Buying and Saving Two Machine Shops | Ep. 141

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What happens to a family-owned machine shop when there’s no next generation ready to take over? Too often, the doors close, the equipment goes to auction, and decades of knowledge scatter. Mark Hagedorn saw a chance to write a different ending—for two shops at once.

In this episode, I sit down with Mark just 40 days after he acquired Altenburg Machine & Fabrication and Erlbacher Gear & Machine Works in southeast Missouri. A mechanical engineer with a background in manufacturing leadership, Mark had never owned a machine shop. With three young children at home, he and his wife decided to trade a comfortable corporate career for the opportunity to build something of their own.

We get into how one acquisition became two, the nine-month process of getting the deals closed, and why the shops’ different capabilities made the combination worth pursuing. Mark shares the realities of financing, customer concentration, and taking over businesses where the previous owners are still essential to daily operations. He’s also candid about what has consumed his first weeks—and why the operations work he loves has had to wait.

What I appreciate most is how Mark talks about the people. He wants to preserve what made these businesses valuable while creating opportunities for employees to grow. We discuss earning the trust of longtime machinists, capturing their knowledge, and building a future that honors the shops’ past without getting stuck in it.

What’s Covered in this Episode

• (0:00) Mark on why he became an engineer: listening to the people hands-on with the work
• (1:30) Why Mark’s story matters: two second-generation shops that didn’t need to close
• (4:16) Mark’s path from corn wet mill engineering to leadership and back to Missouri
• (7:12) Hennig Workflow: pallet automation for more spindle uptime
• (10:26) Shop tours, secrecy, and the emotional weight of a sale for owners and employees
• (16:10) Adding a second shop mid-process: gear work plus CNC and fabrication
• (19:53) Shop profiles: owner involvement, three and five employees, and 12-month transitions
• (22:48) Nine months start to finish, and the SBA environmental testing that added time
• (24:38) Funding: savings for the down payment, one SBA loan, and the local bank relationship
• (27:23) Navu: AI chat for your website, trained on your own content
• (28:35) The first 40 days: asset sales, one new company, and the administrative heavy lift
• (30:01) Meeting customers after closing and managing customer concentration
• (34:15) The shop where about half the business is a circular sock knitting machine
• (36:11) Meeting the employees: introductions, reading the room, and earning trust
• (38:58) Factur: how to diversify beyond one customer or industry
• (45:50) Key person risk and getting tribal knowledge documented
• (47:50) No ERP yet: spreadsheets, QuickBooks, and why Mark wants one
• (48:37) Keeping the two shops separate, and buying the buildings
• (50:02) What does the future hold for Mark and his family?
• (53:16) Getting the right people in the right seats & the hiring dilemma
• (58:43) Reshoring tailwinds, the SBA business plan, and what year one looks like
• (1:03:17) Why the machining community helps each other, and where to find Mark

Resources Mentioned

• Hennig Workflow
• Navu
• Factur
• Precision Manufacturing, Precision Business by Paul Van Metre

Connect with Mark Hagedorn

• Connect on LinkedIn
• Erlbacher Gear & Machine Works