Russell Winter's Plan for Retiring Owners' Machine Shops: From Buying Shops to Building a Network
Manufacturing Happy Hour
Russell Winter, founder of US MFG, first described the venture on this show's radar at IMTS as buying machine shops and connecting them with software. About six months later, recording over coffee at Discourse Coffee in Milwaukee, Winter explained how that plan has changed. US MFG now aims to help other entrepreneurs buy shops from retiring owners and to link those shops into a collaborative, eventually employee-owned network. The conversation covers how Winter got into acquisitions, what the first four deals taught, what warning signs to watch for, and why Winter thinks community will scale better than acquiring shops alone.
A Third-Generation Tool and Die Maker
Winter is a third-generation tool and die maker who grew up in a grandfather's tool and die shop that had already been operating for about 30 years by the time Winter was involved. Winter's father had been told he had to run the family business. Winter, by contrast, was raised to go do whatever they wanted, whether school or the military, and at first didn't plan to join the business, partly because of family-business drama.
That changed when the partners wanted to retire. Winter's father bought them out but didn't want to run the shop without Russell, so Russell came back and eventually bought the business from their father. Around that time Winter began talking with other shop owners and noticed how many were approaching retirement. That was the original spark for what became US MFG.
Four Acquisitions, Not Much Master Plan
US MFG started by buying four small manufacturers and linking them through software the company developed, so they could balance labor and workloads among themselves. Asked how those four were chosen, Winter said there wasn't much of a cohesive strategy at first. Winter was homeschooled and grew up in the shop and on a farm, and describes a habit of finding an opportunity and figuring out a solution. In practice, that meant talking with owners and, if they had no succession plan, proposing a deal.
The first company was the father's contract CNC machining business. The second was another machine shop, whose work Winter was comfortable with. Winter says the next two were more strategic. The third was a product line that relied on machine shops to make its parts, which fit what the group could already do. The fourth was a machinery dealership that refurbished and sold machines and provided support and maintenance. The reasoning there was that the group would have underutilized assets, and selling them in an orderly way through a dealership would beat a straight auction.
The host observed that the sequence looks like a sensible growth strategy in hindsight. Winter agreed that it "kind of morphed into that," but said the deals came about organically through people Winter already talked to. The dealership owner, for example, was the person servicing Winter's machines. Winter's early excitement, in their own framing, was a sense of "I can make any deal happen." Since then, Winter has learned that not every deal is a good deal.
Red Flags: Trust but Verify, and Culture First
Winter came into acquisitions without experience in M&A, and the main mindset shift was moving from simply trusting to "trust but verify." Winter acknowledged that sounds basic but said it was new to them. In practice, that means going over the actual financials with a finer-tooth comb and setting clearer expectations from the start. Winter said more clarity in the letter of intent and the asset purchase agreement "set[s] the stage for success."
Winter ranked culture as the biggest red flag, probably number one. Financials matter, but Winter pointed out that you wouldn't be looking at a deal at all if the numbers weren't there. Culture is critical in a rollup where the acquired business moves into an existing location and the teams have to work together. Even when the business stays where it is, Winter asks how willing its people are to innovate and change practices they may have followed for 40 or 50 years.
Asked how quickly that can be read when walking into a shop, Winter said it's something they are still figuring out. Winter's motivation is mission-driven: wanting to help people, provide good-paying jobs, and offer employee equity. That can lead Winter to overlook potential cultural misfits. The open question for Winter is how to judge whether someone is trustworthy and how to understand a company's culture in a short time, without spending four years building a relationship before knowing whether the deal makes sense. Asked whether their judgment had been solid so far, Winter estimated being "probably about 50% of the way there."
Finding Mentors, and a Mentor Who Became an Investor
One thing Winter has learned is to bring in people with more experience. Winter, who is 31, said being able to ask trusted contacts what they think of a person or a deal helps far more than doing it alone.
Winter has found mentors in a few ways. Some came through recommendations from people in the industry who suggested talking to someone who works in a particular area. If Winter feels a connection, Winter simply asks whether they could talk once a month or whenever a question comes up. "You don't get what you don't ask for," Winter said.
Another mentor came from pickup basketball, which Winter and Winter's spouse play twice a week. Winter says sports reveal a different side of people, including how they compete and treat teammates. One player stood out because he pushed himself hard, supported his team, and took responsibility when he failed rather than blaming others. That became a strong mentorship, and the man eventually became an investor. Winter cited a saying: if you want investment, ask for advice, and if you want advice, ask for investment. Winter's reading is that people are always willing to give advice, and if you actually take it, learn, and act on it, they start to see an investment opportunity. The host noted that this was the second guest in under a week to raise the same saying, after a startup founder from Pittsburgh.
Winter also recommended the SCORE mentorship program. Winter believes it is funded through the SBA and described it as a volunteer network connecting business owners with experienced people who want to give back. You choose the category you want advice in. Winter found it very helpful, and the host said they would link it in the show notes.
The Size of the Succession Gap
The host framed retiring shop owners as a once-in-a-generation entrepreneurship opportunity and asked where prospective buyers of any age should look. Winter cited figures from around 2022, when US MFG started. Based on Census Bureau data, Winter said there are about 100,000 small manufacturers with fewer than 20 employees owned by baby boomers, and that over half of them are estimated to lack succession plans. By Winter's arithmetic, that means around 50,000 companies without a succession plan.
Winter's first piece of advice is to "do what you know" and stay in a field close to your background. Running a familiar business is easier. It also earns more respect from sellers, for whom the business is deeply personal, "their baby for 40 years," and part of their identity. Sellers want to know a buyer has industry experience. That puts people who have worked in the trade for 10, 15, or 20 years in a good position. Winter encourages them to knock on doors, use the connections they already have, and consider raising succession with an employer who is 70 or 75, even if they never thought of having that conversation. Helping start those conversations is part of what US MFG is for, according to Winter.
Why the Mission Changed
Winter argues that small business ownership is often romanticized as the ultimate freedom. After buying the family company, Winter still has about a year left of payments to their father and said they made roughly half of what they earned as their father's employee, because now making payroll and staying late fell to Winter. In Winter's view, ownership is "a lot more beautiful" when you work with others and don't have to reinvent the wheel, since systems for growth and metrics already exist.
The value Winter sees is a network of collaborative owners. An individual could buy one to three shops alone or form a small group, but Winter asks listeners to imagine thousands of shops working together. Owners would stay incentivized as majority owners of their businesses while moving through the same process as a hundred others in the same industry, even if their specialties differ. The host described this as providing what most buyers lack: people running similar businesses who know exactly what they're going through.
Winter said the pivot came from trying the first approach. Winter was driving daily between Elgin, Hampshire, and Rockford, Illinois, running three shops in three cities about an hour and a half apart. There was no single "aha" moment. Winter got tired of being limited by their own capabilities and, through doing things and failing, learned where they were strong and weak. People who have spent years in shops may not understand the finance side or customer relationships, and because Winter had struggled in those areas alone, Winter concluded that support there would be a relevant resource. The more Winter has thought about it since, the more convinced Winter is that building a community will have more impact. The host added that entrepreneurs in cities like St. Louis, Kansas City, or Little Rock could build similar regional networks. Winter agreed that such shops are "literally everywhere," often in unmarked brick buildings with a few cars outside and some presses or CNC machines inside.
The Structure: Partnerships Under an Employee-Owned Network
Winter's goal is for US MFG to become an employee-owned holding company, or employee-owned network. Each operating company would be a partnership between an entrepreneur and US MFG, and US MFG itself would be the employee-owned layer, so all employees have a stake in the outcome. Winter said the network's success will ultimately depend on its people, who will share in the payout as owners. Winter would also like to publicize the story of acquiring the first four shops.
On the current status, Winter said they are talking with three or four entrepreneurs and a few businesses looking to sell. The goal for 2025 is five to ten deals added to the network, as proof of concept for the partnership model. The next step is finding the many people who, like Winter, could buy and run two to four shops.
Getting the Word Out
The host argued that awareness is the bigger obstacle and worried that it could become too late for many of these businesses. Winter shared a personal example. A family member had worked as a mold maker at one company for 30 years. When Winter asked about the owner's plans, the relative said the business was going to the owner's son. About a year and a half later, the relative called to say the shop was closing in 30 days because the son wanted to do something else. Winter sees cases like this as a loss of good jobs and of a healthy business.
Winter's approach to spreading the word includes podcasts, LinkedIn, networking, and trade shows. Winter described a woman who would be well suited to owning and running a manufacturing company but, when asked whether she had considered buying one, said she had never thought about it and wouldn't know how. Winter's response is that you don't have to know how if you partner with people who do. The most valuable thing an operator brings is understanding the business and how to grow it, and people need to be empowered to believe they can do it.
The host described a similar challenge with Manufacturing Happy Hour: avoiding an industry echo chamber. The host has been attending general tech and entrepreneurship events in different cities. They contrasted Milwaukee, which the host sees as still searching for its tech and entrepreneurial identity, with Pittsburgh, which is focused on robotics because of its history and Carnegie Mellon talent. In the host's view, regions need specific areas of expertise rather than a generic "tech-centric" label.
Shop Classes Are Coming Back
Winter said US MFG works with local high schools, where trades programs are returning after a period when, at least in Winter's area, they were shut down. Between Chicago and Rockford, Winter said many high schools are adding milling, turning, and 3D printing, and Winter recalls noticing this over roughly the past four or five years while cautioning they may not be the best person to date it. The host, who went to a high school without shop class before studying engineering, said hands-on classes would have helped, and noted hearing similar reports from Michigan's Upper Peninsula.
What Winter likes about the programs they're involved with is how closely instructors work with nearby industry. Boards of local business owners tell schools who they're looking to hire and ask for more turning work, Mastercam, or other region-specific software and skills.
Winter wants to go further and teach financial literacy and the business side alike. US MFG has consolidated its companies into one location, and Winter's ideal is for that site to serve as a training ground where graduates of skilled-trades programs can learn small-company business management in practice. Getting young people into manufacturing is necessary, Winter said, but teaching them finance and an ownership mentality would go a long way.
EOS, Open-Book Management, and Teaching Down the Line
Inside the business, Winter said they are in the middle of implementing EOS and the Great Game of Business, an open-book management approach, and building those principles into the company's SOPs. There is a personal-finance element too: teaching employees to treat their lives somewhat like a business, with money in and money out, on the principle that you can't improve what you don't measure. Winter's method has been to learn the material, then deepen that learning by teaching the general manager, and then have the GM teach the next shop employee brought into the process.
What the Software Does
Asked for a high-level view of the software, Winter traced it to a pain point from growing up in a small machine shop: feast or famine. The shop was either slammed or dead, while the shop across the street might be busy when theirs was slow. In a network of cooperating shops, balancing those cycles becomes valuable, so the software supports sending both work and employees between nearby locations. Winter noted that work can travel farther, while employees usually stay based out of one location. Along with streamlining ISO work and handling tracking and management, the software's main job, as Winter describes it, is balancing workflows and labor among similarly situated companies with similar capabilities.
Having Fun, and a 17-Part Fixture
Asked what the host hadn't covered, Winter brought up having fun. Winter gets much more done when enjoying the work and gets fired up by contributing to something bigger than themselves. The culture Winter wants is one where people laugh, enjoy working together, and take on challenging work. Winter believes many people want exactly that: a challenge they can fully apply themselves to and make a difference.
On what was fun in the shop, Winter described programming and getting fully immersed in a project. Tool and die work involves close tolerances and many details, which Winter compared to a flow state in sports. Negotiating with sellers and working on financials was a different kind of fun, centered on building relationships and mutual trust. In both, Winter tends to focus on one or two things and go deep.
The project Winter remembers most is a complex workholding fixture: 17 parts and nine stations or clamping positions, with many Mitee-Bite clamps and wire EDM work to hold the part in different positions. It took about a month. The satisfaction, Winter said, came from realizing it would let them do ten times as much work because of the time spent designing it. It was a small family shop, so Winter did everything: modeled it, wire-burned it, machined it, assembled it, and put it into use. Winter finds being involved at every stage of a project especially satisfying.
That thread runs through the conversation. Winter has moved from building parts to building a company and now to building a network. Whether the partnership model works will be tested by the five-to-ten-deal goal for 2025. How to judge a seller's culture and trustworthiness quickly remains, by Winter's own account, something still being learned.
All right. I mean, I think we can get started. I think we can get started. Are you ready to get started, Russell? I am. Yeah. I'm excited about this. Let's go. Well, hey, it's coffee right now, but cheers. Cheers. Thanks for meeting me out at Discourse Coffee.
I have just barely enough room to sip coffee with the headset. That's what I was gonna say. I was like, "Oh, that's interesting. I got to use my other hand." Yeah. Yeah. It's a skill.
But no, just to set context of where we are, this is a coffee shop here in Milwaukee that's also next to 889 Radio Milwaukee. So I'm like, what a great place to record a podcast that also doubles as a spot where behind this garage, they do some shows over there and things like that. So I'm like, this is like built for like a podcasting performance, all things considered. So well, thank you for making the drive up from Illinois tonight.
Yeah, I appreciate the opportunity. I'm glad to talk and excited.
And before we jumped into this, I actually went back and looked at my notes from IMTS, the International Manufacturing Technology Show, where you and I were first talking about this, like, I don't know, probably by the time this comes out, like 6 months ago or so. Yeah, it goes by fast. And I made one note about what our podcast was going to be about. And I said, Russell is buying machine shops and bringing them together with software. So tell us a little bit about that. You know, and I know your story's evolved since then, but how are you buying machine shops and bringing them together with software? Where did this start?
Well, so if I go back even before that, like, I'm a third generation tool and die maker. So, I grew up in my grandpa's tool and die shop. By the time I was involved, it had already been around for 30 years. And basically my dad was told, you got to run the family business. And I was raised with go out and do whatever you want, you know, go to school or the military. And originally I wasn't even planning on being involved in it cuz it was family-owned and there was some drama and stuff. And so how things ended up working out was the partners wanted to retire. My dad bought them out and said he didn't want to run it without me. And so I came back on board and eventually bought him out, and that's when I started talking with other owners and just realized, wow, it seems like a lot of these guys are all retiring. So maybe there's an opportunity here.
So that was kind of the original spark of interest for building this network, which we've now named US MFG, and basically we developed our own software that allows us to... We originally started with buying companies. So we bought four small manufacturers and linked them together through the software. So essentially they can balance out their labor and their workloads between companies. And now it's kind of morphed into just building this network where we partner with entrepreneurs, help them buy companies from retiring owners, and then work collaboratively to just grow them. So, provide a lot of back-end support and that sort of thing.
And we're going to talk about your new mission as well as your original mission, because I think it's very interesting that this has evolved since you and I first met. But I still think there's a lot of opportunity that manufacturing leaders should be aware of in general that ties in to both of the things you were working on. So I'm very curious, when you found those four machine shops, how did you decide that those machine shops were the right fit for what you were doing? Was there something they had in common, or were there differences that you were looking for? Or it's like, oh, machine shop one over here is really good at this and machine shop 3 over here is really good at this. If there wasn't like a cohesive strategy, that's okay, too. But I'm just curious what you were looking for, maybe what you learned on the back end.
Yeah, I would say that there was not that much of a cohesive strategy. You know, I was homeschooled, grew up in the shop, grew up on a farm, and it's kind of just been this find an opportunity, figure out how to solve, you know, provide a solution. And so originally it was really just talking with owners, and if they didn't have a succession plan I'd be like, hey, we can work out a deal. And so the first one was from my dad, so we were doing contract manufacturing, CNC machining. The second one was another machine shop. So I was comfortable with the work that they did.
I guess it got a little bit more strategic in the next two, because the next one was a product line that used machine shops to make their parts. Okay. So I was like, "Okay, well, you know, we can do that." And then the fourth one was a machinery dealership that refurbished machines and sold them and also provided support and maintenance. So the thinking behind that was a little more strategic, too. You know, like, oh, well, we're going to have a lot of assets that are underutilized that we could sell off, and if we could do that in an orderly fashion, it'd be better than just having an auction. So, I think it got a little bit more strategic, but at first the excitement of approaching a deal was a lot more like, oh man, you know, I can make any deal happen. And now I've just kind of learned that not every deal is a good deal.
Sure. You know, it's funny listening to you say it, because it does sound like there's a growth strategy there, right? You got machine shop number one from your dad. So obviously you got to get business number one somewhere, and then it sounds like you kind of repeated that for the second one. So just kind of like a scale, like you have another one where you can scale up. But, you know, the fact that you got a product line that used machine shops as the third place you were at, and then a spot that sounds like more of a dealership and some of the service for it, it does feel like a smart strategy in the way that you were growing.
Yeah. Yeah. I would say that it kind of morphed into that. I think initially it was just people that I would talk to, or like the machinery guy, you know, he was servicing our machines. Mhm. So, I was like, "Oh, hey, what's your plan?" So it was very organic how it happened. But yeah.
No, I think it makes sense. So, you made a comment, though: not every deal is a good deal. What are the red flags you look for, or just maybe a gut feel that you start to get where it's like, this isn't a machine shop that we should acquire?
Well, I think going into it, really not having experience in any of that M&A world, something that I've worked on developing a lot more is a mindset of trust but verify, as opposed to just trust, which, you know, sounds very basic, but to me that was a new thing. And just going over actual financials with a finer tooth comb and setting clearer expectations at the beginning really pay off, you know, whether that's your actual asset purchase agreement or even starting with your LOI. Having more clarity in that helps set the stage for success.
So, I would say red flags, big time, is culture. You know, I think that's probably number one. Obviously, financials are important, but you're not going to look at a deal if the financials aren't there. So, if it doesn't have a culture... If you're doing a rollup and you're bringing it into your existing location, that's huge. Obviously, your team needs to work together. But even if you're leaving it there, what's the temperature of people being willing to innovate and change the way they've done things for 40 or 50 years?
Got it. Okay. No, I'm writing down a lot of notes here, cuz the very powerful thing you said at the start of that was you have a mindset of trust but verify, which I think is very fair. That's a very engineering, manufacturing approach to it. You know, you talk about some of the things I feel like are kind of black and white, right? The financials, right? You either have good financials or they might be a little dicey. So, that one's a little easier to determine when you're doing your verification. Little things like the letter of intent, right? Setting expectations. I like that you highlighted culture as, you know, the potential red flag. You specifically mentioned a company's willingness to innovate. How quickly do you get that vibe from a machine shop when you walk through the door? Is it...
That's still something I'm figuring out, you know. It's just like, I think, coming from... you know, my heart behind what I'm doing is a lot more of a mission mindset, and just like, you know, really wanting to work with people, really wanting to make things happen and help people, you know, provide good paying jobs and employee equity. Those kind of things, I think, sometimes cause me to overlook some potential cultural misfits and stuff like that. So that's something I'm still learning, like how do you figure out if this person is trustworthy? You don't want to build a relationship for four years before you know it's the deal to do, you know, but how do you build that relationship and get to know somebody in their culture in a short amount of time?
So, well, and obviously a lot of people are going to be learning as they go during this process. Would you say up to this point your judgment's been pretty solid, right, with the ones that you've purchased and added to your portfolio, if you will?
I would say I'm probably about 50% of the way there. Okay. Yeah. So, and one thing that I've learned is just bring in... I've been fortunate to have a handful of mentors my whole life in different areas. And so, bring in people that have more experience than me, you know? I'm 31 now, so I've learned some stuff, right? But when it comes to being able to tap into those resources of other relationships and say, "Hey, what do you think about this person or this deal, or what vibe do you get?" I think that helps a lot more than me just trying to do it alone.
Yeah. So, it's one thing to talk about how do you find the machine shops. I'll get back to that in a second, but how do you find your mentors? How have you gone about locating those?
Oh, man. Some of them it's been recommendations just from talking to people in the industry, and they're like, "Oh, you know, you should talk to so and so. That's what they do." And then I talk with them, and if I feel like there's a connection there, I'll just ask. You know, you don't get what you don't ask for. And I'll just be like, "Hey, could we talk once a month, or could we talk when I have a question about a certain part of business or life?"
Another area is just, my wife and I play basketball twice a week, pickup games. And you know, when you're playing a sport or any active activity like that, you get to see a different side of people in their competition, in their relational qualities. And there was one person in particular that was just like, man, this guy pushes himself really hard. He's always supportive of his team. You know, when he fails, it's his fault. It's not like someone else did something wrong. And I was just like, I like that. And so that led to a really good mentorship. And he actually became an investor, too.
So there's a saying that's, if you want investment, ask for advice. And if you want advice, ask for investment. Yes. And I feel like that's so accurate because, I don't know, the concept of asking for money, but people are always going to give you advice because there's something to improve on, you know. But if you're asking for advice, people love that, and if you're willing to take it and learn and grow and actually put it into action, then they're like, oh, I see an investment here, you know.
Yeah. It's funny. You are literally the second person in less than a week... I don't know if this episode will come out before or after yours, but you're the second person that's brought that piece of advice up on the show. A young lady who's running a startup out of Pittsburgh brought it up as well. So, no, great piece of advice to drill home. I like that you mentioned you were finding folks, you know, through your extracurriculars like basketball. You know, in conversations you identified people where it's like, oh, this person seems to have this skill set, can I talk to you once a month, etc. And also, you know, just other folks being like, hey, you're trying to do this right now, you should talk to so and so. So, a few different paths to finding mentors, all of which I think are really good advice for how you find them. It's not all, you know, just coming up to someone and asking them, hey, will you be my mentor? It's having some intent behind it. And it's not always going to happen where you think it might happen.
Another good network for me was the SCORE mentorship program. You can just go online to, I think it's score.com/mentor or something like that. And it's a small... I think it's funded through the SBA. But basically it's a volunteer network that connects you with people who are looking to give back from their history and experience, and you just select what category you want advice in, and that was really helpful.
Yeah. Yeah, that was really good. SCORE mentorship. I'm gonna look them up and include a link to that in the show notes page for all the folks listening out there. I'm gonna ask you one more question on the buying of machine shops, then we're going to switch to how US MFG has evolved and where it's going. But we were talking about finding mentors. Now, an actionable piece of advice out there for the audience, because I just think there are so many machine shops out there. I don't know what the exact number is, but it's in the thousands of people that are going to be retiring that don't necessarily have a transition plan for the shop they own, which I think represents a once-in-a-generation type of entrepreneurship opportunity where folks can go out, whether it's buying an individual shop, whether it's teaming up with you, leveraging your software to buy a few and link them together. So, what would your advice be for entrepreneurs or prospective entrepreneurs of any age, whether they're our generation in their 30s, whether it's someone, hey, maybe they're in their 50s or 60s and they're looking for their next adventure? What would be your advice in terms of keeping an eye out, or specifically kind of where to look for some of these opportunities that might pop up to acquire a shop or some shops?
Yeah. So, a little bit more background on the actual number that are out there. So, back in, I think this was 2020, 2022, when we started US MFG, based on Census Bureau data there's 100,000 of these small manufacturers with under 20 employees that are owned by baby boomers. So, you know, they estimate that over half of them don't have succession plans. So, the opportunity isn't just prevalent. It's... so if that number is 100,000, that means it's 50,000 companies that don't have a succession plan right now.
So I mean, I would say first piece of advice I would say is, you know, do what you know, come from your background. Don't step into an area that is less known to you, because obviously it's going to be easier to run something that you know, but also you're going to have more respect from that seller, cuz these businesses are very personal. You know, it's been their baby for 40 years, and they're losing part of their identity when they sell it. So, they want to know that someone has experience and comes from the industry. Which sets a lot of people up really well. You know, if this is something you've already done for 10 or 15 or 20 years working for someone else, go knock on some doors. You probably already have
some industry connections. And, you know, start that conversation. And that's kind of the point of US MFG, you know, it's like help bring up those conversations. Maybe you've worked somewhere and the owner's 70 or 75, you never thought of having that conversation, like, you know, bring it up and here's how you can do it. So yeah.
No, I like that. So play — another way I heard what you describe is do what you know is the way you said it. Like play to your strengths, play to your experience, because there's going to be some natural respect there, like you said, has put a lot of their life into this. But yeah, with just the sheer number that you mentioned, I mean, it's just nuts. And I think that is a nice segue into maybe why you evolved your mission with what US MFG does, where you're not just focused on being the guy that's going to buy all the shops and bring them together under the software. Really, you're more focused on the community and the software and helping other people— Yes. —more or less replicate what you've done so far.
Yeah. Well, and really because the idea of small business ownership, I think, is kind of romanticized as like the epitome, like you're free, and it's like, well, actually there's a lot that goes into it. You know, when I bought the company from my dad, I still have a year left of paying him back. So, I'm almost done with that. But you know, I made like half of what I made when I was working for him because now it's my responsibility. Now, I have to make sure we make payroll and, you know, I'm the one staying late. So the concept of small business ownership, I think, is a lot more beautiful when you work together with people and you don't have to reinvent the wheel. You know, there's systems out there that help you grow and track metrics that help you improve that have already been figured out.
So if you can just build a network of people that have a collaborative mindset, that's I think where the real value is. You know, yes, you could go out and buy one or two or three by yourself or, you know, form a group, but imagine the opportunity if you had thousands of these working together, you know, and you're still incentivized, you know, you're still incentivized through the network because you're the majority owner, but the concept is just community, you know, and you're going to be going through the same process that a hundred other individuals are going through, you know, so you're all learning at the same time. It's in the same industry, manufacturing, but it can be across, you know, many different skill sets or, you know, specific areas of production.
Yeah. I like that you talked about how sometimes we overromanticize small to medium-sized business ownership. But I think one of the most important parts of what you just said is that, at least in my estimation, you're providing one of the things that most people are lacking when they buy a business, which is people that know exactly what they're going through to turn to. Community... assembly running very similar businesses to what they're doing and solve problems together. Yeah, that's a very cool mission.
That's — and to me that's the power. That's what the vision and the mission is about, as opposed to, you know, let's go out and buy a bunch, you know. And it's a lot more scalable when you think about empowering people to accomplish more by incentivizing them and connecting them. So, that's really why it morphed that way. And it's because I tried it the first way, you know, and it was like, oh, I was driving between Elgin and Hampshire and Rockford every day, you know, three different cities running three different shops.
Were all yours in, for lack of a better word, the greater Chicagoland region?
Yeah. They were about an hour and a half apart between all three of them. So, it was just—
But still, I can guarantee you pretty much every metropolitan region has a bunch of other shops that, you know, an entrepreneur in St. Louis or Kansas City or Little Rock could — they could leverage what you're creating and basically kind of create that little network just in their region. You don't have to go too far to find these little—
No, they are literally everywhere. If you drive down and you see a brick building, there might not even be a sign out front, but if there's a couple cars in there, yeah, it's probably manufacturing, you know. There's probably something — they might have a few presses in there or they might have a couple CNCs or, you know, stuff like that.
So, well, I want to get into your story and maybe your aha moment, if there was a moment or if this kind of gradually came to you, because like I said, 6 months ago, we were chatting and you were going to be the one buying the machine shops and putting your software on top of it to bring them together. And we should talk about the software at some point, because I'm interested to understand how that ties them together. But was there a moment where you realized your mission was changing or that you needed to change the mission of US MFG?
I think I got tired of being limited by my personal capabilities and just realized that, one, I've done things, but I don't have as much experience as I need to make the impact that I want to contribute to, you know. So coming to that realization was through doing stuff and failing and realizing, okay, I'm not so good in this area or I'm really good in this area. Well, how do you transform that into the vision? Well, we could provide support in areas for people who have worked in shops for a long time but maybe don't understand the finance side of it or the relational customer side of it or, you know, that sort of stuff. And I was like, because I've failed in those areas on my own, I already know this is probably a relevant resource that could be supported. So, it was a natural transition in my mindset. It wasn't really like one key aha moment. Although the more that I've thought about it since we've made that transition, the more I am like, I think this is the way to go. I think building a community is going to be more impactful.
Well, I mean, I'm biased because I've built a community with Manufacturing Happy Hour as well, but I totally hear what you're saying. But it was, as I understand it, very entrepreneurial of you to shift focus, because you were running your own business. You knew what it was like to run four machine shops and have to drive around between all of them. And, you know, obviously you were experiencing the challenges of being able to scale beyond that at the moment, but you also said, "Hey, if this is the challenge I'm having and I'm figuring a lot of this out on my own, why not I create a network so I can help other people out there do the same thing I've done?" Because you see the bigger opportunity, right? It's not, you know, just Russell Winter buying four machine shops, maybe someday eight, 10. It's, oh my goodness, there are tens of thousands of these out there. Why not I be the guy that helps out the broader community do what I've already done? Are you going to be publicizing your story quite a bit, of you going through the process of getting the four, because that's a huge credibility.
I would like to do that. Yeah. And I think that really the beauty of it comes out, and the goal of US MFG is for that to be like an employee-owned holding company, essentially an employee-owned network. So you're going to have these operating companies that are a partnership between an entrepreneur and US Manufacturing, and then US Manufacturing will be the employee-owned aspect of it. So all the employees will have a stake in the outcome and the success. So I think, yeah, the bigger play is building that network, and at the end of the day, the success of it will be based on the people, and they'll get paid out too because they're owners. So yeah.
So yeah, how does this work in practice now that you've got the mission out there? And I understand you're still in the early stages of it, but how do you see this playing out? Do you already have other entrepreneurs that you're speaking with that are already down the path of what you were doing? And I'm curious what the foundation of — I'll just call it the US MFG community — looks like.
Yeah. So we have — I think I'm talking with three or four entrepreneurs now and a few businesses that are looking to sell. Really our goal for 2025 is 5 to 10 deals. Okay. Add five or 10 to the network and kind of get that proof of concept with the entrepreneurial mission, now that we have partnering, you know, as opposed to doing it on our own. There's tons of people out there like me that can buy and run two or three or four shops, you know. So I think finding those people is our next step.
So I mean, part of it is we almost need to advertise for our industry a little bit, because I am confident in saying the majority of people don't realize what type of an opportunity is there to really come up with the next generation of manufacturing ownership, small and medium-sized manufacturing ownership in the US. What are the ways that we just create more awareness around that? Because honestly, I think that's going to be the bigger thing we need to overcome right now. I mean, these machines — I would hate it to be too late for folks to come and try to get these.
Yeah. I mean, that's an issue, because just even — I have personal experience with a family member that worked somewhere for 30 years, and he was a mold maker, and he knew what I was doing, and I said, "Hey, what's your boss's plans?" You know, and he's like, "Oh, it's going to his son," you know, that's the plan. And a year and a half later, he called me and said, "Oh, we're closing in 30 days. The son wants to do something else." And it's like, those are the kind of opportunities — you really don't want that to happen, because it's a loss of good jobs and it's a loss of a healthy business. So yeah, I mean, getting the word out there, it's stuff like this. It's, you know, being on LinkedIn and making connections and going to trade shows, and I think people just don't know about it, you know? So, I was talking with someone the other day that — she'd be really skilled to own and operate a manufacturing company, and the one person in the group asked her, "Well, have you thought about buying it?" And she's like, "No, I've never thought about that. I don't even know how to do that." It's kind of like, you don't have to know how to do it if you can partner with people who do. You know, the most value you can bring is your understanding of that business and how to grow it, you know, how to operate it. So people need to be empowered with that mindset of you can do it, you know.
Yeah. And this is where, with Manufacturing Happy Hour, I struggle sometimes as well, because I don't want this show just to be an echo chamber of, you know, our industry that knows there's an opportunity here. It's always trying to figure out how to get outside the figurative four walls of our industry, or the figurative four walls of an industry trade show. And I'd be interested to hear what you're doing. One thing I'm focused on is going to more of these general tech and general entrepreneurship events in different cities. Like, we're here in Milwaukee today. This is a city that I feel is still trying to find its tech identity, its entrepreneurial identity, versus somewhere like Pittsburgh, where I just was, that is very much focused on robotics and robotics applications, you know, because they have that history there. They have that talent coming from Carnegie Mellon University. I think there are more cities like Milwaukee out there right now that are trying to figure out what is our identity going to be as a region. What are our areas of specialties, our areas of expertise? Similar to what you were saying, right? If you're talking to a business owner, you need to show them the things that you know really well. It's not going to cut it to be like a general, hey, we're trying to be a tech-centric city right now, because we're past that point. It's like, what does that even mean? There's so many different segments of technology.
Yeah. Well, and just to touch back on when you said where do you find those people or how do you get that word out: I know we're working with our local high schools, you know, and the trades programs are coming back to high schools. When my dad grew up, they were in there. You know, there was a period where they kind of shut them down, at least in my area, and they're coming back. And I think it's great to get the next generation involved in manufacturing, but also educating them in financial literacy and the business side of it. Like, you know, my ideal goal would be — right now we've rolled the other companies into one location — so to have that serve as a training ground for when you come out of your training in high school or whatever, you know, like the actual skilled trades programs that are out there, that you could go through a small manufacturing company and learn the business management side of it in practice. So I think working with young people and having that intention to teach them to own and operate a business, I think, is the next level. It's good to get them involved. We need people to be manufacturers. But teaching them the financial side of it and the ownership mentality, I think, will go a long way in solving that.
Yeah. So, a couple questions there, because it sounds like part of it's the schools and part of it's, you know, your business that's doing the educating. So, with the schools, you are seeing trade schools — not trade schools — you're seeing the shop classes and things like that come back in high school.
Oh, yeah. There's a handful just in our area, you know, Chicago to Rockford. There's a lot of high schools that are putting in milling and turning and 3D printing and stuff like that. Which I'm like, man, I wish I could have gone to that. That would have been great.
Yeah. No, I mean, when did you start seeing that come back into play? And I'll be honest, I went to a high school that did not have it as well. And then I went to be an engineer, where you have your manufacturing classes in college and things like that. And I'm just thinking to myself, I would have felt a little more prepared for this having that hands-on shop class.
Well, I mean, I'm probably not the best person to ask, but I remember seeing them four or five years ago, and I'm sure they were, you know, starting up, because it takes a long time to build those out, but at least the past 5 years.
Well, and I'm not necessarily looking for an exact answer. In fact, one of the goals of Manufacturing Happy Hour is to try to explore the things that we anecdotally hear over and over and over again. And I was just talking to someone on social media that was talking about the shop classes that are available in the Upper Peninsula right now. So, you know, we're hearing it in different parts of the Midwest, from the UP down to Chicago, and no doubt other spots. But I'm glad this is a repeat conversation that I'm hearing more so than a one-off. It's like, "Oh, yeah. We have a shop class in the middle of Kansas or something like that."
Yeah. I think the cool part about these shop classes that I'm involved with is their instructors are often very mutual and collaborative with the industry that's around the high school, you know. So, they'll have a board of business owners saying, "Hey, this is who we're looking to hire. Can you teach
them more turning work, or can you teach them Mastercam, or can you teach them a specific software that people utilize in this area or skill set? So I think that's ideal.
So it's even more pragmatic because industry is providing feedback all the way down to the high school level as to what folks need to be focused on. That's excellent. We need more of that around. You were also talking about how there's the financial literacy aspect to this as well, because that is another area that I feel is not taught enough in high school or college, just how to freaking manage your finances and things like that. So you mentioned your shops are doing that. How are you doing it?
So what we're working on right now, we're in the middle of implementing EOS and the Great Game of Business, which is like open-book management. So basically integrating those principles into our SOP of how we do this, right? And so I think there's a personal aspect to it. We're teaching people about personal finance, right? Using your life almost like a business where there's money in and money out, and you can't improve what you don't measure, you know, that metric.
So that's what we're in the middle of right now, where, you know, I basically had to learn it all, and then I was like, oh, I'll learn it better if I work with the GM and teach him how to do it, and we'll keep learning. And then it's like, okay, now we've got to bring another shop guy in and start going through that, have the GM teaching that. So that's how we're doing it now.
You know, I love this good back and forth we're having here around the evolution of shop classes, talking a little bit about what we think it's going to take manufacturing scenes, or tech and manufacturing scenes, to really get their identity. One thing I want to make sure we cover is, you mentioned that you have software that kind of ties these machine shops together. Without getting too into the weeds, give us the high-level, like one, two, three things we should know about how it ties it together, because I think that'll also just help in understanding what's important to measure in a machine shop and things like that as well.
What it really came from, it was an outgrowth of just realizing that there was a pain point. Growing up in the small machine shop, it was famine or a feast. We were super busy or we were just dead, you know. But the shop across the street from us could have been busy when we were slow. And so the concept was, okay, if we're going to build a network of people that are working together, a real value would be balancing out those different times and creating a system where you can send work and you can send employees between close locations. Work is easier to send a little farther away, but employees are still usually based out of one location.
So, yeah, the software, along with streamlining ISO for us, just tracking and managing and stuff like that, it really helps with balancing workflows and labor between similarly situated companies and capabilities.
All right, so big takeaway, balancing workflows between the different companies. Awesome. Well, I appreciate the overview of that. As we get to the end of our conversation, is there anything you wish I would have asked you that we haven't talked about yet today? We've covered your journey that led you from buying machine shops to building this US MFG community that you're right on the cusp of. And we had some good conversation around the evolution of practical manufacturing education at an earlier age.
I think one thing I want to talk about is having fun. Yeah, you know, just enjoy it. I think the more I'm learning, it's like if I'm having fun with something, I get a lot done, you know. Find something that, you know, it's still work, but you at least enjoy it, right? And so when I feel like I'm contributing to something that's bigger than me, I get fired up about it. So some of the company stuff when it comes to building that culture is laughing and just enjoying each other. All I want to do is build a culture where we like working together and we're working on something that's challenging. And I think a lot of people relate to that. They just want to work on a challenge and fully apply themselves and make a difference. And you're most effective when you're enjoying it.
So you mentioned you're having fun now because of the bigger mission that you're focused on. Since we were talking earlier about, hey, what does it take to get more people into this industry, what were you having fun with when you were on the lathe, on the equipment, building stuff? Tell us a bit more about that. I think this will be a fun way to wrap it up.
Oh, I enjoyed being out in the shop and programming, just really getting your head into a project, just being fully immersed. Tool and die is close tolerances and there's a lot of details. And so I enjoyed that when I was out there doing that, because it's almost like a flow state, like when you're playing sports and you're just fully focused on that one thing. You kind of get lost in it and you do a really good job because you're focused. So that was always fun for me.
It was definitely a change of mindset between that and working on the financials or negotiating with sellers. Then it was a different aspect of fun to me, because I could really focus on building a relationship with someone and trusting each other. So I kind of always hone in on one or two things and just really drill deep into it, and I think both of those things were satisfying to me.
Yeah, you're building a part, you're building a relationship, you're building a company. There's a constant theme of building here. What was the first thing you remember making? It doesn't need to be the first. It could just be one that stands out as well. Maybe it was a challenge.
I think the first complicated workholding fixture that I made, I think there were 17 parts and nine different stations, different positions it would clamp it in. So I don't know how many Mitee-Bite clamps and stuff. It was wire EDM for holding in different positions. And I remember laying that out and being like, "Nice, you know, I did it." It took me probably a month to build it.
What did it feel like to finally have it in your hand? Well, it was very heavy, right? Yes, not literally in your hand, but to finally have that workholding cell created.
Oh, yeah. I mean, it's very satisfying, because you realize that now you can do 10 times as much work because you put time into designing something, right? And because it was a small family shop, I did everything. I modeled it out, wire burned it, machined it, assembled it, and then put it into practice. I think it's very satisfying to be involved at every stage of a project too, you know. So that was a good one.
No, I appreciate you taking us through your personal story, some of the anecdotes we talked about. Great advice in terms of mentorship, looking for companies to buy, how to do it. And I enjoyed the conversation just riffing on the future of manufacturing as well. So I know it's lattes rather than a beer, but hey, we're still going to end with a cheers. Russell, thanks so much for jumping on Manufacturing Happy Hour. Cheers.
Article published