7. So You Want to Buy a Machine Shop With No Experience?

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Everybody wants to own a machine shop until they find out what it actually costs them. This time I sat down with Tom Brown, a guy who just walked out of Harvard with an MBA and seven years in the Marine Corps behind him, and he wants to buy a shop. Good for him. But I gave him the version nobody else will.

You might work harder than anyone you’ve ever met for less money than you’ve ever made in your life. That’s not me being negative. That’s the truth about this business, and it’s a truth just about every owner I know has lived through.

We got into the whole thing. SBA 7A loans, seller financing, and why so many shops sit at break even on paper because they’ve quietly turned into lifestyle businesses. How a bank reads the books. What to check before you sign: how old the equipment is, how stable the customer list is, and how old the people on the floor are.

Because here’s the part that matters most. Owning a shop is like running a baseball team where every day is the playoffs. There’s no triple-A farm club feeding you talent. Interview a hundred people and maybe one is a real class 3 machinist. The silver tsunami is real, a whole generation got pushed away from the trades, and if you lose your people you don’t just lose the shop, you go bankrupt.

So we talked about the real path in. Get a job at a shop first. Find a mentor. Maybe partner with somebody who already knows how to cut metal. Write the business plan, because you haven’t started anything until you have. And understand cashflow like you know yourself, because payroll doesn’t care about your bad month. If you’ve ever thought about owning a shop, start here.

What’s Covered in this Episode

• (0:00) You might work harder than anyone you’ve ever met for less money than you’ve ever made
• (0:46) Meet Tom Brown: Seven years in the Marine Corps, then Harvard for an MBA
• (5:56) Buying a shop from a retiring owner vs a safe corporate career
• (9:07) Why buy a shop instead of starting one from scratch
• (11:40) Check out the IMTS Job Shops Workshop and Networking Reception
• (12:32) Owning a shop is like running a baseball team where every day is the playoffs
• (14:00) Why Massachusetts wins: MassMEP, MIT, WPI, and strong grant support
• (15:41) Why Tom chose manufacturing and land on machining
• (17:05) What size shop, SBA 7A loans, and seller financing
• (18:35) How banks read the books and the due diligence process
• (20:13) Workforce development issues (and what I do to combat that)
• (23:16) The machine mix at the show Tom is looking at
• (25:17) Investing in ProShop is an investment in your business
• (26:52) Get a job at a shop first (and the 70 year old owner with no successor)
• (30:11) Days to pay, net terms, and how big customers finance on your back
• (33:15) Payroll could be 35,000 dollars a week—and a bad month can bury you fast
• (35:41) You haven’t started buying a shop until you’ve written the business plan
• (37:05) Cashflow as the one universal truth, and why the show is called Raw Material

Resources Mentioned

• IMTS Job Shops Workshop and Networking Reception
• ProShop ERP
• SBA 7(a) Loan Program
• MassMEP, the Massachusetts Manufacturing Extension Partnership

Connect with Tom Brown

• Connect with Tom Brown on LinkedIn