Selling a business is rarely just about the numbers—and in this episode of Buy the Numbers, we explore why. Recorded at the CLA Connect Center in Minnesota, Mike Payne and guest co-host Erin Mickels sit down with two sets of owners who have recently gone through the process of selling their companies. From fielding unsolicited offers to choosing between 26 potential buyers, their stories highlight the strategic, emotional, and deeply personal factors that shape a sale.

Joel Bauer of Midsota Manufacturing shares his unlikely journey from part-time welder to co-owner of a thriving 132-employee operation. When industry consolidation threatened to change the game, he had to decide whether to expand aggressively or seek the right partner to carry the business forward. Tyler and Ashley Arrell, owners of Perfect Exteriors, walk us through their experience navigating private equity interest, evaluating strategic buyers, and prioritizing their team's future over the highest payout.

Throughout the conversation, Erin provides expert perspective from CLA's owner transition services team, breaking down how to evaluate offers, run an efficient process, and protect your legacy. The discussion covers everything from preparing your books for sophisticated buyers to why you should always run your business as if you're planning to sell—even if you aren't.

If you've ever wondered how to choose between multiple offers, when to bring in professional advisors, or how to ensure your employees and customers are taken care of after the deal closes, this episode delivers both the technical insights and the human side of the transaction.

You will want to hear this episode if you are interested in...

• (0:32) Grow your top and bottom line with CLA
• (1:40) Introducing the guest co-host and today's panel of sellers
• (3:56) Joel Bauer's unconventional path to business ownership and growth
• (7:37) Tyler and Ashley Arrell's journey to business ownership
• (12:35) The role of unsolicited offers in starting the sales process
• (14:33) How CLA helped assess and improve offers
• (17:36) Choosing between strategic buyers, private equity, and individuals
• (18:21) Fit, culture, and legacy versus the top-dollar offer
• (21:00) Narrowing down dozens of interested buyers
• (23:00) Why buyer interviews reveal more than just numbers
• (24:23) Considering internal transitions versus external sales
• (27:00) Running your business like you'll sell it—whether you do or not
• (32:26) Nail the 7 habits of highly effective workholding with SMW Autoblok
• (33:08) Handling the sale process while keeping the business healthy
• (38:47) How unexpected events often accelerate sales decisions
• (40:50) Inside the interview process with potential buyers
• (44:13) The broker's role in standing firm during negotiations
• (49:28) Why legal, tax, and financial specialists matter in M&A deals
• (50:22) Final advice for owners considering a sale
• (55:20) Navigating surprises in the buy/sell process
• (1:05:13) Register for Top Shops and get 20% off with code MAK20

Resources & People Mentioned

• Grow your top and bottom line with CLA
• Nail the 7 habits of highly effective workholding with SMW Autoblok
• Register for Top Shops and get 20% off with code MAK20!

Connect with CLA

• Clifton Larson Allen (CLA)

Connect With Buy the Numbers

• Follow on LinkedIn
• Connect with Mike Payne on LinkedIn

Subscribe to Buy the Numbers

on Apple + Spotify

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If you think selling your business is just about getting the highest number, think again. In Part II of my conversation with the all-star team at CLA—Erin Mickels, Mike Britten, and Mike Pohl—we dig into the fine print that can make or break your deal after the handshake. From LOIs to sales price allocations to working capital battles, this is where the real money is won or lost.

We start with what seems like a formality—signing the LOI—but as you'll hear, that's often the moment your leverage walks out the door. I've seen it firsthand: missed tax planning, bad rollovers, vague language that bites back later. This episode is all about what to watch for before you sign and how to avoid rookie mistakes that can cost you millions.

Then we dive deep into the deal mechanics that trip up even seasoned sellers—working capital disputes, earnout illusions, and how sales price allocations affect what actually ends up in your pocket. If you've never had a deal derailed over working capital, you're lucky. But most sellers? They're not ready for that fight—and it's why deals fall apart at the 11th hour.

And once the wire hits your account? That's not the end—it's the start of a whole new challenge. What do you actually do with that liquidity? How do you avoid the tax bomb that comes a year later? How does your risk profile shift when you're no longer a builder, but a steward of capital?

If you're serious about getting full value for the company you've spent a lifetime building—this episode is essential listening.

You will want to hear this episode if you are interested in...

• (0:15) Grow your top and bottom-line with CLA
• (1:54) Structuring employee retention bonuses after a sale
• (2:55) Why you shouldn't sign an LOI without legal and tax review
• (11:02) What buyers scrutinize during financial due diligence
• (11:45) Working capital and earn-out frameworks
• (14:18) The challenge of valuing work-in-progress (WIP) in deals
• (16:51) The importance of post-close working capital adjustments
• (17:57) How sales price allocation impacts your tax bill
• (21:44) How ProShop ERP can help you achieve on-time delivery
• (24:12) Understanding which assets are taxed at ordinary income vs. capital gains
• (25:40) How earnouts tied to employment can trigger wage tax
• (27:15) What to do (and not do) after receiving your payout
• (29:40) How selling changes your risk profile and investment approach
• (32:08) How to value fully depreciated assets in a business sale
• (34:40) What determines your company's EBITDA multiple
• (36:06) Mike's "psycho spreadsheet" for modeling post-acquisition performance
• (38:12) Valuation as both art and science in the lower middle market
• (42:08) How Qualifying Small Business Stock (QSBS) can help you avoid federal taxes
• (44:18) Why complex tax strategies require early planning and good advisors
• (45:44) Stay tuned for Top Shops 2025 registration!

Resources & People Mentioned

• Grow your top and bottom-line with CLA
• How ProShop ERP can help you achieve on-time delivery

Connect with CLA

• Connect with Erin Mickels, CPA
• Connect with Mike Britten
• Connect with Michael Pohl, CPA, CFP®

Connect With Buy the Numbers

• Follow on LinkedIn
• Connect with Mike Payne on LinkedIn

Subscribe to Buy the Numbers

on Apple + Spotify

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If you've ever thought, "I'll sell when I'm ready"—you're already behind. In this episode of Buy the Numbers, I sit down with three powerhouse advisors from CLA—Erin Mickels (owner transition expert), Mike Britten (tax wizard), and Mike Pohl (wealth whisperer)—to unpack what it really takes to set yourself up for a successful exit from your manufacturing business.

We talk through the overlooked planning window between "someday I'll sell" and "it's time to list." Whether you're ten years out or just three, this conversation will help you shift your mindset from just growing revenue to building transferable value. Because a higher top line doesn't always mean a bigger payday—and once you understand the levers that actually impact valuation, you can start pulling them now.

We also hit some real talk about what happens after the wire hits your account. What are your personal goals? How much do you actually need to retire, launch your next thing, or leave a legacy? And how can you avoid giving too much to the IRS—or your kids, if that's your preference?

Bottom line: The best exits aren't lucky. They're engineered. And if you want to stack the odds in your favor, this episode will show you where to start.

You will want to hear this episode if you are interested in...

• (0:12) Grow your top and bottom line with CLA
• (1:20) Meet the guests: CLA's experts in wealth, tax, and transition
• (4:03) Start with the end in mind: How much do you really need to walk away?
• (8:10) Why personal financial clarity should come before valuation
• (11:37) Bridging the gap between what your business is worth and what you need
• (14:10) Growing value ≠ growing revenue—what actually drives multiples
• (15:32) The buyer's perspective: asset sales, stock sales, and tax surprises
• (17:44) Market timing matters: Don't let ego miss the window
• (19:37) Check out Verdant Commercial Capital to get a true partner in your corner
• (20:17) Why it's normal to feel overwhelmed—and how to build the right team
• (22:30) The critical three-year window: Your numbers matter more than ever
• (27:00) From handwritten notes to a valuation nightmare
• (28:10) Here's why you need quality audited/reviewed financials
• (31:25) Quality of earnings reports: Not just validation, but storytelling
• (32:43) Building buyer confidence with customer profiles and payment history
• (35:24) Don't ignore risk: succession, estate planning, and key-person exposure
• (38:10) Tax landmines: personal expenses, nexus issues, and employee bonuses
• (41:42) Top Shops 2025 preview—join us in Charlotte!

Resources & People Mentioned

• Grow your top and bottom line with CLA
• Check out Verdant Commercial Capital to get a true partner in your corner
• Top Shops 2025 preview—join us in Charlotte!

Connect with CLA

• Connect with Erin Mickels, CPA
• Connect with Mike Britten
• Connect with Michael Pohl, CPA, CFP®

Connect With Buy the Numbers

• Follow on LinkedIn
• Connect with Mike Payne on LinkedIn

Subscribe to Buy the Numbers

on Apple + Spotify

When I first heard about the "One Big Beautiful Bill," I knew we had to break it down for the MakingChips audience. This isn't just another tax update—it's a massive, 900-page piece of legislation with real implications for manufacturers like us. Whether you're thinking about buying equipment, expanding your facility, hiring more people, or selling your business down the road, the OBBB touches nearly every part of the decision-making process.

That's why I called up my friends at CLA—Susan Roberts and Steve Combs—two tax pros who spend every day helping manufacturers figure out what's changing, what's staying the same, and what you need to do now. In this episode, we sort through what's "informational" and what's "actionable"—so you can stop guessing and start planning.

We talk about everything from the return of 100% bonus depreciation, to how you can now expense R&D costs again (finally), to smart moves around entity selection and estate planning. There's even a little salt cap drama in there. If you want to get ahead before year-end—or avoid getting caught off guard—this episode's for you.

Let's get into it and talk about how this "big, beautiful" bill can work for you… not against you.

Segments

• (0:18) Grow your top and bottom-line with CLA
• (1:33) Learn more about Susan Roberts and Steve Combs
• (4:05) What's "informational" vs. "actionable" in the bill
• (7:42) Bonus depreciation is back—100% write-offs retroactive to Jan 19, 2025
• (10:01) How cost segregation studies unlock more depreciation for recent building purchases
• (12:20) Why you shouldn't buy machines just for the deduction
• (13:45) QBI deduction (20%) made permanent (and what that means)
• (17:48) Entity selection: Is it time to consider a C Corp?
• (19:30) R&D can now be fully expensed—unlocking credits, cash flow, and retroactive deductions for everyday shop work
• (27:37) Why you should listen to Buy the Numbers
• (30:17) Interest expense deductions get easier for manufacturers in 2025
• (32:00) Limitations on capitalizing interest into inventory coming in 2026
• (33:21) Individual tax deductions: SALT cap increased from $10K to $40K (with phaseout)
• (38:02) Why PTET (pass-through entity tax) strategies still matter
• (40:39) Advanced manufacturing credit for semiconductors increased from 20% to 35%
• (42:09) Clarifying that buying tax credits is still an option for large C Corps
• (46:55) Estate exemption increased to $15M and indexed for inflation
• (48:02) Opportunity Zone deferral extended—now with rolling 10-year plan
• (50:10) Low-hanging fruit for 2025: R&D recapture, bonus depreciation, cost seg studies
• (53:40) The risk of unintended consequences without a tax advisor
• (55:01) Final verdict: Is the One Big Beautiful Bill actually beautiful for manufacturing?
• (1:01:16) Don't get burned by recruiters who don't understand manufacturing

Resources mentioned on this episode

• CLA's Website
• Susan Roberts - [email protected]
• Steve Combs - [email protected]
• Tax Cuts and Jobs Act
• Manufacturing Grants Made Simple
• Hire MFG Leaders

Connect With MakingChips

• www.MakingChips.com
• On Facebook
• On LinkedIn
• On Instagram
• On Twitter
• On YouTube

I'm halfway through the year and, like many of you, I feel as if it's still February. Orders are steady but not spectacular, and every headline seems designed to keep shop owners awake at night. That's why I invited my friend and financing partner Ty Willis back on Buy the Numbers—because cautious optimism only works if your cash flow can keep up with your ambitions.

Ty funds machine tools every day, from three-spindle startups to $40 million fab shops, so he sees the real score behind the press releases. In this conversation we pull the veil off equipment financing: when to borrow, when to walk away, and how to keep your banker, your line of credit, and your future robots playing nicely together. We also unpack why a "slow-and-steady foundation" beats any shiny new five-axis—unless that five-axis comes with the cash-flow runway to feed it.

You'll hear Ty's three phases of lending wisdom, my own war stories of growing Hill Manufacturing (including a 24-spindle acquisition we're closing in two weeks), and a practical playbook for calling your shot six months before you sign a PO. We even run a lightning round on interest rates, Section 179, and whether the latest "no payments for six months" gimmick is really a deal.

If you're tired of financing offers that treat every shop the same—or tired of hearing "rates are too high, maybe next year"—this episode gives you the numbers, questions, and mindset to finance growth without betting the farm.

You will want to hear this episode if you are interested in...

• (0:00) Ty's "run lean first" mantra and why slow & steady wins the race
• (0:25) Check out Verdant Commercial Capital to gain a partner in your corner
• (1:30) Ty's path from tech to ten years in independent equipment finance
• (4:53) Job shops are softer, DOD/aerospace is humming, and diversification is critical
• (10:09) Using cash flow as the real growth lever; the 24-spindle acquisition example
• (11:49) Ty's three phases of lending maturity (valuing consultative restraint over volume)
• (17:36) Case study: consolidating eight lenders into one partner to free a CFO's week
• (22:33) Automation financing myths—why cobots and AGVs often outlive spindles and deserve funding
• (26:40) Sign up for updates about Modern Machine Shop's Top Shops 2025
• (27:04) Breathing new life into 15-year-old machines with robots, bar feeders, better workholding
• (29:52) Pre-qualification and "calling your shot" before IMTS or FABTECH
• (33:27) South-Dakota-to-Florida move: financing a $500K 5-axis and hidden relocation costs
• (37:41) Chicago fab/machine shop's methodical growth with bargain used five-axis machines
• (41:42) Ty's four-step engagement playbook: 20-minute call, one-page soft-pull app, roadmap, relationship
• (44:19) Lightning round: rates, imperfect books, Section 179 reality, deferred-payment traps
• (55:28) Why you need to listen to the Lights Out podcast

Resources & People Mentioned

• Smart Money Moves: Equipment Financing Tips with Ty Willis, Ep #5
• The Cashflow Advantage: Why the Right Banker Makes All the Difference, Ep #6
• Banking Secrets for Manufacturers: How to Secure the Cash You Need, Ep #12
• Sign up for updates about Modern Machine Shop's Top Shops 2025
• Why we leverage the expertise of CliftonLarsonAllen

Connect with Ty Willis

• Check out Verdant Commercial Capital to gain a partner in your corner
• Verdant Commercial Capital on LinkedIn
• Connect with Ty on LinkedIn

Connect With Buy the Numbers

• Follow on LinkedIn
• Connect with Mike Payne on LinkedIn

Subscribe to Buy the Numbers

on Apple + Spotify

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What happens when a former MLB.com writer ends up leading marketing for one of the most complex machine tool portfolios in the country? You get a masterclass in translating business goals into real marketing ROI.

In this episode of Buy the Numbers, Jon Star—Director of Marketing at Methods Machine Tools—joins us for a conversation about data-driven marketing, building trust with job shops, and how to actually prove your impact in manufacturing.

Jon shares his winding path from sports journalism to enterprise tech to metalworking, revealing how his background in internal communications and executive messaging taught him the metrics that matter.

He explains how marketing can (and should) directly support sales by understanding how the company makes money, building content around that mission, and tracking revenue—not just leads.

We also dive into the real challenges job shops face when trying to diversify into new industries, and how methods like CRM implementation, service-first messaging, and persona-driven marketing help shops target the right customers with confidence.

Whether you're a machine tool distributor, job shop owner, or marketer trying to earn your seat at the executive table, this episode is packed with practical insights.

You will want to hear this episode if you are interested in...

• (0:00) Welcome to Buy the Numbers—Nick finally makes his co-host debut
• (0:46) Stay tuned to learn more about Top Shops 2025!
• (1:54) Jon Star's unexpected journey from baseball writing to industrial marketing
• (8:34) Knowing how your company makes money is the foundation of great marketing
• (12:04) Branded house vs. house of brands explained
• (14:22) Selling to small job shops vs. large enterprises
• (15:50) Why shop owners need to market differently based on business goals
• (17:05) Hill's strategy for diversifying into new industries
• (19:04) How Methods supports diversification through engineering and service
• (22:25) Measuring marketing success and hitting the right customer pain points
• (27:51) Why a focus on service is the best sales strategy
• (29:25) Grow your top and bottom line with CLA
• (30:03) What we've learned from building empathy into our marketing
• (31:37) Jon's first six months: Listening, shadowing, and learning from the field
• (35:05) Internal dashboards vs. "sicko spreadsheets": Jon's tracking habits
• (37:41) Mike's CRM journey—when it's finally time to scale
• (39:00) MQL vs. SQL: What they mean and why they matter
• (46:18) Attribution doesn't have to be perfect—but it has to be useful
• (47:47) Sales, marketing, and product must operate as one flywheel
• (51:45) Why you need to talk to your long-standing customers (and team)
• (56:05) Don't be afraid to start with something basic
• (1:05:35) How ProShop can help you achieve on-time delivery

Resources & People Mentioned

• Marketing that Attracts Work
• Meaghan Ziemba on MakingSparks

Connect with Guest Name

• Connect with Jon on LinkedIn
• [email protected]
• Methods Machine
• Methods on Instagram
• How ProShop can help you achieve on-time delivery

Connect With Buy the Numbers

• Follow on LinkedIn
• Connect with Mike Payne on LinkedIn

Subscribe to Buy the Numbers

on Apple + Spotify

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What if I told you that your accounting function could be your greatest weapon in the fight for better margins, smarter decisions, and stronger growth? Too often, we treat accounting like a chore—just another box to check, another invoice to send. But if you're serious about building a resilient, efficient, and scalable manufacturing business, then it's time to look at accounting as a strategic function.

In this episode, I'm joined by three experts from CLA—Phil Hanke, Mary Strand, and David Mauch—who live and breathe operational accounting for manufacturers. We dig into how small to midsize shops can build better systems, forecast more effectively, and make real-time decisions rooted in good data (not gut feelings).

We're not talking about spreadsheets for the sake of spreadsheets. We're talking about boots-on-the-floor insight, setting up your ERP and accounting tools the right way, and actually using the information you collect to improve margins, reduce waste, and grow confidently. From budgeting basics to cash cycle calculations, this episode is packed with practical takeaways.

If your current financial reporting feels like a black box—or if your books are still being run by a well-meaning family member without formal training—you'll want to lean in. Because accounting isn't just about reconciling the past; it's about owning your future.

You will want to hear this episode if you are interested in...

• (0:00) Mike shares a personal success story about ROI from investing in ProShop ERP
• (0:20) Why I believe you need to invest in ProShop ERP
• (2:25) Introducing guests from CLA and why their work matters to manufacturers
• (5:04) The labor gap isn't just on the floor—it's in accounting and admin roles too
• (8:26) Mary defines "operational accounting" and why it starts on the shop floor
• (12:54) Steel toes and inventory flows: how to diagnose inefficiency at ground level
• (14:53) Budgeting isn't optional—Mary breaks down how to start simple and get real
• (19:11) Why budgeting should be a living, breathing document
• (20:46) Phil walks through how to turn planning into performance KPIs
• (24:32) Gross margin, product-line profitability, and how to use your income statement
• (27:43) Working capital and cash cycles—don't let your AR terms bury your business
• (29:55) Pricing strategy that accounts for your cost of capital
• (33:00) Stay tuned for more information about Top Shops 2025
• (33:25) Frequency of financial monitoring—daily vs. monthly vs. quarterly
• (34:47) Predictive vs. lagging indicators and building a metrics dashboard
• (38:38) David explains how to collect actionable data without fancy tools
• (43:48) Connecting floor-level data to pricing, burden rates, and margins
• (47:22) How 5S and competition drive operator engagement in performance metrics
• (53:03) The danger of underutilizing your ERP or treating QuickBooks like a checkbook
• (56:00) Why financial statements should align with what's happening on your floor
• (58:16) Low-hanging fruit you should focus on now
• (1:01:47) Check out the Machine Shop Mastery podcast

Resources & People Mentioned

• Stay tuned for more information about Top Shops 2025
• Machine Shop Mastery

Connect with Mary, Phil, and David with CLA

• Mary Strand
• Phil Hanke
• David Mauch

Connect With Buy the Numbers

• Follow on LinkedIn
• Connect with Mike Payne on LinkedIn

Subscribe to Buy the Numbers

on Apple + Spotify

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Most golfers obsess over their gear—but almost none of them build it. Jared Doerfler did. After playing college golf and spending years in sales, he found himself pulled back into the game he loved—but this time, through the lens of product creation. With zero machining experience, he quit his job, bought a beginner CNC mill, and decided to manufacture putters himself, from his garage.

In this episode, we dive into how Jared taught himself CAD/CAM, figured out the physics behind great putter design, and slowly carved out a niche in a crowded marketplace. This wasn't a white-label brand with flashy headcovers—it was a soul-first, steel-cut, full-stack operation.

You'll hear how golf gave Jared the idea, how family gave him the work ethic, and how sheer persistence turned that idea into a functioning business. From naming each model after towns tied to his grandfather to prototyping for months just to get the sound right, Jared's approach to design and manufacturing is anything but casual.

Whether you're a golfer, a builder, or someone with a product idea burning in your brain, this episode is a masterclass in starting from zero—with nothing but curiosity, grit, and a love for the game.

You will want to hear this episode if you are interested in...

• (0:15) Stay tuned: Top Shops 2025 registration coming soon!
• (1:09) Jared explains how he transitioned from sales into self-taught CNC work
• (2:52) Jared's family history in manufacturing and how that shaped his path
• (6:34) Discovering a niche product to design and manufacture himself
• (10:05) The decision to make the product in-house vs. outsourcing production
• (12:00) How MAESTRO can simplify inspection in automated processes
• (17:21) Jared explains why he started with a Tormach and how he upgraded
• (19:12) Teaching himself CAD/CAM, the CAM learning curve, and iterative machining
• (24:40) Jared's first putter design and how aesthetics vs. precision played out
• (26:54) Grow your top and bottom line with CliftonLarsonAllen
• (28:32) Naming each putter after towns tied to his grandfather
• (30:53) Going to market: Balancing performance with style
• (35:46) Manufacturing breakdown: 4 ops, soft jaws, materials, and finish choices
• (39:14) Challenges with scale, inventory vs. make-to-order, and a growing scrap pile
• (41:30) Diving into the finishing and the post-machining process
• (44:45) Entrepreneurship talk: bootstrapping, debt vs. investors, and capital priorities
• (46:37) Pricing strategy differences between product businesses and job shops
• (48:35) Advice for aspiring founders and a nod to the massive challenge of job shops
• (54:34) Why you need to subscribe to the Lights Out podcast

Resources & People Mentioned

• Stay tuned: Top Shops 2025 registration coming soon!
• Grow your top and bottom line with CLA
• Toolpath
• CloudNC

Connect with Jared Doerfler

• Hanna Golf
• Connect on LinkedIn
• [email protected]
• Follow on Instagram and Twitter

Connect With Buy the Numbers

• Follow on LinkedIn
• Connect with Mike Payne on LinkedIn

Subscribe to Buy the Numbers

on Apple + Spotify

Audio Production and Show Notes by - PODCAST FAST TRACK

Most of us shop owners tend to keep compensation pretty simple: pay ourselves what the business can afford, pay our team what feels fair, and hope that keeps everyone happy. But I've learned over the years that this approach can quietly hurt the very business we're trying to grow.

In this episode, I sit down with John Jones from Scissortail Executive Advisors to dig into how owner and executive compensation really works—and how getting strategic about it can lead to better retention, stronger tax positioning, and a more valuable business overall.

John and I talk through why it's critical to separate your roles as owner and operator, especially when setting your own salary. We also cover how small shops—yes, even with 10 or 12 employees—can make use of tools like 401(k)s and non-qualified retirement plans. These aren't just for big corporations. There's a ton of flexibility and strategy available here that most folks just don't realize.

I've met a lot of great shop owners who take the bare minimum they need to survive and put everything else back into the business. That's noble, but it's not always the most efficient or rewarding way to structure things. John shares ways to keep your team happy, secure your own financial future, and still make sure the business has what it needs to grow.

If you've never given much thought to how you compensate yourself—or how to build real retention plans for your team—this episode will open your eyes. You'll walk away with practical tools, smarter strategies, and maybe even a little peace of mind.

You will want to hear this episode if you are interested in...

• (0:00) Cold open on non-qualified plan flexibility (humorous examples)
• (0:26) Grow your top and bottom line with CLA
• (1:34) How Mike and John first connected over foster dogs
• (3:09) What John's firm does and who they serve
• (5:21) Splitting owner vs. executive compensation (and why it matters)
• (11:28) Intro to 401(k)s and non-qualified plans as supplemental tools
• (13:27) Deep dive into non-qualified plans: flexibility, vesting, tax savings
• (18:44) Structuring benefits for a 12-person machine shop
• (23:40) Get ready for Top Shops 2025 in Charlotte, NC
• (24:05) Tax advantages of these plans for both owner and business
• (26:43) Discretionary contributions and plan flexibility year-to-year
• (33:09) Risks of non-qualified plans in the event of business failure
• (36:56) Costs and scalability of both 401(k) and non-qualified plans
• (39:40) Other areas owners should consider for employee retention
• (42:48 Phantom stock vs. profit sharing for retention and motivation
• (47:10) Final takeaways: tax planning, recruiting, and valuing employees
• (52:54) Head on over and listen to the Machine Shop Mastery podcast

Resources & People Mentioned

• ERISA Guidelines

Connect with John Jones

• Scissortail Executive Advisors
• Connect on LinkedIn

Connect With Buy the Numbers

• Follow on LinkedIn
• Connect with Mike Payne on LinkedIn

Subscribe to Buy the Numbers

on Apple + Spotify

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Most of us would never machine a part without checking the tolerances first — so why do so many shop owners sign off on financing agreements without understanding the performance "tolerances" our banks are quietly measuring us against?

In this episode of Buy the Numbers, commercial banker Danny O'Keefe returns to break down two terms that sound like dry legal jargon but carry real operational consequences: loan covenants and personal guarantees. If your shop relies on bank financing to grow, these aren't just details — they're the guardrails shaping what we can do, and what could get us in trouble.

Loan covenants aren't just something we sign and forget. They're the metrics banks use to judge whether our business is still a safe bet. From debt service coverage to balance sheet leverage and owner distributions, these numbers can quietly restrict how we grow, how we pay ourselves, and how much flexibility we have in tough times. If we're not checking them ourselves when we close the books, we could be tripping violations without even knowing — and that's a problem our lender won't ignore.

Then there's the personal guarantee — something a lot of us sign with a shrug, not realizing what it really means. We dig into how it works, when it's enforced, and why it's not usually about losing your house — it's about staying accountable and engaged if the business hits rough waters. With real-world examples, Danny explains how guarantees play out in practice, how banks try to resolve issues, and why going dark is the worst move you can make.

The biggest surprise for many: almost everything about your loan is negotiable — including the covenants and guarantees. But only if you understand your balance sheet, your bank's priorities, and how to advocate for yourself. Whether you're taking out your first note or renegotiating a renewal, this episode gives you the tools to treat your financing like a partnership, not a one-and-done transaction.

By the end, you'll walk away with a clearer view of your bank relationship — not just as a source of capital, but as a strategic tool. One that, when managed well, can protect you and your shop… and when ignored, can quietly start to chip away at your freedom to operate.

You will want to hear this episode if you are interested in...

• (0:00) What personal guarantees really mean—and why banks don't want your keys
• (0:29) Achieve on-time delivery with ProShop ERP
• (1:58) Guest reintroduction: Danny's background in commercial lending for shops
• (4:48) Defining the "big scary words": Loan covenants and personal guarantees
• (8:12) How banks evaluate owner distributions and when limits apply
• (9:50) Balance sheet leverage: Why your assets vs. liabilities matter
• (12:53) UCC filings: What they are and why they get overlooked
• (14:37) Proactive vs. reactive reporting: How to stay on your bank's good side
• (23:44) Types of personal guarantees and what really triggers enforcement
• (26:46) Learn how to grow your top and bottom-line with CLA
• (30:24) What happens in worst-case scenarios—and how communication can save you
• (34:14) How outside consultants and investors can step in when banks get nervous
• (40:57) What a strong balance sheet might mean for guarantees
• (46:43) Negotiating your covenants: Why the whole loan is a conversation
• (52:54) The most important things to pay attention to at closing
• (56:35) Why you need to listen to the MakingSparks podcast

Resources & People Mentioned

• Achieve on-time delivery with ProShop ERP
• Banking Secrets for Manufacturers: How to Secure the Cash You Need, Ep #12

Connect with Dan O'Keefe

• Busey Bank
• Connect on LinkedIn

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Audio Production and Show Notes by - PODCAST FAST TRACK