Run Your Shop Like You’re Selling It: How One Owner United Welding and Machining Under One Quality System | Ep. 69

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In this episode, I sit down with Mike Payne, owner of Hill Manufacturing and a familiar voice across the MakingChips Network, where he co-hosts MakingChips and hosts By the Numbers. Mike spent his early career in private equity and investment banking before buying Hill, and he’s bought five more shops since. What I didn’t realize until we talked is that Hill was a welding and fabrication business first, with machining built around it.

That’s where the story gets good. During due diligence, the previous owner told Mike that if she were sticking around, she’d get rid of the machine shop and go all welding and fabrication. He did the opposite. He saw spindle hours sitting idle, kept the machine shop, and set out to turn two companies, two cultures, and two sets of expectations into one.

We get into what that actually took. Two charts of accounts. One ISO-certified side and one that wasn’t. Welders who told him, “We don’t scrap things.” Fast forward nine years and the whole operation just earned AS9100 under a single quality management system. Along the way, an hourly welder named Corey became the operations manager across every shop in the portfolio.

Mike also gives us a simple lens for every decision: run your business like you’re ready to sell it tomorrow. Whatever you do should move one of two numbers, your EBITDA or the multiple it gets valued at. If you run a fab shop that got pulled into machining, or you’re trying to get welders and machinists working toward the same standard, you’ll walk away with a clear picture of how to build the systems, use your data, and grow a business your people want to grow with.

What’s Covered in this Episode

• (0:00) The previous owner’s advice: get rid of the machine shop and go all welding and fabrication
• (1:28) From private equity and investment banking to shop owner and By the Numbers host
• (2:56) Why you should run your business like you’re prepared to sell it at any time
• (3:24) The two numbers that matter: EBITDA and the multiple
• (6:03) What’s your biggest headache? How CLA helps manufacturers grow their top and bottom line
• (7:14) Hill’s history and a business that ran 60 to 65% welding and fabrication
• (8:33) High precision welding: machined parts welded, then machined back into tolerance
• (11:14) Turning down work they can’t get out of the building
• (12:40) Gabe from Factur on maxing out existing customers, plants, and referrals first
• (15:31) LinkedIn, email, phone, paid ads, and trade shows in the go-to-market hierarchy
• (18:08) Maxed out your network? How Factur can help you build your sales pipeline
• (21:04) Why Mike kept the machine shop and went after unused spindle hours
• (23:02) Two companies, two charts of accounts, and only one side ISO certified
• (24:46) “The weld shop could never be ISO certified” and the road to AS9100
• (26:23) Corey’s path from hourly welder to operations manager across the portfolio
• (28:29) Rolling out ProShop ERP and the welders who said “we don’t scrap things”
• (31:15) Take your shop to the next level with DN Solutions
• (32:44) Getting routing knowledge out of welders’ heads and into the data
• (34:47) Why quality is still harder on the weld side and how a laser scanning arm helps
• (36:33) The curtain between the shops and why machinists and welders are different people
• (39:57) Burned by recruiters? Find your next leader with Hire MFG Leaders
• (42:05) Why your experience is cumulative, not a limit
• (43:19) Mike’s why for growth: creating opportunities for his people

Resources Mentioned

• CLA
• Factur
• DN Solutions
• Hire MFG Leaders

Connect with Mike Payne

• Buy The Numbers Podcast
• LinkedIn