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Do you ever ask yourself why the majority of businesses out there are struggling to survive while an elite handful are crushing it? On today’s podcast we are discussing that question. Our guest is Steve Preda, founder of Steve Preda Business Growth. He is also an author of three books and the host of the Management Blueprint Podcast. Steve coaches business owners to help them reach their ambitions, which often means scaling and maximizing their companies’ profitability or making business ownership a more pleasurable, fulfilling experience. Steve’s life mission is to eradicate what he calls “Business Covid.” He says 180,000 businesses in the U.S. disappear each year because their owners don’t have the knowledge and tools that are essential to be successful. Steve himself is an entrepreneur. He founded investment banking firms in his native country of Hungry and later in the United States. If you you’re looking for insight to help your business reach its potential I suggest you have a listen. Question: What do you think you need to improve on in your business?  Listen on your favorite podcast app using pod.link, or:                                                                                                  View the podcast our YouTube Channel. Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog ************* Link to Graff-Pinkert’s Acquisitions and Sales promotion! ************* Interview Highlights Noah Graff: Steve, give me an overview of your business. Steve Preda: My business is called Steve Preda Business Growth. We grow businesses by systemizing, simplifying, and conceptualizing methods to increase profitability and create engaged workforces. There are 1.7 million small and medium businesses in the US alone. Many suffer from what I call Business COVID – they lack the skills to scale up. Our mission is to eradicate “Business COVID” and help owners achieve their ideal life by building great companies. About 180,000 businesses disappear each year because founders are technicians, not formally trained in business. As Michael Gerber’s The E-Myth explains, technicians start businesses but don’t know how to build them. We simplify concepts and tools to grow businesses more methodically. Noah: Can people learn to think like entrepreneurs? Steve: Yes, they need things simplified and tailored so they can stay focused on their expertise. We bring them proven systems and make it easy to implement. Noah: Tell us your story. Steve: I was born in Budapest to professional parents. My idol was my entrepreneur great-grandfather who built a successful bakery business between the World Wars. I thought I’d be an entrepreneur after college. But I got scholarships and corporate jobs that delayed my entrepreneurial journey. At 35, after getting “pushed out” during bank downsizing, I finally started my own investment banking firm in Budapest. I acquired and prepared small-medium companies for sale, like I did for larger public corporations at the bank. Noah: Was it difficult to come to the US? Steve: No, I opened a US affiliate of my firm easily on a business visa. But America’s competitive landscape was totally different than Europe’s. I ultimately pivoted to join Vistage, a coaching organization, to learn sales, marketing and recruitment in this new environment. Noah: Explain Vistage and why you saw it as a gateway to coaching. Steve: Vistage facilitates peer advisory groups for high-level executives. I saw it as running a mastermind group. The concept is: none of us is as smart as all of us. A group can access collective knowledge through conversation, brainstorming and networking. I had run a mastermind group in Budapest and implemented coaching concepts from Michael Gerber’s book The E-Myth. So Vistage felt like a logical step, though my revenues were much smaller than peers. I wanted to “fly with eagles” and absorb their entrepreneurial experience. Noah: How did you transition to individual coaching? Steve: After two years of facilitating, I needed a scalable coaching model to afford four kids’ college (tuition). I devised a plan to speak at Vistage events to attract clients. I began facilitating leadership team sessions focused on business viability. I implemented Traction’s operating system and wrote some books. When Vistage franchised, I started an independent firm teaching the five Pinnacle principles: Purpose, People, Playbooks, Performance, Profit. Noah: Walk through the Pinnacle model. Steve: You align people to a powerful purpose through playbooks that create consistency. You coach employees and clarify roles. With an exciting vision, strategy and aligned team, performance improves. Profit is the byproduct. We also set goals, metrics and processes to weed out unproductive activities. I help clients build a business machine and then make it unassailable through strategic differentiation. Noah: In your coaching sessions, what is one of the main obstacles? Steve: The owner. They want to control everything even as it bottlenecks growth. I push clients to delegate and get uncomfortable. With the right plan and team, the founder can be replaced operationally. My mission is helping committed entrepreneurs build an organization that scales. Noah: What percentage of your clients succeed versus stay stagnant? Steve: My client selection has improved, so now over 90% of clients achieve change and growth. The key is picking people truly willing to get uncomfortable and listen to new approaches.  Their business also needs to solve a market need and have leadership team support. Noah: To wrap up – what is your message to entrepreneurs? Steve: View your company as a vehicle for growth, not a static entity. With the right systems and team, you can build an organization that empowers you to achieve your ideal life. But you must take risks and step outside your comfort zone. There’s no greater adventure! Note: This transcript excerpt is a condensed depiction of the interview, created with the assistance of AI. Various sentences and paragraphs have been combined or paraphrased to improve readability. 

One of my favorite machinery dealers we work with is from Brazil. He specializes in sending machine tools to South America.  A used machinery deal is usually a challenge to close—even if a customer says they need it. Even if it’s an excellent machine that’s rare on the used market, at a good price, it is hard to close a used machinery deal. But selling a machine to Brazil from the United States adds extra challenges. The customers usually can’t inspect the machine in person, and the Brazilian government charges more than 30% import tax on used machinery brought into the country. Listen on your favorite podcast app using pod.link.        View the podcast at the bottom of this post or on our YouTube Channel Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog ************* Link to Graff-Pinkert’s Acquisitions and Sales promotion! ************* But my friend from Brazil is the most optimistic partner I’ve ever worked with.  His optimism makes working with him fun, yet it’s frustrating sometimes. Once I told him that his constant excitement for deals that were going to happen, was starting to make me skeptical when he would tell me about his next great prospective buyer. He smiled and told me that to succeed in the machinery business, which is often fueled by finding equipment or customers seemingly by chance, you have to be optimistic. If you seldom believe deals will succeed then it’s not a good business to be in. If you don’t believe that someone in another hemisphere will pay good money for a dirty, 20-year-old Walter CNC grinder that somehow you stumbled upon at an auction in Rockford, Illinois, it will be hard to make it in the used machinery business. That was a good deal we did together. I discovered the podcast coaching program I recently joined from a paid ad while scrolling through Instagram late on a Saturday night. When the program, Grow the Show, was pitching to me, they told me my show’s listenership would likely grow 10- 20% in the first month. They said within a year it could be bringing in $100,000 in revenue.  I was seduced by these optimistic claims because they gave me hope, even though I knew deep down I should keep my expectations tempered. After all, they didn’t know me nor my podcast audience. They also didn’t know how much time I would have to put into their program. But I allowed myself to buy into their optimism and made the significant investment to try it.  I’m happy to say in the last six months the podcast has grown a significant amount in listenership. Not yet to the extent that they sold me, but I’m pretty sure it would not have grown much at all if I didn’t take a chance on the program. Seeing that Instagram ad turned out to be serendipity. But only because I was optimistic it would work. I met my wife, Stephanie, on an internet dating site. That became serendipity because I was optimistic enough to believe it was worth the time to meet her for a drink. Maybe your machine shop is taking on an exciting new type of work for a customer you stumbled upon at a trade show. Maybe you’re thinking about hiring someone you met randomly working at Home Depot because they seemed sharp. To make those chance discoveries mean something, you must be optimistic that they will lead to something successful. This is Seeking Serendipity. Question: What are you the most optimistic about in your business?

I often ponder—why do some people own and build companies, while most people are destined to spend their careers as employees. In Part II of my interview with Mike Payne, owner of Hill Manufacturing & Fabrication, we explore this question. Mike comes from a family of six generations of teachers, not business managers or entrepreneurs, and he says he was a “mess” in high school without direction. There’s no question that he’s smart and ambitious, but there are lots of people out there with those qualities, and only a small handful of them acquire and grow manufacturing companies. I enjoyed pushing Mike to analyze how and why he does what he does, and I think he enjoyed being pushed. Spoiler alert, it goes a lot deeper than just making a bunch of money and being your own boss. *********** Listen on your favorite podcast app using pod.link.        View the podcast at the bottom of this post or on our YouTube Channel Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog ************* Link to Graff-Pinkert’s Acquisitions and Sales promotion! ************* Interview Highlights Do the Richest People Work Less? Noah Graff: Many people in the world work incredibly hard, but the richest people aren’t necessarily the ones working the hardest. What is it about entrepreneurs and successful company owners who can replace themselves that makes them different? Mike Payne: I’ll start with a slight disagreement. You said the richest people don’t work the hardest. I don’t totally disagree, but let me use one example that challenges that—Elon Musk. He’s the richest person in the world, and I’d venture to say he works harder than anybody. Noah: A lot of the richest people don’t work as hard as somebody in India digging a ditch, or somebody working three jobs. It depends what you mean by work. Mike: As a society, we think this way. My own team sees me drive a nice truck and go on trips, and they think, “I’m working harder than he is.” In many ways, they are—physically for sure. This is true of most successful people. And I want to distinguish between business owners and successful business owners, because there are many business owners in the world. If I put myself in the category of someone who works hard and is “successful,” I still get up and go to work every day. But my favorite line, which I read a couple years ago, is perfect here: “The best thing about owning your own company is you get to choose which 80 hours a week you work.” I’m not stuck on someone else’s schedule. I get to do it whenever I want, but I have to do it. Why Mike is a Company Owner Noah: Let’s go back to the hardest question—why are there certain people like you who just naturally take charge? Mike: I have a sense of purpose that’s bigger than me. When we talked about creating opportunities for my people, that’s my purpose. Yes, I want to buy companies, make money, do good deals, but a lot of that purpose is to create opportunities for other people. Your purpose could be a lot of things, but with a purpose, you automatically do more. You’ve got to care about something. I can see it with everybody we hire in the shop. If they have a purpose in their life, they’re a better employee than the ones who see it just as a means to get a paycheck on Friday. Noah: Do you think your parents did something to make you have this mentality? Mike: No, I can’t point to that. My dad’s side of the family is six generations of educators. Mom’s side was farmers, blue-collar labor workers. I didn’t have that “I’m gonna follow in the footsteps” thing at all. But in all honesty, I don’t know that I can even really take credit for it. All I ever did was just work. I work hard. I’m not the smartest person in the world, I’m definitely not the best looking, but I do work hard and I always worked hard. When I got myself in binds, financially or otherwise, the only thing I ever knew to do was work harder.   How his Wife Changed Mike’s Life Noah: Can you recall a big serendipitous moment in your life? Mike: My wife and I went to the same high school. I was two years older. We both went to the University of Tulsa. We knew each other, had mutual friend circles, but weren’t close. I was a mess in high school. I didn’t have a lot of direction in life. When I think about me then versus me now, I’m like, how does that journey even add up? How does that guy become this guy? I was finishing my sophomore year of college, she’s coming in as a freshman. I see her at the bar and say, “Hey, I know you, we went to high school together.” It takes me like two months to convince her to go on a date with me because she’s so well-grounded that all she knew was the me from high school. She’s like, “I’m not dating that guy. He’s a mess.” From that point forward, I had to prove myself. I had to convince this woman that I had changed and that I had purpose in life. Quite honestly, I would still tell you today that I out-kicked my coverage. Question: Why do you own your company, or why would you want to own a company?

On today’s podcast, I’m talking with Mike Payne, owner of Hill Manufacturing and Fabrication in Broken Arrow, Oklahoma, to peek inside the mind of a prolific acquirer of manufacturing companies. Before purchasing Hill in 2018, Mike spent 20 years in M&A, orchestrating over 100 deals across nearly every industry. Since then, Mike has acquired four machine shops, and he’s constantly scouting for more opportunities to expand. What struck me about Mike isn’t just his deal-making successes – it’s his genuine passion for manufacturing. While some people get caught up in the game of acquisition deals, Mike seems to remain committed to his stated purpose, making quality parts and building lasting companies. *********** Listen on your favorite podcast app using pod.link.        View the podcast at the bottom of this post or on our YouTube Channel Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog ************* Link to Graff-Pinkert’s Acquisitions and Sales promotion! ************* Main Points Working in the M&A Industry Mike Payne’s career began in the mid-1990s when he graduated from the University of Tulsa with a computer science degree. He started a software company specializing in shop floor data collection, working with manufacturers during the era when Walmart was pushing barcode implementation. This early exposure to manufacturing sparked his interest in seeing how things were made, from tires to fishing reels. After successfully growing and selling his software company in 2003, Payne transitioned into private equity, where he spent 15 years buying companies across various industries. What set him apart in the M&A space was his approach: rather than just completing deals and moving on, he would typically take board positions or operational roles in the acquired companies to ensure their success. He completed over 100 deals during this period, attributing some of his success to being an outsider who asked “dumb questions” that often led to valuable insights.   Purchasing Hill Manufacturing and Fabrication In 2018, Payne purchased Hill Manufacturing and Fabrication, a company he’d known for 30 years. The company, established in 1976, had become “tired” under an owner looking to sell, with minimal reinvestment in equipment and growth. Payne saw this as an opportunity to revitalize a solid business. Since his acquisition, the company has doubled in size through both organic growth and the acquisition of four additional shops. What distinguishes Payne’s approach to business is his complex motivation. While he openly acknowledges his desire to make money (“I’m a capitalist”), he emphasizes that his greater satisfaction comes from creating opportunities for others. At 51, he could coast or even retire, but he continues growing his business because he enjoys developing his team and seeing them succeed. He shares examples like watching a 27-year-old manager building his first home and starting a family. Payne also maintains strong relationships with the previous owners of companies he’s acquired. He shared a story about receiving a photo from a couple whose shop he bought in 2022. While he was at IMTS viewing the latest manufacturing technology, they sent him a picture from their retirement travels of an old lathe in an Arizona campground. This exemplified his goal of not just making profitable deals, but helping owners successfully transition into their next life phase. Philosophy of Business Growth The conversation also touched on the philosophy of business growth. While Payne acknowledges that maintaining a steady, non-growing business can be viable, he believes companies need to at least stay current with technology and market demands to avoid slow decline. He shared an example of a recent acquisition target that had gradually declined from $2 million to $1.2 million in annual revenue because they weren’t reinvesting or replacing lost customers. Throughout the interview, Payne’s enthusiasm for manufacturing shines through. He describes the satisfaction of seeing raw materials transformed into finished products and particularly enjoys giving shop tours to people unfamiliar with manufacturing, as their fascination helps him see the magic of manufacturing through fresh eyes. He compared this to hiking with his daughter, who helps him notice beautiful details he might otherwise miss in his rush to reach the destination. The discussion reveals Payne as someone who has successfully merged the analytical skills of a private equity investor with a genuine passion for manufacturing and people development, creating a business approach that values both profitability and purpose. Questions: If you were to acquire a manufacturing company, what would you be looking for? What would it take for you to sell your manufacturing company? Check out Mike Payne’s  podcast, Buy the Numbers. The blog was assisted by Claud.ai

Today’s show is the first episode of a multi-part series about how machining companies acquire new work.  Our guest is Federico Veneziano, CFO and COO of American Micro Products Inc., a precision machining company in Batavia, Ohio. Federico says one his key strategies for getting new customers is proving to them his company will minimize the problems that are bound to occur in most manufacturing jobs. Scroll down to read more and listen to the podcast, or listen with Google Podcasts, Apple Podcasts or your favorite app. Main Points Federico talks about how the selling process in the machining business has changed in the last few years. He says there are fewer face-to-face meetings now, but he still prefers the traditional human touch. (3:20) Federico gives an overview of American Micro. The company is located in Batavia, Ohio, just outside of Cincinnati, and it was founded in 1957. It mostly focuses on turning, but also does milling. It makes parts for the automotive, aerospace, and defense sectors, along with a little bit of industrial and medical. American Micro’s workforce fluctuates between 150 and 200 people. It has also had a factory in China since 2005, with around 100 employees. (4:20) Federico came to the United States in 2004, working for the machine tool builder DMG. He did technical support and service, process engineering, and sales, which gained him a lot of knowledge of machining companies and cultures around the world. He worked on American Micro’s Gildemeister GMC35 CNC multi-spindles, which eventually led to him coming to work there. (6:40) Federico hates to say it, but aerospace is one of American Micro’s most significant markets, so it has been hit hard by the current troubles of the commercial aerospace industry. The company has had success doing specialized automotive parts such as fuel diesel components and parts for steering pumps. Defense is becoming one of the company’s most important sectors. He says the medical industry has been harder to penetrate because it requires a company to have established contacts already in the business. (8:20) Federico says one of American Micro’s strategies is to stay in markets it already knows well so it can provide good service to customers. The company uses databases and other resources to find potential customers and then contacts them via phone or email. If a job seems like it has potential, the company tries to set up a meeting to do a presentation, where sales representatives talk about the added value American Micro can provide beyond just price. Federico says he tries to identify potential customers’ pains and then come up with solutions to their problems. He says this is the key to getting new jobs. (10:30) Federico reiterates that it’s important to make a value proposition beyond a good price per part. He says the constant emphasis today of customers choosing venders exclusively on the basis of price is diluting the value of manufacturing. He says price pressure causes work to go overseas, which creates new complications that sometimes make parts more expensive than if they were made in the United States. He says it worries him particularly when some sectors move overseas, such as aerospace and defense because a drop in quality could have dangerous ramifications. (13:30) Federico says meeting customers in person is important for American Micro to get to know them and understand the problems they are dealing with.(15:35) Federico says it’s important for salespeople to have a technical understanding of jobs so they can set realistic expectations for customers. He says in the past there may have been enough margin that even if suppliers couldn’t reach their promised results, they could still meet their customers needs, but that usually isn’t possible nowadays. (16:40) Federico says in China getting work is an entirely different process than in the United States. It usually consists of an online bidding process. However, he says that model doesn’t necessarily apply to American Micro because foreign companies in China usually do work for other foreign companies, not Chinese companies. This enables some personal relationships. He says payment processes are totally different in China than in the United States. (19:00) Federico discusses the negotiation process for machining jobs. He says the process depends on whether a product is ongoing and established or if it is a new product. If the product is already being produced by someone else, a buyer will either offer an expected target price or they will ask the supplier to propose a price first to see if they can get a better deal. Federico says he thinks it’s best if the customer starts out by giving their target price because if the target price is dramatically different from what a supplier can offer it will be a waste of time to try to make a deal. Also, he says if everyone is pushing as hard as they can to get the best price possible it will hurt the market as a whole. Every deal will become based on price, rather than important value added services and longterm relationships. He says it can be a problem when traditional salespeople do the negotiating because their commission might be their only concern. (20:20) Federico says American Micro uses manufacturer’s reps, but in a controlled framework that has been quite successful for the company. Its manufacturer’s rep has technical knowledge and has an intimate relationship with the company. American Micro has an exclusive agreement with its manufacturer’s rep, so for a specific service or part he can only represent American Micro, rather than working for several companies. He says the exclusive relationship is necessary, otherwise the rep will become a quoting house where he has the power to choose between several companies who gets a job. He says traditionally a manufacturer’s rep receives 3-5% commission for a supplier or customer. Even after the manufacturer’s rep makes an introduction, American Micro still has to make its pitch to a customer to get the work. He says to him it’s more difficult to get new work than get a new supplier (23:30) Noah asks if American Micro prefers to buy equipment before the company has work for it or wait to acquire the work first and fill the need with a machine. Federico says it’s great if you can get jobs for equipment a company already has. He says if American Micro buys a machine for a specific job, it needs firm long-term agreements in place to insure the work for the machine. However, he admits it can still be risky, so it’s important to have knowledgeable people making deals, increasing the likelihood jobs will be executed. He says 15-20 years ago, long-term agreements were less common than today. (29:30) Federico projects 2021 to a be a decent year for American Micro, but it’s important to the company that aerospace makes a comeback. Based on the company’s market research he thinks in August the sector will ramp up. For other sectors he is bullish. He was surprised that automotive was not hurt significantly by the pandemic in 2020. (31:30) Federico says he thinks small and medium manufacturers should collaborate more, rather than always fighting for work. He says constantly fighting for work causes a lot of jobs to be decided only by price, which hurts the quality of parts in the overall market. He says companies should instead divide up work based on each company’s strengths, rather than every company trying to hoard all the jobs. (32:40) Question: Do you prefer to buy a machine before you have any work for it, or buy equipment only when you have a job for it?

Have you ever wondered how a used machinery dealer like myself approaches buying secondhand equipment? About a month ago, I did my first LinkedIn live talk and featured that subject. I focused the talk on my techniques for communicating with sellers and equipment experts. I believe the majority of people these days lean too much on online networking, emailing, texting, and instant quotes. I discussed the art of actually talking to people to better understand the machines they’re looking at, to discover serendipity, and negotiate the best price. This episode is a little different style than our typical interview or my solo podcasts that are scripted, but if you like me or at least like my stuff, I think you’ll dig it. FYI, I reference a few slides of machines in my stories, so if you’re listening to this you’ll just have to use your imagination. I hope you find a few little nuggets of wisdom in this. It might help you avoid making a some of the mistakes I’ve made in the past when specking on old iron. *********** Listen on your favorite podcast app using pod.link.        View the podcast at the bottom of this post or on our YouTube Channel Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog ************* Link to Graff-Pinkert’s Acquisitions and Sales promotion! ************* Interview Highlights Main Points After 14 years of buying and selling machinery at Graff-Pinkert, our family business specializing in precision turning equipment, I’ve learned that successful machinery purchases hinge on one often overlooked aspect: communication. The following are some of the most important principles I’ve learned over my career for making smart purchases in the used machinery market. Build Your Network of Experts The first crucial step in buying used machinery is developing a network of industry experts. Even if you’re knowledgeable about the equipment you’re seeking, having connections with specialists can provide invaluable insights. I have specific people I go to for advice before I buy various machines. I have a Tornos Swiss guy, a couple of INDEX guys, a robot guy and a some other machinery dealer friends who are helpful with all types of equipment. I’ve also found LinkedIn and industry forums to be excellent starting points for building these type of relationships. It was a little surprising to me at first, but people genuinely enjoy sharing their expertise when approached respectfully. It actually creates friendships and bonds beyond just work. These connections have saved me from making costly mistakes and helped me understand the true value of machines I’m considering. Uncovering the Machine’s Story and Serendipity Something I’ve learned the over the years is that every used machine has a story. While it’s tempting to rely on email communications and online listings, picking up the phone and speaking directly with sellers is the only way to reveal crucial details about a machine’s history. For example, several years ago, Graff-Pinkert bought some Hurco mills from an auction that had been in a shop which had a fire. The machines looked good in the photos, and the price seemed right. And overall, they were in decent working condition. But, while we were transparent about the machines’ history with customers, not all sellers volunteer such information. But, if you speak to a seller on the phone and ask the right type of questions, you have a better chance of uncovering the background of a machine. Of course, one of the most important ways to understand the condition of a machine is go inspect, but still, talking to the seller is a good first step. Another crucial reason to call a customer rather than just emailing is it enables the potential for serendipity—lucky breaks that lead to different opportunities than you planned for. A while back, we had a potential buyer request a quote for a Tsugami BO205 Swiss machine we had in stock that we were struggling to sell. Rather than email him a quote, I called him and discovered he actually needed a different model, a BO325. I quickly remembered another dealer who had that exact model and we got a quick deal done. That customer might not have found the machine he was looking for had we just sent him a quick quote. Negotiation on the Phone Talking to someone during a negotiation is invaluable to both the buyer and seller. You get to feel each other out. When someone names a price you can get a sense if a buyer or seller is angry or nervous, or seems like they’re lying. New information and creativity for deals often appear when talking rather than emailing or texting. Conversations humanizes each other. They create trust. I finished my talk by recounting what I sometimes say to endusers when we are haggling over just a few dollars to complete a deal. While dealers like me focus on resale value when purchasing machines, I suggest that end-users prioritize long-term value over small price differences. A few thousand dollars in purchase price becomes less significant when considered against years of production value. To sum it up My advice to used equipment shoppers is to not buy a machine just because it looks pretty online and the price seems right. I’ve made that mistake before, and unfortunately there is a good chance I will make it again. The secrets to making great buys are cultivating great relationships, gathering information through direct communication, and mindful negotiation—on the phone or in person if possible.

Sometimes machining companies tell Graff-Pinkert they have long running, lucrative jobs supplying parts to the D.O.D., and it always has seemed a little mysterious to me. What are these parts they are supplying to the government? How does a company get to become a supplier to the D.O.D.? Is supplying parts to the U.S. Government a good idea for a small-sized or medium-sized machining company? I got some answers from today’s guest on the podcast, Mike Topolewski Jr. Mike is Vice President of Sales and Operations at Perigee Manufacturing Company in Detroit, Michigan. Perigee is a three generation, screw machine and CNC shop with a specialty in fasteners. The D.O.D. has been a significant customer of theirs for decades. Listen with the player at the bottom of the page or at your favorite podcast app.                                                                                                  View the podcast our YouTube Channel. Follow us on Social and never miss an update! Facebook: https://lnkd.in/dB_nzFzt Instagram: https://lnkd.in/dcxjzVyw Twitter: https://lnkd.in/dDyT-c9h Noah Graff: What was the catalyst that got your company to start supplying to the Department of Defense? Mike Topolewski: We have been making defense components almost for our full existence—55-plus years. We did indirect (work) prior to being certified as a defense contractor. Becoming a direct defense contractor can be a very daunting path. It’s not straightforward, so to speak. There are multiple steps and multiple departments you have to go through to get certified. The one caveat is we’re a fastener precision turn component manufacturer. The way that we do business can be very different than a service provider to the Department of Defense.  Graff: How do you get certified to be a direct defense contractor? Topolewski:  It’s a multi-step process.  It was complicated. A lot of bureaucracy. I wouldn’t say it was necessarily difficult. It was a long process. There’s quite a bit of paperwork and background checking to confirm we are viable corporation? The first steps are getting registered with federal government, getting issued a cage code, so to speak. I believe the acronym stands for Corporate and Government Entity. Our code is 1X4X7. When you bid on contracts and you are awarded contracts, that is public record. It’s available to anybody to see which entity was awarded what. Graff: What is a PTAC (Procurement Technical Assistant Center)? How can they aid people in doing work for the D.O.D.? Topolewski:  These are agencies that I believe are backed by the federal and or state government to assist contractors with existing contracts. These contracts are very long. They’re not one or two pages. The government is so big, and there is tremendous bureaucracy. The PTACs can be a very helpful resource. Graff: What is the bidding process like to get government contracts? Topolewski: The bidding process for our industry is typically done on a bid board. There are several procurement boards that the government uses to disseminate the solicitations. You need to have the credentials and the access to these portals. You go in there and you see what the government is looking for, and you review these solicitations, which can be longer than the contract sometimes. Then you enter your bid via the portal. We’re bidding on contracts that are typically for discrete number of parts with a specific delivery date requirement.  Graff: What is an example of a quantity that your company would bid on? Obviously, you’re screw machine people, so you’re making a lot of parts. Topolewski: We are. But we have eight CNC machines which are running low volumes as well. Back during the war in Afghanistan or war in Iraq, there were times when we were making very small quantities and they were immediately sent out overseas to the troops. Graff: Tell me about your bidding strategies for getting D.O.D. jobs. Topolewski: Once you enter your bid you are notified via email or via the portal if you’re awarded the business. You’re also notified if you aren’t. You can see previous contract history for that particular part. You have a general idea of the market value, maybe not the current value, especially through the pandemic and supply chain issues, but you have an idea if you’re going to be somewhat competitive. There are too many things out there to bid on. You have to be selective. You have to know what your strengths are, what you’re competitive at, and go after that. Graff: What are the greatest challenges to supplying parts to the D.O.D.? Topolewski: Obviously, there are the obvious barriers to entry to doing defense work. Getting registered, going through the various steps. Many companies don’t have the patience or the wherewithal.  Graff: So you’re saying there’s less competition, which is an advantage. Topolewski: Possibly yes. And for those reasons, but also the length of these contracts and the requirements that are forced upon the contractor. That contract has many clauses that may have costs associated with them to our company. One obvious difference is packaging requirements. If you’re bidding on these contracts, they don’t just want them in a box and shipped to the depot. They have to be sometimes individually bagged. And some of these bags are expensive, and they have RFID enabled labels and barcodes. Cybersecurity is another (issue). We are required to have certain cybersecurity measures in place in order to bid on these contracts. Graff: What are your favorite and least favorite parts of supplying the D.O.D.? Topolewski: We make a fair amount of parts that go into various vehicle platforms within the military. We take pride in supporting and protecting the war fighter. These parts are critical to their safety. Another positive is that federal government pays very well, and they pay on time. And if they don’t, you get interest.  Graff: That makes sense. They want to be able to rely on their suppliers. Topolewski: The defense industrial base in this country is critical to the national security of this country, and they take that very seriously.  If these defense contractors go away and especially critical ones then we have a real issue.  It’s important. Question: If the United States went to war, what are your greatest concerns for the country’s manufacturing preparedness?

You may have noticed that I often talk about friction on this podcast. That’s because everyone has to fight friction in business—and there is A LOT of friction in the manufacturing business. Friction from time consuming stuff. Friction from stuff being too hard to figure out. Friction from stuff we’re not qualified to do or just don’t want to do. My guest on today’s podcast, Constantine Ivanov, founded a business called DigiFabster that alleviates friction for manufacturers, providing features like instant quoting, a CRM, and payment platforms that are specifically tailored for different manufacturing types. I loved our conversation. Along with talking about DigiFabster, Constantine had some fascinating insight about entrepreneurship from the perspective of a Russian immigrant. *********** Listen on your favorite podcast app using pod.link.        View the podcast at the bottom of this post or on our YouTube Channel Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog ************* Link to Graff-Pinkert’s Acquisitions and Sales promotion!   Interview Highlights The Shopify for Custom Manufacturing Constantine (Const) Ivanov founded DigiFabster, which he describes as “Shopify for custom manufacturing.” The platform addresses critical friction points in manufacturing by enabling machine shops to provide instant quotes and streamline customer relationships. Traditional quoting processes can take days, and shops often struggle with basic operations like invoicing and customer communication. The manufacturing landscape has evolved significantly due to companies like Xometry and Protolabs raising customer expectations for rapid service. While top-tier shops previously relied on core customers and could be selective with jobs, the democratization of manufacturing has redistributed opportunities to smaller shops willing to take on diverse work. DigiFabster analyzes 3D models for complexity, geometry, and manufacturability, enabling instant quotes. Unlike marketplace models like Xometry, it empowers individual shops to maintain direct customer relationships while modernizing their operations. The platform helps American manufacturers overcome challenges like expensive labor costs and operational inefficiencies. Many shops struggle with business administration, marketing, and differentiation in a market where companies often appear identical to potential customers. DigiFabster addresses these challenges by automating administrative tasks and improving customer experience, allowing shops to focus on producing quality parts. The platform represents a shift toward more efficient, customer-centric manufacturing operations that can compete effectively in today’s market. Immigration and Entrepreneurship Born in the USSR in 1987, Const began in web design and branding before entering manufacturing in 2013-2014 with his first machine shop in Moscow. He moved to the United States in 2016 on an O-1 talent visa, bringing a unique perspective on business and innovation. A central theme from Const’s experience is the relationship between immigrants and uncertainty. He suggests immigrants often have an advantage in entrepreneurship because they’re accustomed to living with uncertainty. While he emphasizes he left Moscow during peaceful times for better opportunities rather than fleeing hardship, this comfort with uncertainty shaped his approach to business challenges. Const offers an interesting perspective on American business culture, noting that many Americans have been in comfortable positions for so long that they’ve lost their edge in dealing with uncertainty. He contrasts this with the immigrant experience, where uncertainty becomes a constant companion in navigating business, family, and immigration challenges. His background in design and software, combined with manufacturing experience, allowed him to see opportunities for innovation that might not have been obvious to industry insiders. He emphasizes that success isn’t just about having good ideas but about being able to “become a solver” of any challenge that arises. Const’s reflections on success and happiness reveal a pragmatic approach common among immigrant entrepreneurs. Rather than focusing on creating something extraordinary on a “planetary scale,” he sees the importance of enjoying the process and finding success across multiple areas of life – family, health, and business. This perspective may be influenced by his immigrant experience, where success is viewed through a more holistic lens. He attributes much of his success to luck combined with persistence, a common theme among immigrant entrepreneurs who recognize both the opportunities America provides and the work required to capitalize on them. Question: What part of your company’s operations would you love to automate? This blog was assisted with Claude.ai  

Today’s interview is an old favorite. It’s a story about a young entrepreneur and his father producing minuscule parts with no other employees than themselves and Dan’s wife. On today’s podcast we continue our season about Swiss machining. Our guest is Dan Rudolph, co-owner and founder of Rudolph LLC. Rudolph LLC produces medical parts as small as .1 millimeter on Citizen lathes. The company has only three staff members, Dan, his wife, and his father, but Dan says he has no plans to hire employees and the company continues to grow. Scroll down to read more and listen to the podcast, or listen with Apple Podcasts or your favorite app. Dan describes Rudolph LLC. The company produces medical device components particularly for eye surgery. It manufactures mainly stainless steel and titanium components on Citizen Swiss lathes. The company has eight machines and plans on adding several next year. It also has various secondary and finishing equipment, as well as Universal Robots. (3:00) Dan says when the company started he and his father gravitated toward smaller parts that required smaller sized equipment. They had no employees, and the company started in a 900-square-foot shop. Now it has a second 900-square-foot room available for machinery, and a second floor for finishing equipment. (3:50) Dan talks about his career path. Growing up, his father was a supervisor for a Swiss department at an eye surgery OEM. In the evenings he ran a small foundry that did brass castings. Dan often tagged along with his father to the foundry as a kid. He attended Penn State for industrial engineering and worked in foundries after college, but decided that career path wasn’t what he was looking for. He and his dad had been talking about starting a medical Swiss shop together for a while because his father had knowledge of the industry and good contacts from his former company. Dan says since he was young he had an affinity for the elements involved in running CNC Swiss machines—a lot of moving parts, math, and computer programming. (5:30) Dan says his dad prefers a supervisory role as well as handling quality and secondary operations, while he loves running production and setting up machines. (9:45) Dan says the smallest part Rudolph LLC runs is .1 millimeter. The company does a lot of work with thin-walled parts (.002” thick). They drill holes as small as .007” in diameter in stainless or titanium. (10:40) Dan says often he sees working on small parts as “imagining a half inch part but in a smaller world.” Though, he says often with very small parts the bar stock can break off in production. He says when he is working on very small parts he breaks up the work. He will turn a few features and then stop the machine to see what’s going on. Sometimes he will program the sub-spindle to grab the part just to make sure he can find it. He says when the parts are in the sub-spindle you sometimes have to use a razor blade and fish them out. He says for a lot of the parts after the sub-spindle picks them off he opens the collet and then an air blower puts them into jars or tubes. Then he evaluates them using a vision system or other measuring system. (11:30) Dan says Rudolph LLC’s shop is located on what used to be a farm. The barn has been replaced by two 900-square-foot garage-type buildings. The company started in one of the garages and then when it grew took over the second garage and connected the two. Then they built second a floor on top. His father’s house is located across the driveway from shop. (14:30) Dan talks about his wife leaving her CPA job to join he and his dad at the company. She has been shadowing Dan’s father so she can eventually take over his role as he gets closer to retirement. (16:00) Noah asks Dan, how he can “replace himself?” What happens if he needs to step away from the business for some reason, or go on vacation? (17:45)  Dan says when he and his dad founded the company they decided they didn’t want to be “people managers.” He jokes that people at other shops warned them against the complications and headaches that come with hiring a lot of employees. He says that he and his dad prefer doing the actual production work. Automating with Universal Robots for secondary operations and Swiss machining that can finish an entire part enable the company to function and thrive without requiring extra manpower. He says in 2021 the company is not taking on new customers and instead trying to improve the work it does currently. (18:45) Dan says one of the main things he wants to improve upon is reducing the rough edges on parts. He wants them cleaner with less burrs and loose material. Increasing his quality consistency will mean spending less time at the microscope troubleshooting. (22:15) Noah asks how Dan how he is able to come up with new ideas and solutions if he is continuously busy producing parts. Dan says being spread thin is a constant obstacle, but even so, he and his father do not want to hire help. He says if they can perfect the work themselves they won’t need to hire anybody. He says his wife has been a huge addition to the company because she knows how he thinks, so she can help solve problems without creating a new problem of people management. She takes on some of the work, which has smoothed out the operations such as shipping and running the Universal Robots. (22:50) Noah asks Dan if he has advice for someone else who wants to start small shop similar to his. Dan says he can’t fathom starting a shop without at least one other person because with two people you can divide the work between your strengths and weaknesses. (25:15) Dan says he sees his company’s mindset as a game to see how much he and his dad can do within their constraints. He says having limited space is advantageous because walking around a big shop takes time. (26:00)  Dan says something interesting he learned last week was his research on various ways he can renovate his home’s deck. He says he has spent time searching on Instagram for photos of work done by contractors. (28:00)  Dan says social networking on Instagram has been beneficial for him. It has given him a peer group of other people in the machining world, which he lacks in his own 3-person company. He says his Rudolph LLC has even gotten some customers from Instagram. (29:30)

Why would anybody buy a CNC multi-spindle for $2 million? Or $3 million for that matter? My guest on today’s podcast, Richard Kingsbury, has the answer. Richard is Managing Director of the Kingsbury Engineering Division, England’s INDEX distributor. In this interview, Richard gives a history lesson of screw machining. We discuss how you sell a $2 million dollar CNC multi-spindle. Most importantly, we talk about how a machining company can make lots of money with these Ferraris of multi-spindles. I know, I should call them Porsches as they’re made in Germany. In any case, INDEXs are so choice! If you have the means, I highly recommend picking one up. *********** Listen on your favorite podcast app using pod.link.        View the podcast at the bottom of this post or on our YouTube Channel Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog ************* Link to Graff-Pinkert’s Acquisitions and Sales promotion! ************* Interview Highlights Kingsbury’s Origins In 1945, a bankrupt Germany was forced to pay reparations to the allies in the form of intellectual property and capital equipment. INDEX’s products and designs were assigned to BSA Tools, a British company, with rights to sell these machines for 10 years (1945-1955) During this period, George Kingsbury (Richard’s grandfather) ran a subcontract shop that used both BSA-built INDEX machines and original INDEX machines. He quickly recognized that the original INDEX products were of superior quality. Sensing an opportunity, he developed a plan to become Index’s distributor when BSA’s rights expired in 1955. To demonstrate his commitment to INDEX, George sent his son (Richard’s father) to work at INDEX in Germany for nine months. When INDEX’s sales director visited the UK, George showcased his facility and then made a bold proposition over lunch: if INDEX would grant him exclusive distributorship rights for the UK and Ireland, he would immediately place a purchase order for 30 cam automatic machines, with 120 days to pay. The sales director couldn’t resist such a proposition, and the deal was struck. George returned to his office to inform his two sons that they had 120 days to sell 30 cam automatics. It was the beginning of Kingsbury’s relationship with INDEX, which continues nearly 70 years later as the second-longest-running Index dealership in the world, after only Japan. Today, Kingsbury has evolved into a diversified enterprise with three divisions: engineering (machine tools), timber, and property, employing 350 people and generating approximately $140 million in annual revenue. Why INDEX CNC Multi-Spindles Make Sense Over Other Machine Tools In our interview Richard made a great analysis of cam-driven multi-spindles like Wickmans verses modern CNC multi-spindles. He explained that while Wickman machines were excellent for high-volume commercial parts, they required highly skilled operators who could fine-tune them with copper hammers—a dying breed in today’s workforce. In contrast, INDEX’s CNC multi-spindles represent a technological leap forward, with each spindle independently driven and controlled. One of INDEX’s key innovations is their patented drum indexing system. Rather than continuously rotating in one direction (which would tangle the wiring), the drum advances five positions forward and then reverses for the sixth position. This solution allows for precise synchronization between operations and eliminates the need for slip rings used by competitors. The benefits of modern CNC multi-spindles are substantial. Richard demonstrated this with a complex stainless steel part that previously took 4.5 minutes to produce on a twin-spindle machine but now takes just 20 seconds on an INDEX multi-spindle. This dramatic improvement in cycle time helps justify the significant investment these machines require. As Richard puts it, “You’re taking a gun to a knife fight” when competing against shops running conventional machines like CNC Swiss or single-spindle lathes. While I agree with the Richard’s view that cam multi-spindles have fewer people qualified to run them nowadays, from my viewpoint as a used machinery dealer selling Acmes, Wickmans, and Davenports all over the world every year, I don’t see cam multi-spindles as completely obsolete in today’s world market. I know companies around the world, including in the U.S. making big money with cam multi-spindles that cost as little as $30,000. Many of those companies have a young workforce with the talent to run the older technology. Sales Approach Selling INDEX Multi-Spindles? When asked about his sales approach, Richard revealed that Kingsbury’s sales team has moved away from traditional feature-and-benefit selling toward a consultative method inspired by Sandler training. Rather than leading with technical specifications or price, they focus on understanding the customer’s problems and business goals. Their most successful sales are to entrepreneurial owner-managed companies that can make quick decisions, rather than corporations requiring extensive approval processes. A particularly interesting insight came from Kingsbury’s discussion of their selective approach to sales opportunities. Rather than pursuing every lead, they carefully qualify prospects through detailed conversations about their needs and motivations. As he explained, “If somebody asks us for our opinion, we’ll give it to them. We’ll try and understand their business. And if we think we can help, we will. And if we don’t, we will say we can’t.” The interview concluded with Richard emphasizing the importance of building genuine business relationships rather than being seen as “sniffy salesmen.” His approach focuses on becoming a trusted advisor who understands and addresses real business challenges rather than simply pushing products. Question: How have you made money using CNC multi-spindles? This blog was aided by claude.ai