. We do a fair amount overseas as a company, but it’s way different. Over the next four years, depending on what happens in this election that we don’t even know what’s going on, that could shift again. COVID is a horrible thing, but if you make lemonade out of the lemons that we were dealt, the one thing that it showed us is we need manufacturing here.
We need to shorten those supply chains. When you shut down the border between the country that makes all the stuff you need and the country that needs it, they’re not going to get it.
They’re in control. We’re no longer in control of our own destiny. People could potentially die because you can’t get the right stuff. Whatever that stuff is, if it’s a respirator, because 90% of it is made overseas, you’re in a bad position. I like the idea of global trade. It makes everything competitive. I also like the idea of us being sustainable as a country.
If you live in a homestead, you don’t need to rely on your neighbor for a cow. You should have your own cow. As a country, we need to be able to make everything here that we need. Maybe we don’t have the right mind to mind the glass for the iPhone. That’s only done in a certain country. We don’t need an iPhone. It makes our lives easier. We have tons of IT stuff and all the shit that makes our lives more fun and easier. Do we need it, or could we get away with a flip phone if we had to?
Also, the phone that you and I haven’t even seen yet. It comes from a different chemical that’s created. A different mix of raw materials and synthetic materials and how they’re combined. That’s where you see what’s happening in all these different research and engineering and all those different things. The capabilities keep expanding. What we perceive today to be the answer is because of something that happened to the COVID virus, all of a sudden, we discover another thing.
I guess this is what you were saying earlier. This COVID virus has stirred up a lot. I’m sad that we’re somewhere around 240,000. There are things that have happened because of that, like the reshoring. I think that became a higher priority because of the supply chains. The materials that aren’t here, that should be here, we couldn’t get a hold of.
Now, we’re going to bring that over here, some of it, probably not as much as you and I would like to see. You talked about passion. Everything you see out there, everything you use day in and day out is manufactured. With all the changes in technology, there are so many opportunities. Some of it may bring in the kids who never thought about going into manufacturing because they’re going to ask those stupid questions.
They’re going to come up with those ideas that are going to suddenly create a new product. Some of the businesses need that. That business that you talked about when the owner said, “Keep replacing myself,” is a great place for one of those to go. It might be a great place for one of them to go as the owner said, “I’m tired of this. I don’t care. I want to go away.” The ones that worry me the most are the ones that are intentionally draining the corporation. Financially draining it slowly and not putting anything back into it.
I’ve worked at that place.
You want to buy that place.
I don’t know. Their mentality was to run it until it couldn’t run anymore. They hadn’t bought a new machine in decades.
Although I have to tell you, I don’t have a problem with that if that’s their stated goal and everybody around them understands it. I have to tell you, as an employee, if I understood that that was your stated goal, I’d be bailing out on you fast. I think for us, as a group, our stated goal and our objective is we want that business to survive.
We want that legacy to go on. We want that selling in the United States, selling across the world, making it here, employing people here, paying taxes here. We love paying taxes. We want to pay taxes. You have to make money to pay taxes. In the end, the only way you’re paying taxes is if you’re making money. In the end, as a business, we want to pay some. You don’t think so, Mac?
I’m sorry. Did you say that again?
Mac wanted to pay some taxes.
We want to pay taxes.
I think we need to be making money and we want to be successful as businesses and that’s what it’s all about.
You’re right. If you’re earning more money, you’re paying more taxes. That’s a good thing. When we were talking about the person who wants to drain it, this is where I wish organizations could hear what it is we’re talking about and pass it on because if they’re slowly milking it, we could help them to put them into a position where you’re tired, get out. We could make some value in that business which means they would get even more. I get the fact that you’re tired but look for something like what we’re offering so that you make more, and the community makes more.
If you're tired of running your manufacturing business, look for a solution that helps you make more while benefiting the community. Share on XThe little bit of money that they would pay to an organization like the MLP group would pay off in spades and they’d move on that much quicker to that beach, to their beach house to golf on every day of the week or whatever it is that they want to do and that’s the objective.
One of the things we’ve talked about is to where it’s not we do the evaluation and give you a plan, but you don’t have to come back. You could stay away, still own it, and we would look for somebody to run it before it’s sold. because it’s yours, you don’t have to be there day in and day out dealing with the stuff that you’re tired of. We find somebody who can operate it under the new plans to make it work more for you, for the family or the community, for the next buyer.
I think that we’re saying we can be as light touch or as heavy touch as you want. If you want to say I don’t have the stomach for it anymore. Can you help this business to survive and get it ready so that a broker will take it and sell it or whatever? Great. The flip side of that is I want my business in five years to be knockout, ready to go, and worth more. How can you help me to get there and how can you help me to be ready? What does it take so that the day I decide to pull the plug, my business is ready for me to walk away, and it all survives? That next guy, unfortunately, Dustin McMillan, doesn’t make big bucks by flipping my business. He comes in and he grabs something that’s highly successful and he can take it to that next level. That’s what it’s about.
I think it’s great and I do. The people who are tuning in have comments and want to know more. We’d love to read questions. Questions and things are very encouraged and we always ask for questions. Info@MFGMonkey.com, email us and I’ll get the questions over to you guys. Last time, you don’t want to give away your personal cell phone number, do you?
I’d give it away, but we’re close to the MLPGroup.com. Within a couple of weeks, they’ll be able to go out and hit MLPGroup.com. They’ll get some information about us and a way to connect with us and the whole deal. Between now and then, we’ll let you be our go-between.
I appreciate it. I enjoy having you guys on. I’m sure we’ll do it again. Thank you.
Next time we’ll be knocking it dead. We’ll have a couple of clients to sell to you.
Guys, thank you so much for coming on.
Thank you for making this available.
I appreciate it.
Important links:
- Mac McVey– LinkedIn
- Scott Ellsworth – LinkedIn
- MLP group
- Info@MFGMonkey.com