Building Business - From Buying to Selling with Joe Staffeld

Joe Staffeld has experienced a lot in business. Starting as a salesperson for Albco Foundary, he eventually worked his way up to being the owner. As he looks toward the future, he's beginning to prepare the roadmap for his business. From expansion to succession, we will get Joe's thoughts on manufacturing and the future of the industry.

Joe Staffeld President/CEO at Albco Foundry and Machine Youngstown, Ohio

Joe Staffeld serves as the President and CEO of Albco Foundry and Machine, a company based in Youngstown, Ohio. With a Mechanical Engineering Technology degree from the University of Akron, and an MBA from Malone College, Joe has a deep background in manufacturing(specifically metal casting processes), mold design, and 3D modeling.

He is known for leading the company's transition from manual machining to CNC production, significantly improving efficiency. Joe also streamlined Albco's mold-making capabilities, positioning the company for continued growth.

Professionally, Joe excels in manufacturing sales, leveraging his technical expertise to drive business success. In his personal life, he enjoys coaching high school soccer, Lake Erie boating, and gardening, which offer a perfect balance to his busy career.

[00:00:11.27] - Alice

Hello. Welcome to Books in the Biz, a podcast that looks at both the financial and operational sides of success. Please welcome our hosts, Dan Paulson and Richard Veltre. Dan is the CEO of Envision Development International, and he works with leaders to increase sales and profits through great cultures with solid operations. Rich is CEO of the Veltri Group and a financial strategist working with companies to manage their money more effectively. Now on to the podcast.

[00:00:44.13] - Dan Paulson

Hello and welcome to Books in the Biz. Rich, how are you doing today?

[00:00:48.12] - Rich Veltre

I'm doing well, thank you. How are you?

[00:00:50.17] - Dan Paulson

I am doing wonderful. It's warming up in the state of Wisconsin. No more permafrost, so that is excellent. And we have a special guest with us today, Joe, Joe Staffeld. How are you doing?

[00:01:02.03] - Joe Staffeld

Excellent. Thanks for having me.

[00:01:04.06] - Dan Paulson

You bet. Glad to have you here. So Rich, to give you a little bit of background, Joe and I met on a cruise of all places. Actually before a cruise, I believe we were off sipping Pina Coladas in the bar that Pina Coladas were invented in, or so they tell us anyway. Barrachina. Barrachina, Barrachina. And ever since then, we got to hang out on the cruise together, got to learn a little bit more about Joe and what he's doing. And nice part is, you got some interesting stories to tell us that I think align with what we have been preaching about for a long, long time. So why don't you give us a little bit of background of you, the company you own, and how you got to where you're at today.

[00:01:46.15] - Joe Staffeld

Yeah, I'm an owner CEO of Foundry, located just south of Youngstown, Ohio. Basically, it's two foundries under one roof. So we have two different processes. The Foundry was started in 1956 in Hubbard, Ohio, and then moved to its current location in 1962. My father bought into this business in 1977. They had, I think, nine employees and twelve shareholders. Over the years, he and the two other sons of the original founder proceeded to buy the shareholders out. And I came on board in '99 as an employee, and then learned the ropes along the way, and then bought my dad out in '04, and bought his partner out in 2011, 2012.

[00:02:46.21] - Dan Paulson

Nice. So that got you to at least where we're talking about today. Give me a little bit of background on that. What was it like working for a family business? Because we know there's a lot of them out there.

[00:02:57.16] - Joe Staffeld

Yeah, well, it wasn't handed to me. I graduated college in the early '90s with an engineering degree, and my dad said, you need to go get 10 years of experience. You need an MBA, and you need about three to four years of sales experience in engineering or manufacturing sales. He's like, you're not going to come in and ride the coattails and have some Tommy boy moments in this business. Make your mistakes on someone else's tab. So the next 10 years, I followed through with his guidance and mentorship, and they hired me in 1999 as a sales manager. They created a position for me to come in and grow sales in different industries, because we at that point in time, I think, Diebold had become like 35 % of our total sales, and we needed to do something to change that. We needed to shrink their presence as a big player in our business. So I did that, and brought in some CNC equipment, modernized and automated a lot of the processes for them So here we are.

[00:04:18.05] - Dan Paulson

Rich, what do you got?

[00:04:20.14] - Rich Veltre

So what were you doing? What were you manufacturing for Dibold?

[00:04:23.29] - Joe Staffeld

A lot of pieces, parts for their ATMs, deposit boxes, night time depositories, any mechanism that was internal workings. Okay.

[00:04:38.15] - Rich Veltre

At this point, are you at the point now where you're starting to see that you've done all the acquiring in? Are you now trying to see how acquiring or having someone else acquire in? Do you have a vision for where this might be headed? Or you feel it?

[00:04:56.14] - Joe Staffeld

Yeah. As far as... Well, I did bring a business partner in I've sold him 30% of the business. He's a few years younger than me. The intentions are to eventually, down the road, have him take on a larger share of the business. And we recently hired a tooling engineer with a very good background who's shown an interest in some ownership. But I've been courted by multiple companies looking to acquire us, but I I turned them away at this point. I'm still a little. I'm not ready to move yet, but this isn't something that can happen overnight. I'm not going to just show up on Friday and say, hey, guys, I'm done. You need to have a team in place and to do that. And it took me back to my early, early '90s, when my first real job out of college, everyone, all the rage was this Stephen Covey, seven habits of highly successful people. The one thing that stuck with me over the years was begin with the end in mind. I didn't buy into this business in '99, 2000s, with the end in mind at that point in time. But trust me, over the last 20 years, it's crossed my mind, what's my end game?

[00:06:21.11] - Joe Staffeld

How am I going to get out? Was it going to be one of my children that came into the business? The older one is going to go to med school. My middle child graduates in May. It's going to be a school teacher like mom. And my youngest is studying chemical engineering at Ohio State. None of them at this point in time have come to me and said, Hey, I really want to work in the family business. They've all worked there in the summers, pushing a button on the CNC machine and pushing a broom around for us. But at this point, it doesn't look like it's going to be handed down to the next generation of my family. Okay. Do you- Go ahead.

[00:07:04.03] - Rich Veltre

Do you see it? Because it's interesting to me.

[00:07:08.04] - Joe Staffeld

Do you see it as more strategic or better for you to allow the outside companies to court you, or do you see it more along the lines of this is an apprentice sale?

[00:07:24.11] - Rich Veltre

And I bring this up because someone hit me with that today, and I never really kept the apprentice sale a lot in my head, but it does seem to be out there where you get a slightly older partner, gets a younger partner, and then as they grow, the younger partner buys out the older partner, and then it just repeats. So the business can still grow. So I didn't know if you had thought of that or if that was part of your thought pattern.

[00:07:48.24] - Joe Staffeld

That's what happened to me. I mean, I had grown up drilling holes in parts since eighth grade. Always thought that this is where I was going to end up. And when I graduated, that job wasn't there. I had to go find my own job. It was just not part of the plan. They didn't have a succession plan when they hired me. I think it was something that popped in their head like, oh, this guy could come in and learn the ropes, and then we could go play more golf and take more trips. And it was a smooth transition, but I really had to push for it. I had to show them that I wanted it, show them that I was capable of it. It's definitely something I know how to do that more than sell it to an outside party. Because I've been through the process on the other side of the table. And I think going with an outside company would be more challenging, and I think there'd be more negotiating. But at that point, I think I'd probably get a higher price for it as well if I decided to go that route.

[00:09:07.03] - Joe Staffeld

I think selling to my business partner and another younger individual that we hired and brought in, I would be willing to stay on board as a consultant and sell, and come in and cover, if they needed to take a vacation or needed me as a sub-influence. Okay.

[00:09:29.19] - Dan Paulson

So We've talked quite a bit on the cruise ship, and we talked a little bit even before we got on the recording here. What you experience, I think, is different than what a lot of people experience, especially in family-run businesses where it's almost expected that one of the siblings or one of the children will take over, take responsibility for it, and they're almost gifted into it. When we talked before, I mentioned that most businesses don't survive three generations. Patience. There's the first one that builds it, second one grows it, third one kills it. And your dad took quite a different approach. So it intrigues me that he had the foresight, even if he wasn't thinking about succession, that you needed outside experience. You need to cut your teeth before you were handed the reins on anything. And I mean, what would you tell other companies out there? Because we know right now there's probably 70 % of businesses are going to exchange to change hands in the next 10 years. So what would you tell somebody else if they were getting ready to or considering what their next option is?

[00:10:41.15] - Joe Staffeld

I think it was brilliant. I really do. He's one of the smartest guys I ever knew. And it was a good experience. It allowed me to spread my own wings and do my own thing and learn. And I had access to training and management courses And these outside companies picked up the tab on some of my graduate school. I was able to travel with them and see equipment, modern equipment and modern processes, things that really weren't available or our small little family business didn't have access to. And to be able to see it all, experience it all, work with this expensive software and these five axes CNC machines, and then to come into this small little business that didn't have any of that, and just introduce them into what a CNC machine was, and what 3D modeling was, and 3D printing. They didn't use it. And I was able to expose myself to it, and then bring that to our business, and just bring them into the new technology. That's really what we had to do it.

[00:12:01.11] - Dan Paulson

Yeah, if you're going to keep up with what's needed in today's age, that's about the only way you can compete, is you really have to see what others are doing and modify towards that. What was the... I guess in that transition phase. So as you said, your parents or your dad didn't really have a succession plan in place, you nudged the issue along, we'll say. What was that process like? How did the discussion go? What transpired over the next several years before you finally started buying into the business?

[00:12:34.02] - Joe Staffeld

Yeah. Well, they brought me in for an interview. It was an actual... This was not a, Hey, let's go have lunch. I had to interview with my dad's business partner. At that time, my dad was the minority shareholder of this.

[00:12:50.22] - Dan Paulson

Oh, okay.

[00:12:51.20] - Joe Staffeld

So he was not the majority shareholder. He was a minority shareholder. He said, You will need to speak to my boss, my president, my business partner. My dad was vice Vice President, and Bill was the president. So Bill and I had multiple conversations, and he said, what do you need? I told him, I need this salary. I need a cell phone, and I need a company car, and I'm going to come in and grow your sales for you. They brought me in, and that was '99, 2000. By 2004, we had met with some attorneys, met with CPA. These were local people that had been their Council of the business for years. There was already an established calculation for the valuation that they would review on an annual basis. They met quarterly. I accept this calculation. I got to sit in on their quarterly meetings when they would close the quarter, got to sit in when we close the fiscal year. I just learned a lot about the books and how profitable the business could be at times, and thought, okay, I could afford it. And it was an earnout. I did not have to go get commercial paper, go get a bank involved.

[00:14:10.08] - Joe Staffeld

These guys, they financed it, and it was a 15 year note. The go and rate. And I had a lot of my golf buddies, I've got a car payment, house payment, boat payment. I didn't have that, but it was like I had a foundry payment. And it was big. But we're done with all that now. But it took a long time. Yeah.

[00:14:37.15] - Dan Paulson

Well, the difference between the car payment and the foundry payment is the foundry payment is now paying you back, where the car is probably long gone and replaced by another car, placed by another car. We all know what that is.

[00:14:50.21] - Joe Staffeld

So once I had my dad's 40 % tied up in '04, I worked another seven years with his business partner. And in a 2010, 2011, Bill let me know that it was time for him to go. So we sat down and did the same calculations, and I signed up another note with Bill to get a second foundry payment. Other half, over half of the business. It was a 60, 40 split. My dad's 40 and then Bill's 60. And then the following year, I sold half of what I bought from my dad's partner to a young gentleman that I had met and interviewed and said, okay, this is going to be my business partner, which is like a marriage. It's my work wife, work husband. But he's a great man, good family man, hard worker, and amazing guy.

[00:15:57.26] - Dan Paulson

So what was the process you went through to find him?

[00:15:59.09] - Joe Staffeld

This is a weird story. I had bought an old hobby farm, and I was out hunting in the woods, and he lived down the street, and he happened to have permission to hunt in the woods behind my property. And I found Dan in the woods, literally. We crossed paths. I said, Hey, I'm Joe. Hi, I'm Dan. Where are you from? I live up the street. And what do you do? And find out we're neighbors. And we had similar hobbies. He was in manufacturing, and he was in between jobs. The company that he was working for locally had downsized. And I think his wife is an executive with a design company, and she was possibly being transferred. And I think they were looking to move to Ann Arbor, Michigan. And I think at that time, I hired him before I bought the other half of the business. And I had called my business My business partner said, Hey, I really want you to meet this guy, and we got to interview him, and I want to make an offer to him. He's like, I'll be home in a couple of weeks. He's down in Florida. I'll be home in a couple of weeks.

[00:17:10.29] - Joe Staffeld

I'll talk to him. No, he's going up to buy a house right now. And Bill just said, Hey, he's going to be your business partner. He goes, You do what you need to do. He goes, I don't have to deal with him. So I called Dan and said, Hey, turn around. You're going to come here. Work for two years. Things work out. You can buy in. So that's how I found Dan. It's been a great partnership. Been over partners for over 13, 14 years now. Worked together for 15 years.

[00:17:46.05] - Dan Paulson

So is he eventually looking for another foundry payment and going to take a bigger chunk of the equity?

[00:17:52.19] - Joe Staffeld

Hopefully, hopefully. I told him that my window is 5 to 10 years out, and he's quite a few, not a lot younger than me, but he plans to work until 62, and I think he's six years younger than me. I think the intentions are there, and that might be his desire to take on a larger chunk of it. But this younger guy that we brought in last year is doing a great job for us. I told him that if things worked out in two years, he would have a ownership opportunity. So we did a nationwide search, and we vetted a lot of guys, and he dotted all the I's and crossed all the T's for someone that we wanted to go into business with.

[00:18:52.16] - Dan Paulson

So. Excellent. Rich, what questions do you have? I've been taking up all the time here.

[00:18:59.03] - Rich Veltre

No, I think you You were hitting on all the questions that I was thinking of. Yeah, I'm blanking.

[00:19:08.05] - Dan Paulson

I blanked Rich. That never happened. It doesn't happen.

[00:19:13.18] - Rich Veltre

No one shuts me up except for Dan.

[00:19:18.04] - Dan Paulson

Well, here's a question for you, Joe. You talked a little bit about your relationship with your dad. What was it like working with your father? Because there's a number of multi-generational businesses out there. We often hear about the dynamics that tends to happen in those companies. Any family has its challenges, but you hear about the infighting and the push for power, the push for control. What was it like working with your dad?

[00:19:47.27] - Joe Staffeld

Well, he was my dad first, and then a coach. He coached baseball, wrestling. So we were always spending a lot of time together, taught me how to do a lot of things. But when I went to work for him full-time, I'd work part-time over the years, drilling holes in parts or grinding, or I helped put in our first computer. And and hooked up a novel network system for them.

[00:20:18.29] - Dan Paulson

That's dating all of us.

[00:20:20.22] - Joe Staffeld

Yeah. Monochrome monitors that weighed 400 pounds. It was fun. But we had our moments, because during those times, I was part-time. I was a poor college kid or a poor high school kid and needed his financial support. When they hired me, I was my own man by then. I had worked for other people. I had money in the bank. I was married. I had a son. So it was a different... He looked at me as a coworker or an employee, and he was my boss. I showed that respect to him. But there were times And when I said, hey, we need to buy a CNC machine. We're getting our heads caved in on some of this stuff, manual machining and stuff. The way we're doing it, it's taking too long. And I just finished my MBA. And he's like, well, show me the return. So I'm like, all right. So I had to get my spreadsheet out and do all these calculations. I took one or two parts from Dibold and said, okay, it's currently taking us 14 minutes to machine this part. On the CNC machine, it's going to take us two minutes. And so at 12 minutes at our current shop rate, I justified buying this piece of equipment with two parts, and said, the payback is going to be in six months.

[00:21:44.14] - Joe Staffeld

He's like, really? He's like, Can we buy five? And I'm like, Well, we only need one right now. But, yeah, we'd like to grow with this. But we locked horns with butted heads, but it was in a respectful coworker thing. We had our own home life outside of that. And then he was a grandfather, too, my children. So it was at the same time. But it was a good relationship. And I miss him. You showed me all these Thursdays on your calendar, and I looked, right there. And I picked today to honor him, because today is the six year anniversary of when he passed. So So that's why I picked today.

[00:22:33.01] - Dan Paulson

Well, it's a good way to honor him. And I think another way you can honor him with any other listeners or anyone who eventually tunes into this podcast. We talked a little bit about it on this, but we talked more about before as we were prepping for this, companies don't prepare for the future. When you look at what you've done, and when you look at other businesses, maybe you have other connections that you're aware of that they're starting to think along the same lines of what's my next move or what's my end game, what do you tell them? Because we were joking around beforehand that most people is like, they wait until they're at their most frustrated point about something, and they're looking at their watch, and they're looking at the calendar at their age, and they're going, there's much better things I could be doing right now. I'm done. And then they want to be done now, get me out of here in the next six months. And as you pointed out previously, it takes more than six months just to find somebody to broker the business off.

[00:23:38.08] - Joe Staffeld

Yeah, you got to figure out what it's worth, and you got to pack it. And if it's going to be an outside company that's coming in, they're going to want to see the last multiple years of your tax returns, your balance statements, your profit and loss. You need to have that in good shape. Now, if you're looking at almost like that apprenticeship type handoff, where it's like an earn out, these guys are already intimately aware of what the company can do, bottom line. None of income, they're comfortable with it. They know everything. And it's like, yeah, okay, let's just do this. But, yeah, to prepare for it, for another business, to hand it off or to sell it. It's going to take a three to five years, six years, to start thinking about your exit, unless someone just comes in off the street and wants your business.

[00:24:43.02] - Dan Paulson

How many people do you know Rich, that are willing to walk in and write a huge check?

[00:24:46.29] - Joe Staffeld

None. None?

[00:24:48.18] - Dan Paulson

Well, damn it. I was hoping there be somebody out there that I could- I was always hoping there be people in my back pocket that could do that, but they're not They're just not there.

[00:25:00.27] - Rich Veltre

They're just not there. They want too many assurances and checks and balances. They want to know all that before they're even going to think about writing a check. And even then, they may not.

[00:25:14.01] - Dan Paulson

Well, the only time I've ever seen that happen is when somebody's buying out their competition, and they're just paying a lot of money to make a thorn in their side go away.

[00:25:21.05] - Joe Staffeld

Yeah. Yeah. Well, then in that three to five year period, you need to become a larger thorn.

[00:25:29.12] - Dan Paulson

Yes. Yes, and most companies don't do that. They don't do that. No. What other advice would you give to a business owner that might be considering their next move, Joe?

[00:25:45.13] - Joe Staffeld

What are you going to do when you're done? I mean, it's like the journey. You climbed Mount Everest, you made it to the top, and now what? What are you going to do later? You got to have some ideas of what are your interests, hobbies? Are you going to find a second career? Those are things I think you introduced me to someone I've recommended a book. It says, Finish big? Yeah. So I'm buzzing through that right now, but what's the next chapter going to have for you? You can't just leave on a Friday and be retired on Monday, and, okay, what am I doing?

[00:26:29.27] - Rich Veltre

Yeah, there's very few people that can play a round of golf every day or several rounds of golf every day for the rest of their life and feel fulfilled by it.

[00:26:39.04] - Joe Staffeld

I know a couple of guys like that. That's not me, though.

[00:26:41.20] - Dan Paulson

Yeah, that's a very small handful, whether it's fishing or golf or vacationing or whatever. You need something to keep your mind active. You really don't last long because once your purpose is gone, pretty much that's when a lot of people check out. Yeah. Well, excellent. Well, Joe, thank you for your time. If somebody needs to get a hold of you, especially for any parts or components, what's the best way to do it?

[00:27:07.18] - Joe Staffeld

Joe, J-O-E@A-L-B-C-O.com. That's my email address.

[00:27:14.05] - Dan Paulson

Excellent Well, we hope they will check you out and get some parts ordered through you. Rich, how do they get a hold of us? Take a bow.

[00:27:23.22] - Rich Veltre

E-mail is always the best, rich@xcxo.net.

[00:27:28.06] - Dan Paulson

And you can get me at dan@xcxo.net. If you want to catch this interview with Joe as well as others, you can visit booksnbiz.com. That is B-O-O-K-S, the letter N-B-I-Z. Com. Be sure to like, share, and subscribe because that's what they always tell us to do. And Bob, take it away.

[00:27:47.15] - Bob

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