speaker-0: I spent the last 36 hours, no, 48 hours, in a shop that we were moving out machines, just shutting a shop down because an owner did not know this stuff. Brilliant machinist could program anything in his sleep. In the industry with buyers, he was he's a legend because they never sent him apart he couldn't figure out and get done to spec. He was just brilliant. And I'm sitting there, I'm watching the riggers take out machines. And just seeing the the skeleton of once was a th a a really powerful company because this stuff wasn't implemented. Welcome to the Manufacturing MA Podcast. This is the place for manufacturing owners, operators, investors, and acquisition entrepreneurs who want to build stronger, more valuable industrial businesses. Hosted by Mike Fritz, CEO of American Precision Partners. Manufacturing MA explores the real world strategies behind buying, building, operating, growing, and selling manufacturing companies. Whether you're looking to increase the value of your company, pursue your next acquisition, or build a business that thrives for generations, this podcast is for you. And now, here's your host, Mike Fritz. Hey everybody, welcome to another episode of the Manufacturing MA podcast, where we really help you set your business up well. grow value. And really what we want you to do is run your business like you're going to sell it, even if you never do. we're so grateful that you you tune in, you're asking questions. Our podcast just launched about two months ago and really we've got a lot of feedback from you all asking questions about what really drives the value of a business and that's why we exist. And that is the reason I invited my good buddy Paul Van Meter on the podcast today. He's one of the Smartest manufacturers, just in the idea of machining, but also a brilliant businessman. Not only did he have his own exit, he's also launched an an ERP system that he built from scratch with his team that is now one of the more dominant ERP systems, especially in the precision manufacturing world. And I'll let him talk a little bit more. But I'm bringing him on today because he has some exciting news and the launch of his new book, Precision Manufacturing Precision Business. And I'm telling you, This is a book that you need to get because we tend to do really well making precise parts, but we tend sometimes to not do very well making precise business decisions. Paul, welcome to the show, brother.
speaker-1: Thanks, Mike. Good to good to be here with you.
speaker-0: Thank you so much. And man, so so you and I got to touch base a little bit at IMTS, but it's been it's been a few a batch of months since you and I have sat down and just had a good conversation about what we love. And so man, I mean, guys standing in a machine, sells a company, starts an ERP system. How does the how does a guy like you take time to write a book? Tell me, tell me like what's the passion behind this book, first of all. And how in the world did you find time to do it?
speaker-1: Yeah, sure, sure. I mean, the passion really came from hearing hundreds of my own guests on machine shop mastery, manufacturing transformed, and some of making chips. And just these incredible founders, business owners, multi-generational, you know, shops out there that that in some ways are just absolutely kicking butt and taking names and in other ways are fighting the same challenges over and over and over again. absolutely. And just and and so, you know, that some people listen to podcasts, right? those that are listening, they do that. Some people don't. and they don't learn. Even some people that listen to podcasts don't learn through listening as much as they do through seeing something on a page and reading it. Sure. It's just the way their brain connects. Definitely I know I'm more that way and I need to like be able to look at it and like read it over and highlight it and like circle stuff and You bet that's how I learn best. And so as I talked to folks, I wanted to you know, provide something that was a resource for them to digest hundreds of hours of podcasts in a book they can read in a few hours and and come back to and revisit and and really kind of dig into. So that was the motivation for for for writing this thing. I love
speaker-0: I love it. One of the things I love about your journey is not only were you a machinist and you understand the perils of the shop floor as good as anybody, but you took the second, I'll call it the second tour of your career to really give back to the shops. not only through a really powerful software that really helps people buy back their time. And in my opinion, one of the ways, there's many, but one of the ways to add a lot of value to your business. Absolutely. is is adding in an ERP system. And again, I know that's not our combo today, but what I love about your story is that second phase of your career was was really of course it's a business, but it's also a a real passion and give back. And that's what I've loved about getting to know you over the last three, four years is you're not just a machinist that retired and bought the beach house with his wife, man. I mean you you really are still giving back to the shops. And this is what I love about this book. because this isn't, you know, this isn't a quote unquote Pro shop book. It's not a it's just a book that you want to you want to to boost companies. I love it. And so tell me, you know, you yours you're with shop owners all the time. I am too for a different reason. And we hear, I guarantee you, we hear a lot of the same issues. We hear a lot of the same issues of bottlenecks, could be revenue bottlenecks, could be throughput bottlenecks, which by the way are pretty much the same thing or have the same same DNA. Could be revenue bottlenecks, could be employee bottlenecks or Capacity bottlenecks, it could be kap capability bottle, it could be capability voids or too much capabilities, they're not selling. So many things kind of hit these shop owners. When you wrote this book, what are some things that you're like, you know what? If you've got you're making precision parts, how do we also take that same mindset and transplant it to a precision business? What are some of let's call it those cornerstone op ideas that shop owners can get and really start driving their company? to more profitable and more valuable.
speaker-1: Yeah. I mean there's a lot to it. But in in a nutshell, as you said, you know, a lot of shops are started by people that are technically capable in the craft, right? They absolutely a machinist, a tool and die maker or some something like that. And sure. They think that if they're good at that, they will be good at running a business that does that. And yeah, hopefully there's enough co hopefully that's the word is getting out now enough that that's just just not necessarily the case. No. Some people have a natural proclivity to it, many do not. and so just, you know, we we in the and I and I, you know, the other thing that was really important to me in this book is getting the voices of the industry in it. So I quote directly over 50 different shop owners from different podcasts that I, you know, have done over the years, you know, where where it makes sense in the in the flow of of the book. and so I definitely wanted this to feel like a collaboration with the industry. For trying to support itself in the industry. It's not just my words for sure. So, I mean, there's I guess in a nutshell, so many shops and businesses out there do not spend the time to invest in building the systems that are gonna help the business run more profitably, more systematically, more decoupled from the owner. Umpowering a team. I think I learned it from you. empowering a team. that really owns their outcomes and owns different parts of the business. And just let's let's the owner become sort of the most, I don't know, I would almost want to call it self-actualized version of themselves, where they are the architect of the business. They are defining the vision, making sure the capital's in place, making sure the resources are there, but they're not in the weeds every day, right? They and in chapter 11, I think we we talk about. The six stages of ownership. And this is in the same chapter where we talk about breaking through different revenue you know, yeah levels, two million. Revenue ceilings. Yep. Sure. 'cause it's all the same topic, right? It's all the same topic. You're a a business will never grow bigger than what a what a business owner or leader allows themselves to grow past, right? So
speaker-0: Hundred percent. Hundred percent.
speaker-1: If they're in the weeds, if they're directly managing machinists on the floor and talking to customers and they're just never gonna grow into a ten million tw you know, bigger business. It's just gonna hit the ceiling. so a lot of that growth has to happen on the individual level for the business to do the same thing. Yeah.
speaker-0: Yeah. No, I love I love this, Paul, because I I mean we are I sit with sometimes I sit with owners when when in my role as an MA guy trying to help them exit their company and it breaks my heart. Dude, I spent the last 36 hours, no, 48 hours, in a shop that we were moving out machines, just shutting a shop down because an owner did not know this stuff. Brilliant machinist could program anything in his sleep in the industry with machine. Buyers, he was he's a legend because they never sent him a part he couldn't figure out and get done to spec. He was just brilliant. And I'm sitting there, I'm watching the riggers take out machines and just seeing the the skeleton of once was a th a really powerful company because this stuff wasn't implemented. And when and it breaks my heart when I sit across from an owner and I'm I have to tell him, Man, your shop is not worth anything because this stuff wasn't applied. So I I pray, I really hope people can get your book, let's call it five to ten years before they sell. Right. And really if they're going to sell. And by the way, even if you're gonna pass it to your kids, don't pass them a mess. Do this stuff first. You know what I mean?
speaker-1: All this is worth doing, even if you plan to have it until, you know, you're ninety years old and you just
speaker-0: Absolutely. A hundred-year-old shop passed from generation to generation. You're just doing your next generation a gift by doing this stuff. Right. You know, and so so to your point, you know, you sit you you you are with in shops with your with your software all the time helping shops reorganize, rethink the way they do business, rethink the way they do, even rethink the way they actually do part flow and and floor work. What are some of those systems? Let's let's just like hone in on one or two systems that you think have maybe the most bang for the buck where an owner could start. Cause you have this, you know, I've always said you can machine your way to two million, you have to systematize your way above that.
speaker-1: Yeah.
speaker-0: Almost to every level above two million, you have to systematize your way. You can horse and grind a two million, but but that's about it. Then you gotta go, you gotta systematize to 10 and systematize to 20 and blah, blah, blah, blah, blah. Yeah. And so What are some of but when I say systematize, built within that word and that DNA of that word is a lot of subpoints of systems to implement. And so what are your and what is what is your thought of a couple of those systems that tend to have they're a really good place to start if an owner truly is his boots are dirty every day because he's out on the shop floor.
speaker-1: Yeah, his or her. So his or her, yeah, the guess. well, the first thing I will say, which is I think just truly a foundational, important point, you have to get rid of paper off the shop floor and in the office. Like it absolutely just just strangles the growth and the free flow of data in in a company. Like to such a degree that people just don't realize. And when you do that. And then you build in systems for, you know, a system for sales and marketing. Like you have to have a system. Like, you know, I I use this term positive sales pressure, where you have more RFQs than you have capacity. And so you can start being selective about what you take on and you can start raising your prices and improving your margins. So a system for that. When you win that work, a system for for quoting it. You have to have a system for doing contract review so you don't miss the important details and get rejections later because of the right material spec or you didn't get the right, you know, NADCAP plating company or whatever it might be. Whatever
speaker-0: But well, and people often will I mean how many times do we see this? no, that's not Rev One, that's Rev Two. And I didn't have a way to separate between Rev one or Rev two. And so on I'm doing all my processes to Rev One when that's not even what I I need to do. Right. And so people because of this system not being in place. So
speaker-1: Processes for document management and rev control, processes for procurement, processes for not only manufacturing planning, but quality planning. That has to kick off right at the beginning. and to back to the point about paper, if you if you're on paper, these things all have to happen almost in series. Right? Yeah. One person gets the packet and then they do their stuff, and then they hand it to the next person. It sits in their inbox and hopefully it doesn't fall to the bottom. 'cause we all hear the stories of, you know, and I can remember in the early days of my shop, you forget about a job entirely and a customer calls you the day after it's due and they're Hey, where's my parts? And you're like, What parts? You're like, shit. It's at the bottom of Lacey's stack. and by the way.
speaker-0: by the way, I am I don't know if every shop has done that, but I know that we have gotten a call from a customer. We have.
speaker-1: Yeah. So you have to have systems to to not have that be the case.
speaker-0: Definitely that.
speaker-1: And then yeah, I mean, making sure all that information ultimately gets to the setup machinists so they can do their job. The job is kitted and prepped and ready to go. They're not spending hours and hours running around the shop looking for tools and the right class of tap and making sure that their fixture is there and just like it's it's mind blowing how much waste there is on a typical shop floor with people literally just walking around looking for stuff. if that's If that's the owner, then forget it. They're not doing anything else important that day.
speaker-0: Bingo. Bingo. And I I love this part because it's first of all, it's so practical. It's getting the papers off the floor. That is so freaking practical. It's so practical of getting everything in a system on a server. and how I mean, obviously how you save that is all dependent on what certs you have and how you have to communicate with your customers. So what it looks like may be different. But that it looks like with no paper is is incredibly valuable. I think that is so powerful. Of no And to that, to your point, you just doc I'm like you were just walking through even with this no paper is having some sort of, I would assume, some sort of flow chart of information, some sort of like this person gets this, then this person does this, then this, so that everybody understands if we do have a system break, we know where to go to fix it, you know.
speaker-1: Yeah, this whole idea of even starting at the very end of the flow, like someone creating an invoice. Yeah. And then this idea of an internal customer and what what you need upstream to deliver to your internal customer to make sure they know exactly what to do. They're not gonna make mistakes, they can do it efficiently, they can hit targets or whatever, you know, the case might be, is such a an important concept. And I don't think enough shops think about it that way. but it does help structure just yeah, that that flow of data and making sure that, you know, at er at every point the I's are dotted, the T's are crossed. Cause, you know, in in the value stream of making parts, the machining process itself is probably a fairly small part of everything that has to come together, right? For for you to deliver a successful invoice that gets paid, like as to Mike. You know, Mike Payne famously talks about that. Like, we're in the business of delivering invoices that get paid. Right. That's what we that's what we actually
speaker-0: Yep. Yep.
speaker-1: are. If the package isn't right, if the first article's not right, if the C of C isn't right, like it doesn't matter that your parts are perfect. You're not gonna get paid any. So and
speaker-0: Yeah, yeah, hundred percent. A hundred percent.
speaker-1: then you get into cash flow problems and then you, you know, go out of business. So, so yeah, all that stuff has to be really well systematized, well documented. And and it in in this day and age, as we're also at this point where the silver tsunami of machinists at the age of I think average age of like fifty-six years old, or later, they're gonna be retiring. And they're so much tribal knowledge in their heads that documenting it on paper or not at all is just not an option. It has to be documented in a system that other people can access, other people can contribute to. It's easy to find. You can't lose it on the top shelf in the bathroom, which is actually a story that came from one of the shops I visited.
speaker-0: Yes, that's crazy.
speaker-1: They had a traveler missing for months and completely had to remake parts and recreate everything. And the dock pack was on a a bathroom shelf. I mean, that kind of thing just cannot happen in a business that's gonna survive and thrive.
speaker-0: Yeah, I think what one thing you said there that I want to double click on because I think is so important for especially owner operators to know. Cause often I feel like a lot of this book and what I love about the structure of the book, it feels more like a round table than it does, you know, you teaching the industry, although you've taught the industry much. But I'm just saying, like it felt just like a round table discussion, which I think is freaking so powerful in my opinion. And one of those things is you you you a lot of these owner operators, which is what really a lot of this is going towards, they they think about the machining piece most
speaker-1: Yep.
speaker-0: when it is often you think about it. Let's say a part has a, I don't know, whatever, full, you know, 22 minute cycle time. What I don't care, whatever. Let's say it's got a 22-minute cycle time. Think about all the work it took to get the job, quote the job, win the job, order the material and get that part on that machine. For 22 minutes of of fame. You know what I mean? It's like we always said the I always I always say like a football team literally makes billions of dollars on eight four-hour window home games a year. Like they
speaker-1: Right.
speaker-0: they spend all year to optimize eight three-hour windows. And the machining industry is a lot like All of the stuff leading up and my and what you just quoted, my pain is 100% right. We're in the business of sending invoices and getting paid. But that's for a what a 22-minute part, like and we focus there of making sure you know the programs are right. And of course that has to be right. That's a given, you know. But but and then we don't do what you're teaching in this book of be be as precise with your system as you are with your part.
speaker-1: And I love that football analogy. You know, if you take that to you know, to a conclusion, like if they didn't do all the prep work for those games, and it was just a mess trying to get people in the stadium and the announcers didn't know who the players were, and
speaker-0: Exactly.
speaker-1: you'd be like, What the hell is going on here? Absolutely. But
speaker-0: Absolutely.
speaker-1: we accept that in our own businesses all day long. Right. Someone walks up to a machine, they're like, What's what am I making next? You know, where's the where's the G code? What what's where's the tool list? Like it's just it it cannot happen. So anyway, that's that's a large part of the premise of the book. But it it all you know ultimately in in the last three chapters are about either, you know, selling the business, keeping it, or you know, transferring it to your kids or you know, a next generation. So because ultimately that's that's why we're I mean, yeah, I mean a business. can make you a good amount of money while you're running it. but ultimately people have so much tied up in that business, it's just an absolute tragedy if it just disappears. So
speaker-0: Absolutely.
speaker-1: I and I and I've absolutely seen that happen, you know, or talk to one of my clients in his 50s, just kind of had assumed that he would just one day just wind it all down and Close the doors and sell it off. And like as he started to really kind of grasp what was happening in his business as he, you know, was sort of implementing everything, he's like, that doesn't need to be my outcome. He's like, I could actually build something that someone else wants to buy. I'm like, absolutely, of course you can. Like and isn't that a better outcome than just, you know, not only the monetary gain at the end, but just to know that your baby that you put decades of blood, sweat and tears into is gonna continue to grow and flourish into the future and retain those jobs and support that accoun that local economy. I mean, my gosh, it's so important.
speaker-0: It is, it is.
speaker-1: And to the point that you were talking about earlier, you know, being in the shop and watching these machines leave, during one of the episodes Machine Shop Mastery just a couple months ago, when I was recording with Gavin from Rain Manufacturing up in Boston or near Boston, he saw a Facebook ad for a I think a like a Bridgeport mill. And he went out to the to this guy's place to see it a couple hours away. And it was a guy in his I think he had his shop for like thirty-seven years or something like that. And he was selling this mill and he told Gavin, he's like, Hey, do you want, you know, any other stuff? Because I have to be out of the building, you know, by the end of the month. And my you know, he didn't even own the building. and he's like, I'm just shutting the whole shop down. So, you know, they worked at a deal, he bought like four. Three C and C machines, all the inspection equipment, all the he bought the entire shop for pennies on the dollar just because this guy, like the one that you just described, had not put in place any of the things to make his company where someone else would want to take it more than penny. And it's just it's just tragic.
speaker-0: It's it is tragic, man. It is tragic. And that's why I love what you're doing and what my passion is and why I wanted to have you on here because if we can get these owners soon enough, because people I want people to think about profit helps today, but value really builds tomorrow, right? And so you have to think about both. You need to think about profit today, because if you don't have profit, you don't have value either, you know, because profit's what you pay your yourself out of and whatever. But man, if people could just do the the the thing is, we're not even necessarily asking them to do a bunch of different stuff. We're just saying we just want what you do to be documented in a certain way so people can understand it. We want so it's not like we're asking you, hey, you're a machine shop. We need you to change over to being a fab shop. We're not asking you to change disciplines. We're asking you to just document your discipline, which I love that about. Which you know, your your podcast, and I've told this story before, was the first podcast I ever found in this space. And when I started listening to it, all these shop owners of how they were growing shops and what they were doing. And that I what I love about your podcast, it's so eclectic on ownership. There's owners that are still in it, owners that run it from afar, owners that are setting up because they love it. I just love the eclectic nature of it. But one thing continues to remain is we have to help people see this precision idea. Move to more than just the part itself. Have to
speaker-1: And you know, the activities that that they need to do to build value are not mutually exclusive to doing the things that make profit tomorrow. They are actually not at all.
speaker-0: It is a all it I would say it's just about a hundred.
speaker-1: But sometimes they don't perceive it that way. They're like, I got this job. I just need to throw it out to the floor real quick. Make sure they, you know, can start on it right away. And it's like, no, you need to slow down a little bit, do do a planning process, make sure, you know, all these things are ready to go, and then very carefully hand it to the shop floor. And they're gonna run with it far faster and further than you can than they will if you just throw it over the wall.
speaker-0: Hundred percent.
speaker-1: and yeah. The jobs will hit target, they'll make more margin, there'll be less stress. You'll you won't burn out your folks and have them possibly leave because it's freaking firefighting all day long. Like yeah. So many benefits from doing the thing that creates value just today in the shop to make it be a nicer, better place to work.
speaker-0: Absolutely. Let's dive into that systems more because having no paper is really good. we talked a little bit about some of the team structure, which I know you've talked a lot about. And I use the word decoupling and trying to decouple yourself from daily operations. By the way, I want everybody to hear this. That doesn't mean you have to stop doing what you love. If you love a certain part of the business, please don't remove yourself fully from it because you're you're, you know, this is actually I did this in reverse when I bought my first shop. I got really heavily involved in operations and I realized. I was doing more damage than good because that's not where my skill set laid. I needed to get out of that and stay in MA and help us grow through to through buying shops rather than help the machinists figure out where the part was gonna go. Right. I had to do it almost in reverse. But don't stop doing what you love. But in that team structure, what does that look like if I'm gonna if I'm gonna grow the value? And and and I I want to hear from your perspective. I obviously have some thoughts on this, but what do you what do you see on the how do you grow your team or structure your team in a way? It almost is a system in and of itself, and what does that look like?
speaker-1: Yeah. I mean, starting at the beginning, of course, you know, it when you're when your shop is first new and it's only, you know, the founder or the co-founders, right? You're doing all the work. Like 100% of everything is you. To
speaker-0: Yep. A hundred percent.
speaker-1: the point where, you know, you have enough demand, you have enough revenue, you have enough profit to support another head another head, another salary. then you you know, I mean, most shops probably hire a machinist next. some people hire someone in the office. It just kind of depends on, you know, how how they decide to do it. but you're essentially offloading things that you can work on higher value work as opposed to doing the thing that you're replacing, right? And this absolutely this comes right back to the whole emyth, you know, book that I talk about so so often, probably too often. Yeah. Yeah, that's a great book. It's
speaker-0: Yeah.
speaker-1: just so spot on. you're basically buying back your time to you know, do more high leverage things. Exactly.
speaker-0: You do. Yep, exactly.
speaker-1: but you're still in direct communication with those folks, you know, and and hopefully you're you have a a good job description, you have a list of sort of KPIs that they are responsible for. they know what good looks like, they know what's expected of them, and you're giving them all the tools and resources to be able to hit those.
speaker-0: To do that thing. Yeah, sure.
speaker-1: If you're not, you're setting the whole system up for failure. so you can do that a few times until you have I don't know what the number is, you know, five, six, seven, eight people, where it's just too much to be able to manage that many folks. And then you need someone, you know, in between you and them. So like a shift lead or a production manager or or an office manager that's that's helping facilitate bookkeeping and quoting or you know what have you. So and then again, at that level, you need the systems of what what's r you know what those people are responsible for and how their teams, you know, how that flows down to their teams. and, you know, just come at it from like a really sort of logical person, you know, perspective of if if I'm gonna start adding more bodies into this organization, how do I make sure that everyone continues to, you know, do well, enjoy their job, know what's expected? because you know the way I think of it, most employees, and there's an occasional bad apple, but most employees are there to work really hard. They want to do meaningful work. and if you facilitate them doing that, that's just a great situation. If you know you you micromanage, you don't give them the resources, you don't provide the systems to tell them what good looks like and making sure they can actually do that work well and feel satisfied at the end of the day. that's just a recipe for a lot of hardship. So You know, and ultimately when you get into, and I don't know really above seventy-five. That's where my shop was when we sold it, right? But we had you know, definitely, you know, people leading, you know, sort of HR and procurement and you know, programming and planning. We had, you know, quality manager, QMS coordinator, we had leads on all the four shifts. then we had the whole, you know, team underneath them. doing the actual parts and inspections. But at every level, you know, the the the reporting has to be clear. The org chart has to people have to understand what the org chart actually looks like and and then have include systems for making sure people can improve the system itself. Like having having a a vehicle, a mechanism for continuous improvement, I think is absolutely paramount for providing information back upstream, oftentimes as companies get bigger, there becomes a divide between sort of like the office overhead staff and the manufacturing staff. And sometimes that that gets contentious. That
speaker-0: It does, yeah. That's a good point.
speaker-1: is that does not have to be that way. You can still have harmony and you know a good facilitation of of data back and forth. Partly this comes back down to paper again. It's amazing how paper creates that block sometimes.
speaker-0: Yeah.
speaker-1: Anyway. maybe I've gone on on enough of that, but
speaker-0: No, that that's a really good point. No, I love this that because I think that if you're going to systematize your paper out, the most valuable part in any company, right, is the people, right? It's the most valuable part of a company, is what they can accomplish. Yep. With or without you, quite frankly. Without you adds more value, but even with you, you can only do so much. And I think systematizing this team, I mean, you talk about precision manufacturing, precision business. There is no more important piece to a precision business. Than having precise people and having people in the right roles, doing the right things, relieving you of the right duties. And you know, you used a word that that that's what I love about talking with you. You used a word earlier called self actualized, which isn't a word that the engineering space or precision manufacturing uses very that's a little woo-woo for our space, right? But that being said, I wanna also underline that that I think there's a there's an important element here in systematizing your team. To to increase in your self-awareness on what you're really not good at. because I to your point, I mean, I realized two things. One, the closer I got to ops, the the the the more I muddied things up. So I had to realize like that's not my goal. But I've realized as I work with Kirk Phelps, he's probably, and I don't know you, so don't take offense to this. He's probably the smartest metal maker I've ever talked to. that dude I mean, literally, what he can do with metal is like he's a magician. Like he is so good with metal. And I've realized I had him in leadership and he's an excellent leader too. But I realized he our company runs way smoother the closer he gets to metal. And so, like, and I don't need him standing in a machine. That's a waste of his time. But I need his brain to be transplanted into our machinist's brain, or else he's gonna die with all that information in his head someday. And so,
speaker-1: Sure, sure.
speaker-0: so it's like knowing where you which your leaders and and you know and and even he's like you know the the further he gets for metal the the more he's he's learning which is great the closer I get to metal I'm learning so it's it's just it's a different way of of of of of process but to your point as you're building this team man y you gotta know what what you're like this is not my cup of tea I gotta I gotta bring somebody else for this piece right and and as you build that team for value how did you do that when you were building your guys' company and even Pro Shop and you've built two successful companies at this point, l at least that I know of, maybe of more. But what was your process of getting yourself out of the the pins and needles of the day? Who did you how did you leverage that? How did you train that? What did that process look like?
speaker-1: Yeah. it's a great question. And and it does require some self-reflection about what you actually enjoy doing, what you're good at doing, and what what you really should have no business you know.
speaker-0: A hundred percent.
speaker-1: Sometimes that's the hardest process is is really doing that work and and being humble about it and being like, Yeah, I'm actually not great with with with finances, with you know, with people, with HR. So I'm marketing. I'm a terrible estimator, like whatever it might be. and so that's the first part of it. and then the other part, which is also a skill set, is understanding what people are gonna be good in those res those various roles, right? Yeah. All the sure the right people in the right seat of the bus, as they you know, the old saying goes. So yeah, And sometimes we make terrible mistakes hiring someone in a role that they are totally inadequate for, right? And and sometimes it's someone from the outside and they have a you know, they have a good resume and they're they're a slick speaker, but when you get in you realize that they don't know hardly anything about what they're talking about or or or maybe they're technically good, but they're terrible with people and like it's just not gonna be a fit. So yeah sometimes there's this this whole idea of you know, of giving people you know, promotions to their level of incompetency, right? You're like, someone's a great machinist, therefore they should be the lead of all the machinists. And that is often a terrible idea because you you've taken them away from the metal that they're really good at. and you put them in charge of things where, you know, there's a lot of people skills needed and they need to think more systematically about process and making sure everyone has the resources they need to do their work. And yeah, they're great at troubleshooting when you have a problem that needs to be solved. and they'll often probably gravitate to to put their attention and passion to that and maybe not put as much attention on the things that that really matter, all those other parts of it that lead to that twenty two minutes going really well, right? Yeah.
speaker-0: yeah, that's so that's so good. That's so good. I think that's I think that piece of just understanding, you know, who goes where and what that that in and of itself is a that's a leadership lesson in and of itself. Even the they call that the Peter principle, right? We all rise to our level of incompetence, which is what you just say said. And I remember if anybody knows the quarterback Kirk Cousins in the NFL, he played for a lot of different teams, but he he was from Holland, Michigan, which I I I lived in for a while and I his dad, Don Cousins, good leader, he wrote a book called Leadershift. And he talked about that in most companies. We promote people out of their genius. And he says, most companies, he said, one of the things he'd go in and consult with $100 million companies and up. He's a big consultant. But what he would do is he said a lot of times he would look at recent promotions and he would focus on bringing them back down and the company would run more smoothly. Look at the last five promotions and do a do a skills analysis and say, you're a great salesperson, that doesn't mean you're a great sales manager. Or you're a great machinist, it doesn't mean you're a great production manager or whatever. Or, you know, all the things. So to that point, man, that's a really good point. If you're gonna be press run a precision business like your book talks about, you have to be precise with that piece. I think I think that's super, super important.
speaker-1: It's one of the most essential because people are the value of the business. If you don't have you don't get that part right, it's hard to get anything else right.
speaker-0: It it it it so is, man. It so is. And I I think that we sometimes in this space, like you know, you sit down, I sit down with with owners a lot of times and they're brilliant manufacturing people. They know they're such good machinists, they understand so much about the process of making a part, and they're really good at that. And I think the business side for a lot of let's just call it engineering minded people, they just kind of think like, that's just not my skill set. I'm just, you I'm an engineer, I'm not a business guy. And that What I have realized is if you can help engineers see business as just another part to be made, it it's like, dude, it's the same thing. You're making a part, you're making a system. It's it's you gotta think about it's like you're writing G code for your office. You just have to think about it a little bit different. You know what I mean? And so it's like it's the same thing, but a lot of times we just write ourselves off, or like these engineers are so brilliant what they do, they're like, I can't do sales and marketing. And and it's like, well, you don't have to do cold calls, man. There's a different little bit of different way to do that.
speaker-1: Sure. Sure, sure.
speaker-0: You know.
speaker-1: But it is an important point and you made it earlier. I just want to reinforce it. That you know, the owner, the founder of the business gets to decide what they spend their time doing. And if you decide that you want to hire a CEO or a president so you can keep doing the technical work that you love so much, and you're just actually not you're not excited about doing the other thing, then by all means. I mean that's That's happened here in my business today, right? you know, at the beginning, like I was the sales department, right? I did a hundred percent of everything and marketing. Like it was if it had to get
speaker-0: All you yep.
speaker-1: but as we've grown, like I relinquished the sales leader role. I relinquished the marketing leader role. I definitely don't want to be our CEO. Like
speaker-0: Yes.
speaker-1: I don't I wanna touch that with a ten foot pole. Like I would be so far out of the things that I'm passionate about doing that I just would hate my days. So we have an incredible CEO. We have great leaders in sales and marketing. And and candidly, I feel like I have the best job in the world just getting to talk with you about this kind of stuff and evangelize why this industry is so important and what shops need to be doing to get better. So sometimes that takes a little bit of a you know a r a reflection about like Challenging the assumption that the owner needs to be at the very top of the org chart, you know, ultimately ultimately they might be as the share as the shareholder, right? But the shareholder doesn't have a daily role in the business. and if you hired a president that's not working out, you can replace that person. But you still could be the chief machinist and just cause you love that all day long. You know, but absolutely
speaker-0: By the way, it's lot easier to replace a machinist than a CEO. Exactly.
speaker-1: So yeah, so when you sell speaking of creating value and something that is is is, you know, sellable. Absolutely absolutely. Yeah.
speaker-0: Absolutely. Yeah. No, that's a really good point. And I think we we forget that that I don't have to be the buck stops here leader. I can actually still be a setup and machinist if that's really what I love. I can still do that all day long and still not block the growth of my company. Yeah. I mean growth the growth value of my company and the growth profit of my company. I think that's a really powerful point. maybe even one of the more powerful points we've made this whole podcast is that You don't have to be at, I mean, the fact that you're not the CEO is a really good example of, man, if I stepped into CEO, I wouldn't have time to do this. I'd be meeting with HR to make sure that's right. And meeting with our salesman, you know, I'd be doing all those meetings rather than this. I think that's a key piece that value does not stop if you step out of the lead role. In fact, it might go up.
speaker-1: know that I contribute more value to ProShop in what I do as opposed to being our CEO and not being able to do what I do.
speaker-0: Yeah, that's so good. That's so good. And I think people, especially shop leaders and shop owners, if they could get a hold of that to say, like, what you're really good at, you know what they're really good at, let's focus there. You know, one of the things I like, let's say I'm not good at sales and marketing. I'm not good at the the systems. How do I implement that if I don't even know how to think that way? How do I do that? Like, I'm an owner, I'm in, you know, middle, middle state Kentucky running a shop. I got eight, nine guys. I'm kind of at that. Precipice where, you know, eight, nine guys, two fit, you know, you're probably two, two and a half, maybe three million if I'm pretty efficient. And I want to start building systems. I don't even know how to think about it. What is the path to getting that launched when my brain just, I'm like, dude, I know how to make parts. I don't know how to make business. Like, what does that look like? How what do you do?
speaker-1: I think there's a few avenues. first you gotta read books and listen to podcasts. People that have done this before. They're people have talked about it, people have written about how they do that exact thing. And then you gotta get out of your bubble. You gotta build your network, go visit other shops. You know, it used to be and I'm sure there's still pockets of it where, you know, every shop owner was like, There's no way any other shop owners step and foot step and foot in my shop like You know, you stay over there, I s I'm I'm gonna I'm gonna protect my little thing over here. It's
speaker-0: That's a nineteen eighty.
speaker-1: becoming so much more collaborative where shops are like, Yeah, come on, come on into my shop and I'll visit yours and we'll share best practices and and I'll tell you how I challen I d I solve the problem with sales and marketing myself, right? There's so much work to go around. if you get into this sort of growth mindset as opposed to sort of, you know, protective. There's just it it opens up so many avenues that it's just, yeah. So I'd say that would be the other big one. Go talk to people, ask them how they've done it, go on LinkedIn, ask the question there, right? You'd be amazed how much who will who will come out of the woodwork and just be very op open and honest about what they did and the mistakes they made. And just start learning that way. And then
speaker-0: Hold it.
speaker-1: Start putting in place what what seems to make sense and learn as you go
speaker-0: I I love that. Number one, the network getting out of your bubble. I mean, we were just at IMTS a few short weeks ago. I mean, if you don't are if you don't walk away from IMTS excited, you need to hang it up. I always walked away two things. I I call it event hangover. I walk out exhausted and I walk out inspired. but that being said, going to places like that, or I think the the top shops or modern machine shop, one of the shop conferences is coming up here pretty quick or next week. Yeah. So like places like that where you can rub shoulders. Getting involved in your local manufacturers association, just NTMA,
speaker-1: May PMP A
speaker-0: yep, all of those. But one thing that I have seen shops use is let's say they don't have an ERP. By the way, if you don't, Paul is the person you need to talk to. You need his system in your shop. But let's say they bring in the value of bringing in an ERP, is you get some coaching with that. Like you get some help, understanding. Like there's some there's some real valuable coaching and learning that happens. I mean, you guys aren't just an ERP company. I've always said, I feel like you guys are more of a training company with a software than a software company with training. Like you guys really are, could be an add-on for business development, not just the software, right? And so there's pieces there. I I interviewed while we were at IMTS in the making chip studio, I interviewed Dave from EBITDA Growth Systems. He's yet another, another business that comes in. He knows a lot of systems and he comes in and helps where people aren't as strong. You could bring in a company like that or like a Pro Shop company. that knows things you don't. You're not gonna pay them as much as a yearly employee high level leader. You're gonna be able to get that much less and a heck of a lot of value. And so another way is just get some industry experts that know what you don't know. You know what I mean?
speaker-1: It's a great point. It's a great point. Yeah. You know, and consultants or software companies or whatever can definitely bring value, you know, that that you you know you might think you, you know, have a a good sense of how to do something today, but you know, in unless you kind of open your mind and be open to learning, you you might realize that there's a whole different world that you knew nothing about that's
speaker-0: Absolutely.
speaker-1: relevant. Probably one of the most tangible examples of this. is my buddy Jamie Marzilli, Marzilli Machine Works up up near near Providence, Rhode Island. He he ran his shop for ten years, started he was a master machinist, you know, programmer at at companies. D his wife challenged him to start a start a shop. He did When he went through training with us, he just had epiphany after epiphany that he realized that he thought he was really good at running a shop. And he realized he had n almost no idea about how to actually do it well. And he he said that going through that was like taking a college level course on how to run a machine shop properly.
speaker-0: Bingo.
speaker-1: And so, you know, he's flourished since and the business has grown so much faster than it had the previous years. but to that point, and Dave, you know, at Ebra Growth, like they're a good partner of ours. We have many shared clients, and the combination of what we offer and what they offer is just a really powerful combo. so yeah, I you're right. Getting getting help from people that that really know what they're talking about can also be a huge unlock in how to run your business better.
speaker-0: You know, we lost a key programmer at one of our shops. it was a real small one, the first shop I ever bought, Kiki programmer, like the only guy that could program. And I found a guy down about four hours away that did some contract programming for me just to fill in the gap. But my point in saying that is every sticky point of your shop, which sometimes you need a company like Pro Shop or like EBIT or Growth to even show you what the sticky points are. Sometimes our awareness doesn't even bring those to light. I don't even know there's a sticky point, right? It's kind of I don't know what I don't know kind of thing. But every sticky point, there's a solution you could pay somebody that that's what they do best. And they would sell some of their time to you to effectively change that problem or fix that problem. And I think that we don't do that enough, in my opinion. Now, I came from a different world. So consultants are kind of like almost the the propellant northeast. Like you you pay them just to get to the next level. Now I will say there are a lot of poor consultants that don't do good work and don't share good info. So don't don't just go throwing your money at anybody that's on LinkedIn. Yes. Yes. Make
speaker-1: Yeah.
speaker-0: sure they've got some good referrals. But I say that to say, whether it's Pro Shop or even a growth or companies like that, it's you there, there's so much training there that isn't just, hey, here's how to, here's how to implement an ERP. It's how to think about business. Kirk and I say this all the time. We were talking the other day, like we were talking about an AS 9100 audit and and get you know that certification in the way they tell you and and and partnering it with a with with pro shop and we're saying you know this is this is a you know you you need to do certain things to keep your audit but we're like this is really just the way to run a business anyway like even if you had to it's it's not like we got to do this to get our audit or to get our ERP it's like this is just the way to run a business anyway, whether you ever did went through it. You know what I mean?
speaker-1: Yeah, I mean the stats do say that companies that are ISO or AS certified are generally more profitable than those that aren't. And there might be because they're serving mark you know, markets that that
speaker-0: Yep. Maybe higher margin markets.
speaker-1: More more more margin, yeah. But yeah, I think there's a lot of just causality of you're putting better business processes in place, and that's just generally a good idea to the point of this whole episode. and it makes it makes the systems help stop fires before they become fires. They just do. firefighting
speaker-0: Yeah. That's so good.
speaker-1: is just what kills profitability in shops, you're right. You You know, I often talk about, you know, this being the hardest business in the world. And there's a thousand ways a job can go wrong. And if you quoted something with a ten or twenty percent margin, it doesn't take much for that margin to be negative because you missed a little detail or you didn't have a system in place that caught caught that thing or or made sure you had that special tool before you needed it and the machine is sitting idle for a day and a half while you overnight something in, like, There's just so many ways that this business can get along. Unique
speaker-0: Yeah.
speaker-1: it's unique compared to all other types of blue collar businesses. Right? When you have a plumbing business or a contractor, they are first of all, they're not nearly as capital intensive as what we have in machine.
speaker-0: Not even close. Not even close.
speaker-1: And they're competing largely in a regional area. You know, our shops are not only more technically challenging, you're hitting tenths versus
speaker-0: Yeah, way more technical.
speaker-1: but you need, you know, hundreds of thousands or possibly million dollars worth of equipment and you're competing with people at least all around the country, if not globally. So you just gotta have everything dialed in to make that margin and build that value that ultimately will turn into something that endures past you.
speaker-0: I love it. This conversation has been so powerful. And I really, really hope if you are listening today, I really hope you understand the value of treating your business just like you treat your part with precision. And I love what even the title of your book. It you know, w when we were creating our core values at my first company, one of our core values is precision in everything. And one of the reasons we made that core value is because being in precise in everything. Meaning we show up on time. We're not eight minutes late to a Zoom meeting. We're not because that's not precise. That's not what we that's not what we said. And I'm not things happen. I'm not saying that enough. But I'm saying like precision in everything is one of our core value. Even precise in communication. We don't just throw words out there. We make sure that we we communicate in a precise way. And and you know, our Slack channel is not for blowing up because you're ticked off the net leader. That's not a precise, that's not a precise way to communicate. So my point in saying all that is The point of your book is is is so valuable. And so let's as we we could talk about this for days. But as we wrap up, Paul, first of all, let's quickly, I want everybody to make sure you get a copy of this book, Precision Manufacturing, Precision Business. Where can we find it? Where can we get it? How do we get a copy this?
speaker-1: Yeah, Amazon is the easiest place. it's ebook, paper paperback and hardback. and I am in the process of starting to record an audio book version as well.
speaker-0: For you audible lovers, it's coming. I love it.
speaker-1: There's lot to learn and I you know, people have asked please do it yourself, don't hire someone to do it and so I I kinda wanna respect that and do it myself. But yeah, I'm learning about all sorts of things that I never never understood before. So Welling
speaker-0: And because of your podcast, people know your voice and hearing your voice on the book will be a I think will be a value add. I think that's a good good call. have your have your voice do that. So go to Amazon. We will also put the link to that book in the show notes. So please just go down in the show notes, click that link, head on over, snag a copy of that book. Please just do yourself a favor. Make I mean read a chapter a week, get through that book in a few months so that you understand. a little bit of what you're up against in creating a precision business. Paul, again, thank you for yet another value add to the industry. I'm I'm really grateful for what you do for the entire industry as a whole, but also as a friend, I appreciate you, brother. Thank you for hopping on with us today and ja just jamming on some powerful stuff.
speaker-1: You know, Mike, I love talking to you. W we know when you when I had you on my show the first time, we had so much fun, we immediately recorded a second one. I love it. Just can't stop this. So just absolute pleasure to j to talk with you and thank you for what you're doing. You know, the the the mission of helping shops not close their doors is so important right now. that yeah, we can't bring too much attention to this this problem.
speaker-0: I could not agree, especially with the silver tsunami you mentioned. We have a lot of fifty-five to sixty-two-year-old owners approaching retirement and don't have to just shut their doors if they would pick up this book and even put a couple of systems in place. They could they could sell it and keep the legacy alive, right? and so appreciate you, brother. Again, make sure you snag a copy, Precision Manufacturing, Precision Business, link in the show notes. And if you don't know, we'll also put Paul's podcast in the show notes. He runs a couple amazing podcasts. One of my favorite is a Machine Shop Mastery, the first podcast I ever found and listened to in this space. We'll also drop that in the show notes as well, a link to his podcast to make sure y'all are are if you're in manufacturing specifically, precision manufacturing, or any machine shop business, you need to be following that podcast as well. So, Paul, again, thank you, brother, and we will definitely jive on a new.
speaker-1: Sounds good. See you around.
speaker-0: Thank you for listening to Manufacturing MA with Mike Fritz. If you found value in today's conversation, be sure to subscribe, leave a review, and share this episode with a fellow manufacturing owner, operator, investor, or acquisition entrepreneur. For more insights on building stronger, more valuable manufacturing companies, follow Manufacturing MA on LinkedIn. Until next time, keep building companies worth owning, worth growing, and worth passing on.
speaker-1: Mm-hmm.
speaker-1: Thanks, Mike. Good to good to be here with you.
speaker-0: Thank you so much. And man, so so you and I got to touch base a little bit at IMTS, but it's been it's been a few a batch of months since you and I have sat down and just had a good conversation about what we love. And so man, I mean, guys standing in a machine, sells a company, starts an ERP system. How does the how does a guy like you take time to write a book? Tell me, tell me like what's the passion behind this book, first of all. And how in the world did you find time to do it?
speaker-1: Yeah, sure, sure. I mean, the passion really came from hearing hundreds of my own guests on machine shop mastery, manufacturing transformed, and some of making chips. And just these incredible founders, business owners, multi-generational, you know, shops out there that that in some ways are just absolutely kicking butt and taking names and in other ways are fighting the same challenges over and over and over again. absolutely. And just and and so, you know, that some people listen to podcasts, right? those that are listening, they do that. Some people don't. and they don't learn. Even some people that listen to podcasts don't learn through listening as much as they do through seeing something on a page and reading it. Sure. It's just the way their brain connects. Definitely I know I'm more that way and I need to like be able to look at it and like read it over and highlight it and like circle stuff and You bet that's how I learn best. And so as I talked to folks, I wanted to you know, provide something that was a resource for them to digest hundreds of hours of podcasts in a book they can read in a few hours and and come back to and revisit and and really kind of dig into. So that was the motivation for for for writing this thing. I love
speaker-0: I love it. One of the things I love about your journey is not only were you a machinist and you understand the perils of the shop floor as good as anybody, but you took the second, I'll call it the second tour of your career to really give back to the shops. not only through a really powerful software that really helps people buy back their time. And in my opinion, one of the ways, there's many, but one of the ways to add a lot of value to your business. Absolutely. is is adding in an ERP system. And again, I know that's not our combo today, but what I love about your story is that second phase of your career was was really of course it's a business, but it's also a a real passion and give back. And that's what I've loved about getting to know you over the last three, four years is you're not just a machinist that retired and bought the beach house with his wife, man. I mean you you really are still giving back to the shops. And this is what I love about this book. because this isn't, you know, this isn't a quote unquote Pro shop book. It's not a it's just a book that you want to you want to to boost companies. I love it. And so tell me, you know, you yours you're with shop owners all the time. I am too for a different reason. And we hear, I guarantee you, we hear a lot of the same issues. We hear a lot of the same issues of bottlenecks, could be revenue bottlenecks, could be throughput bottlenecks, which by the way are pretty much the same thing or have the same same DNA. Could be revenue bottlenecks, could be employee bottlenecks or Capacity bottlenecks, it could be kap capability bottle, it could be capability voids or too much capabilities, they're not selling. So many things kind of hit these shop owners. When you wrote this book, what are some things that you're like, you know what? If you've got you're making precision parts, how do we also take that same mindset and transplant it to a precision business? What are some of let's call it those cornerstone op ideas that shop owners can get and really start driving their company? to more profitable and more valuable.
speaker-1: Yeah. I mean there's a lot to it. But in in a nutshell, as you said, you know, a lot of shops are started by people that are technically capable in the craft, right? They absolutely a machinist, a tool and die maker or some something like that. And sure. They think that if they're good at that, they will be good at running a business that does that. And yeah, hopefully there's enough co hopefully that's the word is getting out now enough that that's just just not necessarily the case. No. Some people have a natural proclivity to it, many do not. and so just, you know, we we in the and I and I, you know, the other thing that was really important to me in this book is getting the voices of the industry in it. So I quote directly over 50 different shop owners from different podcasts that I, you know, have done over the years, you know, where where it makes sense in the in the flow of of the book. and so I definitely wanted this to feel like a collaboration with the industry. For trying to support itself in the industry. It's not just my words for sure. So, I mean, there's I guess in a nutshell, so many shops and businesses out there do not spend the time to invest in building the systems that are gonna help the business run more profitably, more systematically, more decoupled from the owner. Umpowering a team. I think I learned it from you. empowering a team. that really owns their outcomes and owns different parts of the business. And just let's let's the owner become sort of the most, I don't know, I would almost want to call it self-actualized version of themselves, where they are the architect of the business. They are defining the vision, making sure the capital's in place, making sure the resources are there, but they're not in the weeds every day, right? They and in chapter 11, I think we we talk about. The six stages of ownership. And this is in the same chapter where we talk about breaking through different revenue you know, yeah levels, two million. Revenue ceilings. Yep. Sure. 'cause it's all the same topic, right? It's all the same topic. You're a a business will never grow bigger than what a what a business owner or leader allows themselves to grow past, right? So
speaker-0: Hundred percent. Hundred percent.
speaker-1: If they're in the weeds, if they're directly managing machinists on the floor and talking to customers and they're just never gonna grow into a ten million tw you know, bigger business. It's just gonna hit the ceiling. so a lot of that growth has to happen on the individual level for the business to do the same thing. Yeah.
speaker-0: Yeah. No, I love I love this, Paul, because I I mean we are I sit with sometimes I sit with owners when when in my role as an MA guy trying to help them exit their company and it breaks my heart. Dude, I spent the last 36 hours, no, 48 hours, in a shop that we were moving out machines, just shutting a shop down because an owner did not know this stuff. Brilliant machinist could program anything in his sleep in the industry with machine. Buyers, he was he's a legend because they never sent him a part he couldn't figure out and get done to spec. He was just brilliant. And I'm sitting there, I'm watching the riggers take out machines and just seeing the the skeleton of once was a th a really powerful company because this stuff wasn't implemented. And when and it breaks my heart when I sit across from an owner and I'm I have to tell him, Man, your shop is not worth anything because this stuff wasn't applied. So I I pray, I really hope people can get your book, let's call it five to ten years before they sell. Right. And really if they're going to sell. And by the way, even if you're gonna pass it to your kids, don't pass them a mess. Do this stuff first. You know what I mean?
speaker-1: All this is worth doing, even if you plan to have it until, you know, you're ninety years old and you just
speaker-0: Absolutely. A hundred-year-old shop passed from generation to generation. You're just doing your next generation a gift by doing this stuff. Right. You know, and so so to your point, you know, you sit you you you are with in shops with your with your software all the time helping shops reorganize, rethink the way they do business, rethink the way they do, even rethink the way they actually do part flow and and floor work. What are some of those systems? Let's let's just like hone in on one or two systems that you think have maybe the most bang for the buck where an owner could start. Cause you have this, you know, I've always said you can machine your way to two million, you have to systematize your way above that.
speaker-1: Yeah.
speaker-0: Almost to every level above two million, you have to systematize your way. You can horse and grind a two million, but but that's about it. Then you gotta go, you gotta systematize to 10 and systematize to 20 and blah, blah, blah, blah, blah. Yeah. And so What are some of but when I say systematize, built within that word and that DNA of that word is a lot of subpoints of systems to implement. And so what are your and what is what is your thought of a couple of those systems that tend to have they're a really good place to start if an owner truly is his boots are dirty every day because he's out on the shop floor.
speaker-1: Yeah, his or her. So his or her, yeah, the guess. well, the first thing I will say, which is I think just truly a foundational, important point, you have to get rid of paper off the shop floor and in the office. Like it absolutely just just strangles the growth and the free flow of data in in a company. Like to such a degree that people just don't realize. And when you do that. And then you build in systems for, you know, a system for sales and marketing. Like you have to have a system. Like, you know, I I use this term positive sales pressure, where you have more RFQs than you have capacity. And so you can start being selective about what you take on and you can start raising your prices and improving your margins. So a system for that. When you win that work, a system for for quoting it. You have to have a system for doing contract review so you don't miss the important details and get rejections later because of the right material spec or you didn't get the right, you know, NADCAP plating company or whatever it might be. Whatever
speaker-0: But well, and people often will I mean how many times do we see this? no, that's not Rev One, that's Rev Two. And I didn't have a way to separate between Rev one or Rev two. And so on I'm doing all my processes to Rev One when that's not even what I I need to do. Right. And so people because of this system not being in place. So
speaker-1: Processes for document management and rev control, processes for procurement, processes for not only manufacturing planning, but quality planning. That has to kick off right at the beginning. and to back to the point about paper, if you if you're on paper, these things all have to happen almost in series. Right? Yeah. One person gets the packet and then they do their stuff, and then they hand it to the next person. It sits in their inbox and hopefully it doesn't fall to the bottom. 'cause we all hear the stories of, you know, and I can remember in the early days of my shop, you forget about a job entirely and a customer calls you the day after it's due and they're Hey, where's my parts? And you're like, What parts? You're like, shit. It's at the bottom of Lacey's stack. and by the way.
speaker-0: by the way, I am I don't know if every shop has done that, but I know that we have gotten a call from a customer. We have.
speaker-1: Yeah. So you have to have systems to to not have that be the case.
speaker-0: Definitely that.
speaker-1: And then yeah, I mean, making sure all that information ultimately gets to the setup machinists so they can do their job. The job is kitted and prepped and ready to go. They're not spending hours and hours running around the shop looking for tools and the right class of tap and making sure that their fixture is there and just like it's it's mind blowing how much waste there is on a typical shop floor with people literally just walking around looking for stuff. if that's If that's the owner, then forget it. They're not doing anything else important that day.
speaker-0: Bingo. Bingo. And I I love this part because it's first of all, it's so practical. It's getting the papers off the floor. That is so freaking practical. It's so practical of getting everything in a system on a server. and how I mean, obviously how you save that is all dependent on what certs you have and how you have to communicate with your customers. So what it looks like may be different. But that it looks like with no paper is is incredibly valuable. I think that is so powerful. Of no And to that, to your point, you just doc I'm like you were just walking through even with this no paper is having some sort of, I would assume, some sort of flow chart of information, some sort of like this person gets this, then this person does this, then this, so that everybody understands if we do have a system break, we know where to go to fix it, you know.
speaker-1: Yeah, this whole idea of even starting at the very end of the flow, like someone creating an invoice. Yeah. And then this idea of an internal customer and what what you need upstream to deliver to your internal customer to make sure they know exactly what to do. They're not gonna make mistakes, they can do it efficiently, they can hit targets or whatever, you know, the case might be, is such a an important concept. And I don't think enough shops think about it that way. but it does help structure just yeah, that that flow of data and making sure that, you know, at er at every point the I's are dotted, the T's are crossed. Cause, you know, in in the value stream of making parts, the machining process itself is probably a fairly small part of everything that has to come together, right? For for you to deliver a successful invoice that gets paid, like as to Mike. You know, Mike Payne famously talks about that. Like, we're in the business of delivering invoices that get paid. Right. That's what we that's what we actually
speaker-0: Yep. Yep.
speaker-1: are. If the package isn't right, if the first article's not right, if the C of C isn't right, like it doesn't matter that your parts are perfect. You're not gonna get paid any. So and
speaker-0: Yeah, yeah, hundred percent. A hundred percent.
speaker-1: then you get into cash flow problems and then you, you know, go out of business. So, so yeah, all that stuff has to be really well systematized, well documented. And and it in in this day and age, as we're also at this point where the silver tsunami of machinists at the age of I think average age of like fifty-six years old, or later, they're gonna be retiring. And they're so much tribal knowledge in their heads that documenting it on paper or not at all is just not an option. It has to be documented in a system that other people can access, other people can contribute to. It's easy to find. You can't lose it on the top shelf in the bathroom, which is actually a story that came from one of the shops I visited.
speaker-0: Yes, that's crazy.
speaker-1: They had a traveler missing for months and completely had to remake parts and recreate everything. And the dock pack was on a a bathroom shelf. I mean, that kind of thing just cannot happen in a business that's gonna survive and thrive.
speaker-0: Yeah, I think what one thing you said there that I want to double click on because I think is so important for especially owner operators to know. Cause often I feel like a lot of this book and what I love about the structure of the book, it feels more like a round table than it does, you know, you teaching the industry, although you've taught the industry much. But I'm just saying, like it felt just like a round table discussion, which I think is freaking so powerful in my opinion. And one of those things is you you you a lot of these owner operators, which is what really a lot of this is going towards, they they think about the machining piece most
speaker-1: Yep.
speaker-0: when it is often you think about it. Let's say a part has a, I don't know, whatever, full, you know, 22 minute cycle time. What I don't care, whatever. Let's say it's got a 22-minute cycle time. Think about all the work it took to get the job, quote the job, win the job, order the material and get that part on that machine. For 22 minutes of of fame. You know what I mean? It's like we always said the I always I always say like a football team literally makes billions of dollars on eight four-hour window home games a year. Like they
speaker-1: Right.
speaker-0: they spend all year to optimize eight three-hour windows. And the machining industry is a lot like All of the stuff leading up and my and what you just quoted, my pain is 100% right. We're in the business of sending invoices and getting paid. But that's for a what a 22-minute part, like and we focus there of making sure you know the programs are right. And of course that has to be right. That's a given, you know. But but and then we don't do what you're teaching in this book of be be as precise with your system as you are with your part.
speaker-1: And I love that football analogy. You know, if you take that to you know, to a conclusion, like if they didn't do all the prep work for those games, and it was just a mess trying to get people in the stadium and the announcers didn't know who the players were, and
speaker-0: Exactly.
speaker-1: you'd be like, What the hell is going on here? Absolutely. But
speaker-0: Absolutely.
speaker-1: we accept that in our own businesses all day long. Right. Someone walks up to a machine, they're like, What's what am I making next? You know, where's the where's the G code? What what's where's the tool list? Like it's just it it cannot happen. So anyway, that's that's a large part of the premise of the book. But it it all you know ultimately in in the last three chapters are about either, you know, selling the business, keeping it, or you know, transferring it to your kids or you know, a next generation. So because ultimately that's that's why we're I mean, yeah, I mean a business. can make you a good amount of money while you're running it. but ultimately people have so much tied up in that business, it's just an absolute tragedy if it just disappears. So
speaker-0: Absolutely.
speaker-1: I and I and I've absolutely seen that happen, you know, or talk to one of my clients in his 50s, just kind of had assumed that he would just one day just wind it all down and Close the doors and sell it off. And like as he started to really kind of grasp what was happening in his business as he, you know, was sort of implementing everything, he's like, that doesn't need to be my outcome. He's like, I could actually build something that someone else wants to buy. I'm like, absolutely, of course you can. Like and isn't that a better outcome than just, you know, not only the monetary gain at the end, but just to know that your baby that you put decades of blood, sweat and tears into is gonna continue to grow and flourish into the future and retain those jobs and support that accoun that local economy. I mean, my gosh, it's so important.
speaker-0: It is, it is.
speaker-1: And to the point that you were talking about earlier, you know, being in the shop and watching these machines leave, during one of the episodes Machine Shop Mastery just a couple months ago, when I was recording with Gavin from Rain Manufacturing up in Boston or near Boston, he saw a Facebook ad for a I think a like a Bridgeport mill. And he went out to the to this guy's place to see it a couple hours away. And it was a guy in his I think he had his shop for like thirty-seven years or something like that. And he was selling this mill and he told Gavin, he's like, Hey, do you want, you know, any other stuff? Because I have to be out of the building, you know, by the end of the month. And my you know, he didn't even own the building. and he's like, I'm just shutting the whole shop down. So, you know, they worked at a deal, he bought like four. Three C and C machines, all the inspection equipment, all the he bought the entire shop for pennies on the dollar just because this guy, like the one that you just described, had not put in place any of the things to make his company where someone else would want to take it more than penny. And it's just it's just tragic.
speaker-0: It's it is tragic, man. It is tragic. And that's why I love what you're doing and what my passion is and why I wanted to have you on here because if we can get these owners soon enough, because people I want people to think about profit helps today, but value really builds tomorrow, right? And so you have to think about both. You need to think about profit today, because if you don't have profit, you don't have value either, you know, because profit's what you pay your yourself out of and whatever. But man, if people could just do the the the thing is, we're not even necessarily asking them to do a bunch of different stuff. We're just saying we just want what you do to be documented in a certain way so people can understand it. We want so it's not like we're asking you, hey, you're a machine shop. We need you to change over to being a fab shop. We're not asking you to change disciplines. We're asking you to just document your discipline, which I love that about. Which you know, your your podcast, and I've told this story before, was the first podcast I ever found in this space. And when I started listening to it, all these shop owners of how they were growing shops and what they were doing. And that I what I love about your podcast, it's so eclectic on ownership. There's owners that are still in it, owners that run it from afar, owners that are setting up because they love it. I just love the eclectic nature of it. But one thing continues to remain is we have to help people see this precision idea. Move to more than just the part itself. Have to
speaker-1: And you know, the activities that that they need to do to build value are not mutually exclusive to doing the things that make profit tomorrow. They are actually not at all.
speaker-0: It is a all it I would say it's just about a hundred.
speaker-1: But sometimes they don't perceive it that way. They're like, I got this job. I just need to throw it out to the floor real quick. Make sure they, you know, can start on it right away. And it's like, no, you need to slow down a little bit, do do a planning process, make sure, you know, all these things are ready to go, and then very carefully hand it to the shop floor. And they're gonna run with it far faster and further than you can than they will if you just throw it over the wall.
speaker-0: Hundred percent.
speaker-1: and yeah. The jobs will hit target, they'll make more margin, there'll be less stress. You'll you won't burn out your folks and have them possibly leave because it's freaking firefighting all day long. Like yeah. So many benefits from doing the thing that creates value just today in the shop to make it be a nicer, better place to work.
speaker-0: Absolutely. Let's dive into that systems more because having no paper is really good. we talked a little bit about some of the team structure, which I know you've talked a lot about. And I use the word decoupling and trying to decouple yourself from daily operations. By the way, I want everybody to hear this. That doesn't mean you have to stop doing what you love. If you love a certain part of the business, please don't remove yourself fully from it because you're you're, you know, this is actually I did this in reverse when I bought my first shop. I got really heavily involved in operations and I realized. I was doing more damage than good because that's not where my skill set laid. I needed to get out of that and stay in MA and help us grow through to through buying shops rather than help the machinists figure out where the part was gonna go. Right. I had to do it almost in reverse. But don't stop doing what you love. But in that team structure, what does that look like if I'm gonna if I'm gonna grow the value? And and and I I want to hear from your perspective. I obviously have some thoughts on this, but what do you what do you see on the how do you grow your team or structure your team in a way? It almost is a system in and of itself, and what does that look like?
speaker-1: Yeah. I mean, starting at the beginning, of course, you know, it when you're when your shop is first new and it's only, you know, the founder or the co-founders, right? You're doing all the work. Like 100% of everything is you. To
speaker-0: Yep. A hundred percent.
speaker-1: the point where, you know, you have enough demand, you have enough revenue, you have enough profit to support another head another head, another salary. then you you know, I mean, most shops probably hire a machinist next. some people hire someone in the office. It just kind of depends on, you know, how how they decide to do it. but you're essentially offloading things that you can work on higher value work as opposed to doing the thing that you're replacing, right? And this absolutely this comes right back to the whole emyth, you know, book that I talk about so so often, probably too often. Yeah. Yeah, that's a great book. It's
speaker-0: Yeah.
speaker-1: just so spot on. you're basically buying back your time to you know, do more high leverage things. Exactly.
speaker-0: You do. Yep, exactly.
speaker-1: but you're still in direct communication with those folks, you know, and and hopefully you're you have a a good job description, you have a list of sort of KPIs that they are responsible for. they know what good looks like, they know what's expected of them, and you're giving them all the tools and resources to be able to hit those.
speaker-0: To do that thing. Yeah, sure.
speaker-1: If you're not, you're setting the whole system up for failure. so you can do that a few times until you have I don't know what the number is, you know, five, six, seven, eight people, where it's just too much to be able to manage that many folks. And then you need someone, you know, in between you and them. So like a shift lead or a production manager or or an office manager that's that's helping facilitate bookkeeping and quoting or you know what have you. So and then again, at that level, you need the systems of what what's r you know what those people are responsible for and how their teams, you know, how that flows down to their teams. and, you know, just come at it from like a really sort of logical person, you know, perspective of if if I'm gonna start adding more bodies into this organization, how do I make sure that everyone continues to, you know, do well, enjoy their job, know what's expected? because you know the way I think of it, most employees, and there's an occasional bad apple, but most employees are there to work really hard. They want to do meaningful work. and if you facilitate them doing that, that's just a great situation. If you know you you micromanage, you don't give them the resources, you don't provide the systems to tell them what good looks like and making sure they can actually do that work well and feel satisfied at the end of the day. that's just a recipe for a lot of hardship. So You know, and ultimately when you get into, and I don't know really above seventy-five. That's where my shop was when we sold it, right? But we had you know, definitely, you know, people leading, you know, sort of HR and procurement and you know, programming and planning. We had, you know, quality manager, QMS coordinator, we had leads on all the four shifts. then we had the whole, you know, team underneath them. doing the actual parts and inspections. But at every level, you know, the the the reporting has to be clear. The org chart has to people have to understand what the org chart actually looks like and and then have include systems for making sure people can improve the system itself. Like having having a a vehicle, a mechanism for continuous improvement, I think is absolutely paramount for providing information back upstream, oftentimes as companies get bigger, there becomes a divide between sort of like the office overhead staff and the manufacturing staff. And sometimes that that gets contentious. That
speaker-0: It does, yeah. That's a good point.
speaker-1: is that does not have to be that way. You can still have harmony and you know a good facilitation of of data back and forth. Partly this comes back down to paper again. It's amazing how paper creates that block sometimes.
speaker-0: Yeah.
speaker-1: Anyway. maybe I've gone on on enough of that, but
speaker-0: No, that that's a really good point. No, I love this that because I think that if you're going to systematize your paper out, the most valuable part in any company, right, is the people, right? It's the most valuable part of a company, is what they can accomplish. Yep. With or without you, quite frankly. Without you adds more value, but even with you, you can only do so much. And I think systematizing this team, I mean, you talk about precision manufacturing, precision business. There is no more important piece to a precision business. Than having precise people and having people in the right roles, doing the right things, relieving you of the right duties. And you know, you used a word that that that's what I love about talking with you. You used a word earlier called self actualized, which isn't a word that the engineering space or precision manufacturing uses very that's a little woo-woo for our space, right? But that being said, I wanna also underline that that I think there's a there's an important element here in systematizing your team. To to increase in your self-awareness on what you're really not good at. because I to your point, I mean, I realized two things. One, the closer I got to ops, the the the the more I muddied things up. So I had to realize like that's not my goal. But I've realized as I work with Kirk Phelps, he's probably, and I don't know you, so don't take offense to this. He's probably the smartest metal maker I've ever talked to. that dude I mean, literally, what he can do with metal is like he's a magician. Like he is so good with metal. And I've realized I had him in leadership and he's an excellent leader too. But I realized he our company runs way smoother the closer he gets to metal. And so, like, and I don't need him standing in a machine. That's a waste of his time. But I need his brain to be transplanted into our machinist's brain, or else he's gonna die with all that information in his head someday. And so,
speaker-1: Sure, sure.
speaker-0: so it's like knowing where you which your leaders and and you know and and even he's like you know the the further he gets for metal the the more he's he's learning which is great the closer I get to metal I'm learning so it's it's just it's a different way of of of of of process but to your point as you're building this team man y you gotta know what what you're like this is not my cup of tea I gotta I gotta bring somebody else for this piece right and and as you build that team for value how did you do that when you were building your guys' company and even Pro Shop and you've built two successful companies at this point, l at least that I know of, maybe of more. But what was your process of getting yourself out of the the pins and needles of the day? Who did you how did you leverage that? How did you train that? What did that process look like?
speaker-1: Yeah. it's a great question. And and it does require some self-reflection about what you actually enjoy doing, what you're good at doing, and what what you really should have no business you know.
speaker-0: A hundred percent.
speaker-1: Sometimes that's the hardest process is is really doing that work and and being humble about it and being like, Yeah, I'm actually not great with with with finances, with you know, with people, with HR. So I'm marketing. I'm a terrible estimator, like whatever it might be. and so that's the first part of it. and then the other part, which is also a skill set, is understanding what people are gonna be good in those res those various roles, right? Yeah. All the sure the right people in the right seat of the bus, as they you know, the old saying goes. So yeah, And sometimes we make terrible mistakes hiring someone in a role that they are totally inadequate for, right? And and sometimes it's someone from the outside and they have a you know, they have a good resume and they're they're a slick speaker, but when you get in you realize that they don't know hardly anything about what they're talking about or or or maybe they're technically good, but they're terrible with people and like it's just not gonna be a fit. So yeah sometimes there's this this whole idea of you know, of giving people you know, promotions to their level of incompetency, right? You're like, someone's a great machinist, therefore they should be the lead of all the machinists. And that is often a terrible idea because you you've taken them away from the metal that they're really good at. and you put them in charge of things where, you know, there's a lot of people skills needed and they need to think more systematically about process and making sure everyone has the resources they need to do their work. And yeah, they're great at troubleshooting when you have a problem that needs to be solved. and they'll often probably gravitate to to put their attention and passion to that and maybe not put as much attention on the things that that really matter, all those other parts of it that lead to that twenty two minutes going really well, right? Yeah.
speaker-0: yeah, that's so that's so good. That's so good. I think that's I think that piece of just understanding, you know, who goes where and what that that in and of itself is a that's a leadership lesson in and of itself. Even the they call that the Peter principle, right? We all rise to our level of incompetence, which is what you just say said. And I remember if anybody knows the quarterback Kirk Cousins in the NFL, he played for a lot of different teams, but he he was from Holland, Michigan, which I I I lived in for a while and I his dad, Don Cousins, good leader, he wrote a book called Leadershift. And he talked about that in most companies. We promote people out of their genius. And he says, most companies, he said, one of the things he'd go in and consult with $100 million companies and up. He's a big consultant. But what he would do is he said a lot of times he would look at recent promotions and he would focus on bringing them back down and the company would run more smoothly. Look at the last five promotions and do a do a skills analysis and say, you're a great salesperson, that doesn't mean you're a great sales manager. Or you're a great machinist, it doesn't mean you're a great production manager or whatever. Or, you know, all the things. So to that point, man, that's a really good point. If you're gonna be press run a precision business like your book talks about, you have to be precise with that piece. I think I think that's super, super important.
speaker-1: It's one of the most essential because people are the value of the business. If you don't have you don't get that part right, it's hard to get anything else right.
speaker-0: It it it it so is, man. It so is. And I I think that we sometimes in this space, like you know, you sit down, I sit down with with owners a lot of times and they're brilliant manufacturing people. They know they're such good machinists, they understand so much about the process of making a part, and they're really good at that. And I think the business side for a lot of let's just call it engineering minded people, they just kind of think like, that's just not my skill set. I'm just, you I'm an engineer, I'm not a business guy. And that What I have realized is if you can help engineers see business as just another part to be made, it it's like, dude, it's the same thing. You're making a part, you're making a system. It's it's you gotta think about it's like you're writing G code for your office. You just have to think about it a little bit different. You know what I mean? And so it's like it's the same thing, but a lot of times we just write ourselves off, or like these engineers are so brilliant what they do, they're like, I can't do sales and marketing. And and it's like, well, you don't have to do cold calls, man. There's a different little bit of different way to do that.
speaker-1: Sure. Sure, sure.
speaker-0: You know.
speaker-1: But it is an important point and you made it earlier. I just want to reinforce it. That you know, the owner, the founder of the business gets to decide what they spend their time doing. And if you decide that you want to hire a CEO or a president so you can keep doing the technical work that you love so much, and you're just actually not you're not excited about doing the other thing, then by all means. I mean that's That's happened here in my business today, right? you know, at the beginning, like I was the sales department, right? I did a hundred percent of everything and marketing. Like it was if it had to get
speaker-0: All you yep.
speaker-1: but as we've grown, like I relinquished the sales leader role. I relinquished the marketing leader role. I definitely don't want to be our CEO. Like
speaker-0: Yes.
speaker-1: I don't I wanna touch that with a ten foot pole. Like I would be so far out of the things that I'm passionate about doing that I just would hate my days. So we have an incredible CEO. We have great leaders in sales and marketing. And and candidly, I feel like I have the best job in the world just getting to talk with you about this kind of stuff and evangelize why this industry is so important and what shops need to be doing to get better. So sometimes that takes a little bit of a you know a r a reflection about like Challenging the assumption that the owner needs to be at the very top of the org chart, you know, ultimately ultimately they might be as the share as the shareholder, right? But the shareholder doesn't have a daily role in the business. and if you hired a president that's not working out, you can replace that person. But you still could be the chief machinist and just cause you love that all day long. You know, but absolutely
speaker-0: By the way, it's lot easier to replace a machinist than a CEO. Exactly.
speaker-1: So yeah, so when you sell speaking of creating value and something that is is is, you know, sellable. Absolutely absolutely. Yeah.
speaker-0: Absolutely. Yeah. No, that's a really good point. And I think we we forget that that I don't have to be the buck stops here leader. I can actually still be a setup and machinist if that's really what I love. I can still do that all day long and still not block the growth of my company. Yeah. I mean growth the growth value of my company and the growth profit of my company. I think that's a really powerful point. maybe even one of the more powerful points we've made this whole podcast is that You don't have to be at, I mean, the fact that you're not the CEO is a really good example of, man, if I stepped into CEO, I wouldn't have time to do this. I'd be meeting with HR to make sure that's right. And meeting with our salesman, you know, I'd be doing all those meetings rather than this. I think that's a key piece that value does not stop if you step out of the lead role. In fact, it might go up.
speaker-1: know that I contribute more value to ProShop in what I do as opposed to being our CEO and not being able to do what I do.
speaker-0: Yeah, that's so good. That's so good. And I think people, especially shop leaders and shop owners, if they could get a hold of that to say, like, what you're really good at, you know what they're really good at, let's focus there. You know, one of the things I like, let's say I'm not good at sales and marketing. I'm not good at the the systems. How do I implement that if I don't even know how to think that way? How do I do that? Like, I'm an owner, I'm in, you know, middle, middle state Kentucky running a shop. I got eight, nine guys. I'm kind of at that. Precipice where, you know, eight, nine guys, two fit, you know, you're probably two, two and a half, maybe three million if I'm pretty efficient. And I want to start building systems. I don't even know how to think about it. What is the path to getting that launched when my brain just, I'm like, dude, I know how to make parts. I don't know how to make business. Like, what does that look like? How what do you do?
speaker-1: I think there's a few avenues. first you gotta read books and listen to podcasts. People that have done this before. They're people have talked about it, people have written about how they do that exact thing. And then you gotta get out of your bubble. You gotta build your network, go visit other shops. You know, it used to be and I'm sure there's still pockets of it where, you know, every shop owner was like, There's no way any other shop owners step and foot step and foot in my shop like You know, you stay over there, I s I'm I'm gonna I'm gonna protect my little thing over here. It's
speaker-0: That's a nineteen eighty.
speaker-1: becoming so much more collaborative where shops are like, Yeah, come on, come on into my shop and I'll visit yours and we'll share best practices and and I'll tell you how I challen I d I solve the problem with sales and marketing myself, right? There's so much work to go around. if you get into this sort of growth mindset as opposed to sort of, you know, protective. There's just it it opens up so many avenues that it's just, yeah. So I'd say that would be the other big one. Go talk to people, ask them how they've done it, go on LinkedIn, ask the question there, right? You'd be amazed how much who will who will come out of the woodwork and just be very op open and honest about what they did and the mistakes they made. And just start learning that way. And then
speaker-0: Hold it.
speaker-1: Start putting in place what what seems to make sense and learn as you go
speaker-0: I I love that. Number one, the network getting out of your bubble. I mean, we were just at IMTS a few short weeks ago. I mean, if you don't are if you don't walk away from IMTS excited, you need to hang it up. I always walked away two things. I I call it event hangover. I walk out exhausted and I walk out inspired. but that being said, going to places like that, or I think the the top shops or modern machine shop, one of the shop conferences is coming up here pretty quick or next week. Yeah. So like places like that where you can rub shoulders. Getting involved in your local manufacturers association, just NTMA,
speaker-1: May PMP A
speaker-0: yep, all of those. But one thing that I have seen shops use is let's say they don't have an ERP. By the way, if you don't, Paul is the person you need to talk to. You need his system in your shop. But let's say they bring in the value of bringing in an ERP, is you get some coaching with that. Like you get some help, understanding. Like there's some there's some real valuable coaching and learning that happens. I mean, you guys aren't just an ERP company. I've always said, I feel like you guys are more of a training company with a software than a software company with training. Like you guys really are, could be an add-on for business development, not just the software, right? And so there's pieces there. I I interviewed while we were at IMTS in the making chip studio, I interviewed Dave from EBITDA Growth Systems. He's yet another, another business that comes in. He knows a lot of systems and he comes in and helps where people aren't as strong. You could bring in a company like that or like a Pro Shop company. that knows things you don't. You're not gonna pay them as much as a yearly employee high level leader. You're gonna be able to get that much less and a heck of a lot of value. And so another way is just get some industry experts that know what you don't know. You know what I mean?
speaker-1: It's a great point. It's a great point. Yeah. You know, and consultants or software companies or whatever can definitely bring value, you know, that that you you know you might think you, you know, have a a good sense of how to do something today, but you know, in unless you kind of open your mind and be open to learning, you you might realize that there's a whole different world that you knew nothing about that's
speaker-0: Absolutely.
speaker-1: relevant. Probably one of the most tangible examples of this. is my buddy Jamie Marzilli, Marzilli Machine Works up up near near Providence, Rhode Island. He he ran his shop for ten years, started he was a master machinist, you know, programmer at at companies. D his wife challenged him to start a start a shop. He did When he went through training with us, he just had epiphany after epiphany that he realized that he thought he was really good at running a shop. And he realized he had n almost no idea about how to actually do it well. And he he said that going through that was like taking a college level course on how to run a machine shop properly.
speaker-0: Bingo.
speaker-1: And so, you know, he's flourished since and the business has grown so much faster than it had the previous years. but to that point, and Dave, you know, at Ebra Growth, like they're a good partner of ours. We have many shared clients, and the combination of what we offer and what they offer is just a really powerful combo. so yeah, I you're right. Getting getting help from people that that really know what they're talking about can also be a huge unlock in how to run your business better.
speaker-0: You know, we lost a key programmer at one of our shops. it was a real small one, the first shop I ever bought, Kiki programmer, like the only guy that could program. And I found a guy down about four hours away that did some contract programming for me just to fill in the gap. But my point in saying that is every sticky point of your shop, which sometimes you need a company like Pro Shop or like EBIT or Growth to even show you what the sticky points are. Sometimes our awareness doesn't even bring those to light. I don't even know there's a sticky point, right? It's kind of I don't know what I don't know kind of thing. But every sticky point, there's a solution you could pay somebody that that's what they do best. And they would sell some of their time to you to effectively change that problem or fix that problem. And I think that we don't do that enough, in my opinion. Now, I came from a different world. So consultants are kind of like almost the the propellant northeast. Like you you pay them just to get to the next level. Now I will say there are a lot of poor consultants that don't do good work and don't share good info. So don't don't just go throwing your money at anybody that's on LinkedIn. Yes. Yes. Make
speaker-1: Yeah.
speaker-0: sure they've got some good referrals. But I say that to say, whether it's Pro Shop or even a growth or companies like that, it's you there, there's so much training there that isn't just, hey, here's how to, here's how to implement an ERP. It's how to think about business. Kirk and I say this all the time. We were talking the other day, like we were talking about an AS 9100 audit and and get you know that certification in the way they tell you and and and partnering it with a with with pro shop and we're saying you know this is this is a you know you you need to do certain things to keep your audit but we're like this is really just the way to run a business anyway like even if you had to it's it's not like we got to do this to get our audit or to get our ERP it's like this is just the way to run a business anyway, whether you ever did went through it. You know what I mean?
speaker-1: Yeah, I mean the stats do say that companies that are ISO or AS certified are generally more profitable than those that aren't. And there might be because they're serving mark you know, markets that that
speaker-0: Yep. Maybe higher margin markets.
speaker-1: More more more margin, yeah. But yeah, I think there's a lot of just causality of you're putting better business processes in place, and that's just generally a good idea to the point of this whole episode. and it makes it makes the systems help stop fires before they become fires. They just do. firefighting
speaker-0: Yeah. That's so good.
speaker-1: is just what kills profitability in shops, you're right. You You know, I often talk about, you know, this being the hardest business in the world. And there's a thousand ways a job can go wrong. And if you quoted something with a ten or twenty percent margin, it doesn't take much for that margin to be negative because you missed a little detail or you didn't have a system in place that caught caught that thing or or made sure you had that special tool before you needed it and the machine is sitting idle for a day and a half while you overnight something in, like, There's just so many ways that this business can get along. Unique
speaker-0: Yeah.
speaker-1: it's unique compared to all other types of blue collar businesses. Right? When you have a plumbing business or a contractor, they are first of all, they're not nearly as capital intensive as what we have in machine.
speaker-0: Not even close. Not even close.
speaker-1: And they're competing largely in a regional area. You know, our shops are not only more technically challenging, you're hitting tenths versus
speaker-0: Yeah, way more technical.
speaker-1: but you need, you know, hundreds of thousands or possibly million dollars worth of equipment and you're competing with people at least all around the country, if not globally. So you just gotta have everything dialed in to make that margin and build that value that ultimately will turn into something that endures past you.
speaker-0: I love it. This conversation has been so powerful. And I really, really hope if you are listening today, I really hope you understand the value of treating your business just like you treat your part with precision. And I love what even the title of your book. It you know, w when we were creating our core values at my first company, one of our core values is precision in everything. And one of the reasons we made that core value is because being in precise in everything. Meaning we show up on time. We're not eight minutes late to a Zoom meeting. We're not because that's not precise. That's not what we that's not what we said. And I'm not things happen. I'm not saying that enough. But I'm saying like precision in everything is one of our core value. Even precise in communication. We don't just throw words out there. We make sure that we we communicate in a precise way. And and you know, our Slack channel is not for blowing up because you're ticked off the net leader. That's not a precise, that's not a precise way to communicate. So my point in saying all that is The point of your book is is is so valuable. And so let's as we we could talk about this for days. But as we wrap up, Paul, first of all, let's quickly, I want everybody to make sure you get a copy of this book, Precision Manufacturing, Precision Business. Where can we find it? Where can we get it? How do we get a copy this?
speaker-1: Yeah, Amazon is the easiest place. it's ebook, paper paperback and hardback. and I am in the process of starting to record an audio book version as well.
speaker-0: For you audible lovers, it's coming. I love it.
speaker-1: There's lot to learn and I you know, people have asked please do it yourself, don't hire someone to do it and so I I kinda wanna respect that and do it myself. But yeah, I'm learning about all sorts of things that I never never understood before. So Welling
speaker-0: And because of your podcast, people know your voice and hearing your voice on the book will be a I think will be a value add. I think that's a good good call. have your have your voice do that. So go to Amazon. We will also put the link to that book in the show notes. So please just go down in the show notes, click that link, head on over, snag a copy of that book. Please just do yourself a favor. Make I mean read a chapter a week, get through that book in a few months so that you understand. a little bit of what you're up against in creating a precision business. Paul, again, thank you for yet another value add to the industry. I'm I'm really grateful for what you do for the entire industry as a whole, but also as a friend, I appreciate you, brother. Thank you for hopping on with us today and ja just jamming on some powerful stuff.
speaker-1: You know, Mike, I love talking to you. W we know when you when I had you on my show the first time, we had so much fun, we immediately recorded a second one. I love it. Just can't stop this. So just absolute pleasure to j to talk with you and thank you for what you're doing. You know, the the the mission of helping shops not close their doors is so important right now. that yeah, we can't bring too much attention to this this problem.
speaker-0: I could not agree, especially with the silver tsunami you mentioned. We have a lot of fifty-five to sixty-two-year-old owners approaching retirement and don't have to just shut their doors if they would pick up this book and even put a couple of systems in place. They could they could sell it and keep the legacy alive, right? and so appreciate you, brother. Again, make sure you snag a copy, Precision Manufacturing, Precision Business, link in the show notes. And if you don't know, we'll also put Paul's podcast in the show notes. He runs a couple amazing podcasts. One of my favorite is a Machine Shop Mastery, the first podcast I ever found and listened to in this space. We'll also drop that in the show notes as well, a link to his podcast to make sure y'all are are if you're in manufacturing specifically, precision manufacturing, or any machine shop business, you need to be following that podcast as well. So, Paul, again, thank you, brother, and we will definitely jive on a new.
speaker-1: Sounds good. See you around.
speaker-0: Thank you for listening to Manufacturing MA with Mike Fritz. If you found value in today's conversation, be sure to subscribe, leave a review, and share this episode with a fellow manufacturing owner, operator, investor, or acquisition entrepreneur. For more insights on building stronger, more valuable manufacturing companies, follow Manufacturing MA on LinkedIn. Until next time, keep building companies worth owning, worth growing, and worth passing on.
speaker-1: Mm-hmm.
