He Bought the Business. Now What?
Introduction:
Last year, Jason Bridwell concluded a five-year search for a business to buy by snatching a 130-year-old custom woodworking company in St. Louis from what he calls the “jaws of liquidation.” The previous owners of Gravois Planing Mill had stopped accepting new orders, were allowing key employees to leave without replacing them, and had picked a date to close the doors for good. But Jason liked what he saw enough to make an offer—and then insisted that the owners hire him to start turning the business around even before the deal closed.
This week, Jason compares notes with Paul Downs, who runs a similar woodworking business but is approaching the other side of the ownership equation: He’s thinking about selling. Jason explains why he bought Gravois, why he now thinks he overpaid, what surprised him about the business—including an accounting system built around a handwritten ledger—and why he had to inject more of his own cash this year to keep it going. Along the way, the two owners discuss what makes a business worth buying, the value of open-book management, and the relative advantages of their very different business models. Paul, it turns out, wouldn’t mind finding a buyer a lot like Jason. The episode is brought to you by Grasshopper Bank.
— Loren Feldman
Guests:
Jason Bridwell is the owner of Gravois Planing Mill.
Paul Downs is CEO of Paul Downs Cabinetmakers.
Producer:
Jess Thoubboron is founder of Blank Word.
Full Episode Transcript:
Loren Feldman:
Welcome, Paul and Jason. Jason, this is your first time joining us, so I want to introduce you. You bought Gravois Planing Mill, a custom woodworking business with a pretty interesting history about a year ago, I think. It’s in St. Louis. It dates back to 1893.
And I met you recently at the Great Game of Business conference, where you were checking out the possibilities of open-book management. We got to talking, and you acknowledged that—I don’t want to put words in your mouth—but you’re still kind of figuring out just what you’d bought with Gravois. Is that fair to say?
Jason Bridwell:
That is correct. Yeah. Thanks, Loren, for having me.
Loren Feldman:
Thank you for joining us. After the conference, I sent you a copy of Paul’s book, Boss Life, because it’s a terrific book, but also because your businesses have a lot in common. Some differences, but a lot in common, and I thought you would get something out of it. You read it, you started listening to the podcast, and you recently heard Paul say that he likes the way his business runs and the way he runs it and that there are some changes he’s just going to leave to the next owner, whoever that might be.
And you pointed out in an email to me that you’re on the other side of that equation. You are that next owner of Gravois, which is why I thought it might be fun to get the two of you together to compare notes of your differing perspectives on running similar businesses. So, that’s why we’re here. How did you start, Jason? How did you come to buy this business?
Jason Bridwell:
Yeah, I started looking for a business to buy probably five years ago. I had always been very interested in being an entrepreneur, being a small business owner. It was something that I had wanted to do for as long as I can remember.
Loren Feldman:
What were you doing?
Jason Bridwell:
So I worked through the corporate world. You know, here in St. Louis, we have a number of large companies, and it feels like I worked at all of them—Anheuser-Busch, Nestle Purina, a few others—and really learned a lot about both operations and strategy. But I knew that I was going to go into entrepreneurship and business ownership, so I started my journey something like five years ago, and looked at a lot of different companies.
How I ended up with Gravois is really interesting. The owners were distant relatives of mine, and I knew that they were selling the company, and I thought I better get over there and check them out before they close the deal, just to get an understanding of their story and how they ran the business. And within the first couple of minutes, they told me the deal fell through, and they were still looking for a buyer. And I knew as soon as I walked through the place and talked to the guys that this was the company for me.
I approached my search really industry agnostic, but I had a set of criteria that I was looking for, and Gravois just met all the criteria. And so I got really excited and made him an offer within about a week. And the negotiations took something like three or four months, and then another three or four months to close, just from fine-tuning some of the different contract points. But I think from the time I walked in to the time I closed was only about six or seven months.
Paul Downs:
What were the top three of those criteria? I’m just curious. What were those?
Jason Bridwell:
It’s really only five. The first one was that I was looking for a company where the owners were retiring. I didn’t want to buy a company where someone was trying to sell their problem. Like if they weren’t at a retirement age, I was a bit more skeptical about why they were trying to sell. And as I was doing my search, that was something that really evolved. I would meet people who were just trying to sell a company. And for whatever reason, I didn’t pursue it. And then after the fact, I found out that they had lost their big clients or the industry was changing, and they knew that this was time to get out, but they were still trying to sell it at a premium.
So I really learned to be much more wary of what sellers were trying to do, and if someone was selling sort of mid-career, it just didn’t feel right to me a lot of times. So someone who was retiring or or looking for a succession plan was one of my first criteria. Another criteria was I was looking for a niche market that had a really high barrier to entry, and Paul, as you know, in the woodworking business, it’s hard to find people to do the work. And it’s hard to come across, basically, a shop that’s already built.
People just don’t open up a large manufacturing millwork company. It’s something that takes a lot of time to get there. I was excited that I was finding something that was already in place that was really hard for someone to repeat. The fourth thing I was looking for was, of course, a profitable company. And the fifth one is I was looking for a company that needed a lot of updates because I knew I could buy it at a discount and then sort of put in my own sweat equity to add value to the company.
Paul Downs:
It’s a good list. But you were not specifically necessarily manufacturing. It would be anything that fit those criteria?
Jason Bridwell:
Yeah.
Paul Downs:
And have you had any experience with manufacturing before?
Jason Bridwell:
I worked for a number of manufacturing companies. I worked for Anheuser-Busch, and I was in the supply chain space that did a lot with production, but I wasn’t necessarily in the production area.
Paul Downs:
Have you personally ever built anything with your hands?
Jason Bridwell:
I did, but not for a career.
Paul Downs:
Okay.
Jason Bridwell:
Yeah, I come from a family of carpenters, and I have built additions to houses. I’ve built decks. I’ve built shelves.
Paul Downs:
Oh, that’s good.
Jason Bridwell:
I have always been mechanically inclined, in that regard. So that part doesn’t scare me. I think what is kind of scary, though, is when I’m next to someone who’s been doing custom woodworking for 20 years, and I pull out the tape measure, and you know, the very skilled eye is watching me, making sure I get the right measurement.
Paul Downs:
So, does this have anything in common with how Anheuser-Busch manufactures?
Jason Bridwell:
No, I mean, no. And really, the biggest thing is the difference between someone like Anheuser-Busch or Nestle Purina, where they’re making the same bag of dog food over and over again 365 days a year, we’ll make a desk once and then never make that desk again. We’ll make ceiling panels once and never make them again. So, in the custom world—Paul, you know—even though every table is close to the same, every table is different, and you never know what you’re going to find when you start building something that’s a custom, one-time event.
Paul Downs:
Yeah, that’s it.
Loren Feldman:
Jason, can you give us some idea how big the company was when you bought it?
Jason Bridwell:
So when I bought Gravois Planing Mill, their best year was about $3.7 million, and they had, when I bought the place, I think 14 people. Now one of the things that they were going through was they couldn’t find a buyer for the company for a long time, and I think Covid had a lot to do with that. But I think there were a lot of other factors as well. So that 14 people probably should have been more like 18 or 20 people. They let a lot of people go and never bothered replacing them.
Paul Downs:
How many people did they have in their best year? When was that?
Jason Bridwell:
I don’t know how many people they had exactly, but they were probably at 18 to 20 people, and they were running between $3 million and $3.6 million, probably. That $3.7 million is where they topped out. So I would say for probably 2012 to 2019, that’s where they were hitting. And then Covid did its thing to everybody, and they came back and they had a good 2024 at about $3.7 million.
Paul Downs:
And that was with 14 people. Were they doing significant buy-sell, like selling windows, where they were just buying something and marking it up and selling it?
Jason Bridwell:
Not really, and the 14 people was really 2025. They really started letting people go, or I should say, not replacing people between that 2024 and 2025 space. They weren’t doing that much buyouts. That’s what I would call it—you know, like buying a window and then marking it up and selling. That’s not really what they do. They don’t have that kind of model, or I should say, we don’t have that kind of model.
Paul Downs:
The reason I ask is because there’s a fairly easy calculation to do on any business, which is your sales divided by the number of full-time employees, and then you get a number. And 20 people to do $3.7 million would put you at 180 or something, $180,000, per head, which is pretty typical for a lot of woodworking operations, a lot of small custom manufacturing operations.
Loren Feldman:
Where are you on that, Paul?
Paul Downs:
Right now, we’re running about 220 ahead, but this is a very good year. It’s been up and down. Two years ago, it was 190 ahead. And it doesn’t tell you everything about a business, but it’s a starting point for: Are you bringing in enough money to pay people a reasonable amount of money? That’s the first thing it tells you. But the second thing would be, when you say sales: $3.7 million, are you measuring the value of contracts or the value of product delivered? Because those are two different things.
Jason Bridwell:
Product delivered.
Paul Downs:
Okay. Well, then, yeah, it sounds like they’re a fairly typical small woodworking operation.
Loren Feldman:
Jason, they checked your box, in terms of being profitable, I understand. Did you have a sense that this was a business that had real problems, and that’s why they were struggling to find a buyer? Or what were you seeing?
Jason Bridwell:
That’s a really good question. I think they tried to sell, and that coincided with the start of Covid. But I think they probably should have sold or started shopping this thing around, probably, 2010. There were two brothers who were the owners, a majority owner and a minority owner. And the majority owner, he retired probably in 2010, 2012, something like that. And the minority brother, he stayed on, but he was only working part time, and he retired, and they brought his son in to run the company.
The son ends up leaving, forcing his dad to come back and work, and they really didn’t have any leadership at all. I don’t know why they held on to it for as long as they did, why they didn’t try to shop it around. I just don’t know that answer. But by the time they decided to try and sell—2019-2020—I don’t think anybody was buying any companies in 2020 to ‘23. And then when you’re looking at somebody’s financials after Covid, I just think people were shy of trying to buy this company. And they just had a hard time. They had offers, and none of the offers were where they wanted them to be. I don’t know if they were necessarily lowball offers. I think the old owners had a high opinion of what they should get for their company, and they were rejecting pretty much every offer that came along.
Paul Downs:
Are you willing to share what you paid for it?
Jason Bridwell:
Yeah, it was just over a million dollars. It was $1.1 million, and I know they had offers in the $600,000 to $700,000 range. And they were with people who were in the business, or they were general contractors who were looking to add on a woodworking shop. There was one company that only wanted their name and their backlog, so that was a really low offer. I came in as a company that was going to buy the whole thing. A lot of their offers were piecemeal offers. They just want the backlog. They just want the name. They just want the employees. Whatever the case may be, I don’t think anybody else came to them and said, “I’ll take it all.”
Paul Downs:
Did your offer include the real estate?
Jason Bridwell:
It did not.
Paul Downs:
Okay, so you’re paying those guys rent for that building.
Jason Bridwell:
I am. Yes.
Paul Downs:
Okay. It implies that the amount of profit, depending on how you value this, would be in the $300,000 range a year. Does that make sense?
Jason Bridwell:
They were doing better than that when I bought the place.
Paul Downs:
What was the average age on the shop floor? Gray hair?
Jason Bridwell:
No, we had a pretty good range. We still do have a pretty good range. We have some guys who are pretty young. We have some guys who have been here 20 years. I don’t think really on the shop floor anyone’s close to leaving. Not for another—I mean, if they stay with me—not for another five to 10 years.
Paul Downs:
Okay. How old was the equipment?
Jason Bridwell:
The CNC was pretty new. I think the CNC is only about five years old. There’s some pretty old stuff that we have here. We have a pretty old moulder. The panel saw is nearing the end of its life. Those are the three big pieces of equipment that we run. Our finishing department is pretty good, and I’ve made some upgrades throughout. The hand tools, those are fine. I’m not too worried about those. So between the hand tools, those three machines, our finishing department, those cover most of the machines that we run. I’m not worried about some of the saws like the rip saws and stuff. Those will run forever.
Loren Feldman:
Jason, now that you’ve been there more than a year, do you feel like you paid the right price?
Jason Bridwell:
I think I overpaid. I overpaid a little bit. I think the equipment wasn’t as good of a shape as I thought it was. I’m a little surprised by the panel saw. That’s been giving us a lot of issues, and the expenses, especially health-care expenses—what I budgeted when I was going to buy the company versus what my actuals are—are quite a bit different. And I don’t know if my issue was due diligence or just the nature of expenses and pricing going up, materials and healthcare and so on.
Loren Feldman:
We can tell you it’s going up for everybody.
Jason Bridwell:
Yeah, so I was pretty far off on some of my expense estimates, and then as I mentioned, I have more people now than they did, and we do have higher sales. You know, we’re probably 15 percent higher this year than they were in their best year.
Paul Downs:
Sorry, you’re going to do like four and a half million in the next year?
Jason Bridwell:
Yeah, about that.
Paul Downs:
And how many people now?
Jason Bridwell:
24.
Paul Downs:
Yeah, that’s about right. Yeah, still in the same ratio, more or less.
Jason Bridwell:
One of the good things, though, that I’m doing is we’re building the team now for a bigger year next year. And our backlog is already over $3 million. You know, the backlog when I bought the place was barely $2 million. So we’re filling out our pipeline really well, and the team I’m building up. The reason I have 24 people is because I do plan on growing. And we are booking more orders, and we’re showing growth in 2026.
We had a really bad first part of the year. I mean, it was really, really bad, and I can talk about that later. But the first half of our year was awful. There are months in the second half of the year that are 80-90 percent higher than the average in the first six months.
Loren Feldman:
Did you do something?
Jason Bridwell:
Yeah, we did a lot of stuff. So one of the things was the old owners basically let it be known that they were going to close up shop. They were liquidating. They’re not taking any more orders, and the edict was: No new no new orders. And that took us a long time to overcome.
Paul, you know, some of these projects that you get, the lead time could be 12 months before you start producing and before you start getting any invoicing. So it took us seven, eight months to get over that and to get people to trust us—that we’re not going anywhere, that we’re still here, that we’re still in business, and we’re still producing the same high-quality products that we’ve always done.
Paul Downs:
So you service a local market.
Jason Bridwell:
Yeah, we’re trying to become more regional. We do work outside of St. Louis. We’ll do work in Illinois, Indiana, and then in sort of the outer parts of Missouri, like Springfield, Jefferson City, those sorts of places. So we’ll deliver within three, four hours of St. Louis. That’s not a problem, but it’s not consistent. We do most of our work in St. Louis.
Paul Downs:
And you don’t do any installs yourself. You’re shipping cabinets or trim, too.
Jason Bridwell:
Yes, absolutely right. We do not do any installs. Our biggest clients are the general contractors.
Paul Downs:
Residential or commercial?
Jason Bridwell:
We’re nearly 100 percent commercial. We’re probably 95 percent commercial.
Paul Downs:
Any surprises with how they’re paying you?
Jason Bridwell:
We do really well. There aren’t that many of us architectural woodworking shops in St. Louis.
Paul Downs:
Ah, that’s a good thing.
Jason Bridwell:
Yes, exactly. And the GCs, they take care of us. We don’t have many GCs that owe us beyond the 30 days. Usually, you know, 30 to 45 days, we’re getting paid.
Paul Downs:
That’s great.
Loren Feldman:
Are you mostly working for repeat customers, the GCs?
Jason Bridwell:
Yes.
Loren Feldman:
So you’re not spending a lot of money on marketing.
Jason Bridwell:
No, we’re not. You know, that’s one of the funny things. One of the things that the old ownership didn’t do any of was any kind of advertising. One of the first things I did was, I upgraded our website and basically wanted to announce to the world that we are still here, and I really needed to overcome that, “Oh, these guys are shutting down.”
The website that they had was like 25-30 years old, and one of the employees built it over a weekend. And I said, “We’ve got to change that.” So I did invest in some marketing for a new website, not only to announce that: Yeah, we’re still here; announce that we’re under new ownership; announce that we do high-quality work; but also to help attract employees to come here. I didn’t think I was going to be able to attract people with the kind of website that they had that was put together in the ’90s and that looked like it was put together in the ’90s.
Paul Downs:
Yeah, that’s always a sign of somebody who’s about to go out. Your website looks very good. It looks nice.
Jason Bridwell:
Thank you.
Paul Downs:
It doesn’t really emphasize that you’re mostly commercial, though. And if you can avoid getting into residential, I’d probably recommend that, because the selling is very, very different. Although there’s residential GCs, which are fine, but you want to stay away from homeowners if you can possibly avoid it.
Jason Bridwell:
Before I even took over, I thought, “This is an untapped market. We’ve got to get into residential also.” And the vice president of the company, who’s the lead estimator, he’s like, “I’m telling you, you don’t want to do that. It’s not what we do, and we don’t do it for a reason.” So when I was getting the website put together, I was like, “No, we’re going to lean into this. We’re going to see how this goes.”
And so a year later, like I said, we haven’t done much in residential, and there’s an excellent reason why, Paul. You pretty much hit the nail on the head. When you’re dealing with a commercial project, let’s say a half-million-dollar project, you’ve got the same number of headaches as you do for a residential project that’s only $10,000. And if you’ve got to do 20 of those, well, you’re never going to get anywhere. So it’s better to just take one really big headache, rather than a whole bunch of small headaches.
Paul Downs:
It’s much more difficult dealing with people who are spending their own money on things. And if you’re doing commercial, I mean, we do business-to-business, so the people we deal with usually either have so much money they don’t care, or they’re spending somebody else’s money, and that just makes life a lot easier.
Loren Feldman:
All of this gets at the biggest difference between your business models. You both do custom woodworking, but Paul, you’re much more specialized. You did go through that process—I think you’ve told the story here. It was primarily because of Google that you wound up specializing in making custom conference tables. Is that correct?
Paul Downs:
That’s correct. And it’s been nothing but a blessing to be really specialized in a thing that people want. And the number of people who can do it drops every year. That’s a nice place to be. But there’s different kinds of specializations. So we specialize in a thing, but we serve a very wide geographical market. Whereas Jason’s really specializing in a place, and bringing a skill-set to a place that doesn’t have any choices for that. I know a lot of companies that are very similar to his, but they’re just not in a position to service his market, and he’s not in a position to serve their market. So it’s a different kind of specialization.
Loren Feldman:
Well, he also has an advantage that you don’t have, in that it’s much more likely that he can sell to repeat customers than it is for you, correct?
Paul Downs:
Well, we’re working on that, and we’re shifting our business. It’s now about 30 percent repeat, and most of that is the federal government. And so, that’s something that we’ve been working on for a long time, and I think is a huge win for us because the federal government will never run out of money.
Loren Feldman:
Jason, you read Paul’s book and you heard what he just said. Does developing more of a specialty seem at all enticing to you?
Jason Bridwell:
Well, Paul is correct. It’s hard for me to sell in, say, Seattle or Miami. There’s too many times you have to go on site, do field measurements, and then you’ve got to deliver everything. And we might be delivering a whole truckload, but that truckload gets done over the course of two months, so that turns into—you know, our local customers, we might make 10 shipments just because they can’t take everything all at once, and we can’t deliver it all at once. So it becomes cost prohibitive to service people too far away. So, as he said, we are specialized, but our specialty comes from there aren’t that many people who do what we do in the region, and it’s really hard to be anything more than a regional player.
Paul Downs:
What does your competition look like? Are they also shops where the ownership is aging out?
Jason Bridwell:
Yeah, in fact, I know one of them just sold about a month ago, about the same size as us. Another one is transitioning to the next generation. A third one was one of them that tried to buy this company and essentially build up through acquisition that commercial side of things.
Paul Downs:
Do you ever talk to those people?
Jason Bridwell:
In fact, when the one that just sold about two months ago, I actually reached out to the broker—the agent who was selling the company or representing them—and signed the NDA and did the whole thing and looked at the company. Because I’m always interested, even though we weren’t necessarily in a position to make a move. And it really wouldn’t have been a good strategic fit, because I would just be buying their customers. There wouldn’t be much value there, I don’t think.
Yeah, I did talk to them. I did take a look. And then there was another guy who’s up a little further north, kind of the same thing. So I’ve probably talked to four different folks in our space just in the past 12 months. I’ve actually visited a few of them just because we’re trying to keep an open and warm and positive relationship amongst us here.
Paul Downs:
I think that’s a good thing. You know, you’re competing in one way, but just having peers is one of the things that I didn’t have when I wrote the book. And I’ve since made much more of an effort to reach out to people who are either in the same business in different places, or doing a similar business near me. And we’ve actually just recently formed a group of three companies that’s just ownership teams getting together to talk about issues, and none of us are direct competitors, but we’re all woodworkers.
Jason Bridwell:
There are times when somebody falls behind, and they need to reach out to another business to help them out and get them out of that bind. And the year before I bought Gravois, Gravois was subcontracting out some of the work to some of their competitors. They had a really, really big project, a $2 million project, and you know the owners were pretty much absent. There wasn’t a lot of leadership here. So they did reach out, and they partnered with some of the other shops around town to help them get through it. Yeah, there’s a lot of value in having positive relationships with all the guys in the space here.
Loren Feldman:
Talking about relationships, you inherited a crew, and that must have brought some interesting challenges, I suspect. What was it like, walking in, taking over, and introducing yourself as the new owner?
Jason Bridwell:
That part of it was easy. The really challenging part for us was they were letting people go, and they weren’t doing anything to stop it. And once we came to an agreement that I was going to buy the place—but before we signed any legal documents—I told them they’ve got to hire me so I could turn this company around now. I can’t wait four months to make this happen. And I didn’t know it was going to be four months, but I told them I can’t wait for it to happen.
So they hired me, and I started hiring people to kind of—well, I came in and I said, “Look, there’s going to be new ownership. We’re going after business. There’s no reason to leave.” So one of my very first orders of business was to get people to stop leaving, and then my next order of business was to replace the people who did leave. And one of the first people I brought in as a key person, the foreman. They didn’t have a foreman. They really didn’t have any leadership at all. People were just kind of gliding on. They just knew they had to do this work, and they were doing the work.
Paul Downs:
So, is anybody in the office? There was nobody managing flow production?
Jason Bridwell:
So, the vice president was the head of estimating. They vaulted him into basically the position of, “You’re now running the shop. You’re running everything.” And yeah, he was burning the candle at both ends, and I’m surprised he stayed on, but he did.
Paul Downs:
Is he still with you now?
Jason Bridwell:
He still is. He’s got the longest tenure of anyone here. He’s been here 40 years. He’s a minority partner with me, and he is one of the main reasons why we’re doing as well as we are right now. He’s got more contacts in this city with these general contractors than anybody I’ve ever met. He wasn’t ready to retire, and he wasn’t ready to give up on Gravois, so he and I talked, and we agreed that we can do this together.
Paul Downs:
Do you think you could have succeeded without him?
Jason Bridwell:
No, I don’t think I could have. I don’t.
Paul Downs:
I’m curious. You worked in the big corporate world for a long time. So, what ideas did you bring to your new company that turned out to be inappropriate, and which ones were a revelation to them and were actually helpful?
Jason Bridwell:
I love that question. The old owners, their mantra was, “Well, if I have more money at the end of this month than I did at the beginning of this month, I must be doing all right.” And it felt like there was just a lot of a wing-and-a-prayer kind of a thing. They were succeeding, but I don’t think they really had any forecasting or any plan on what their success was going to look like.
So I’ve been bringing in a lot of forecasting, a lot of modeling for what our contribution margins should be, planning out what our spend is going to be on, say, capital projects, that sort of thing. I think a lot of that stuff was absent, and I don’t think it was absent because they had checked out. I just think that their style of leadership was just more from the ’80s and the ’90s, and I don’t think they evolved into the 21st century thinking of how to run a business.
Paul Downs:
What about culturally? Was there anything about the workforce that—could you have taken all those people and slotted them onto the shop floor at Anheuser-Busch, or was there something different about them?
Jason Bridwell:
I was very fortunate, in that the culture here was, is, very good. Paul, I know you know woodworkers. I don’t know if there’s a group of people who take more pride in their work than woodworkers. It’s often slow and meticulous and exacting, and that’s the kind of crew that I have. That’s the kind of crew that I bought on the woodworking side.
I did have to let a couple people go on the office side. They just weren’t working out. But I was bringing in a very different style of management to run a business than they were used to, and they just weren’t going to work out. And I was okay with that, but I’m glad I didn’t have to change anything on the woodworking side, because their work ethic is impeccable.
Paul Downs:
Yeah, that’s been my experience, that the craftsmen are craftsmen. That’s why they’re doing it. They’re not doing it for money, because it usually is much lower paid than the other trades. But the chance to work in a shop and understand your tools and do good work is a big motivator for a lot of people.
Loren Feldman:
Could we go back for a moment to your getting hired by the people you bought the company from? I’ve never heard of a situation precisely like that, where a company is taking bids, and one of the bidders says, “You know, I can’t wait. You’ve got to hire me right now.” How did they respond to that? Did they pay you a salary? Did they give you a budget to limit how much of their money you were spending to hire people? How did that work?
Jason Bridwell:
Their agent even said, “He’s never seen this before. No one’s ever done this before.” But you don’t find many companies that are being sold, basically snatched from the jaws of liquidation, that’s not because of a bankruptcy, right? They just chose a date, and they said, “We’re tired of running this company. We’re done.”
And I said, “Well, somebody’s got to run the company, so you’ve got to make it me, because I’m buying it, right? I’m not going to buy this company if you’re not going to put effort into running it.” And they kind of made it clear that they weren’t going to do anything about that. They weren’t going to run the company. They were checked out.
Paul Downs:
What was the role you were hired for, gGeneral manager?
Jason Bridwell:
I didn’t really have a title, but I told them I needed to hire people, and I needed to stop everybody from leaving, and I needed to—well, I figured the best way for me to learn the company is to just be here and start doing this stuff, right? They didn’t want to call me a president, because that gave me too much authority. So I think I just came in as, I don’t know, consultant or something like that. I can’t remember what.
But they gave me the authority to put job postings out there, interview people, and then say, “This is the person I want to hire.” They would do the official hiring, but I was negotiating the salary, that sort of thing, because I knew I was going to inherit that salary, and we agreed that that was the only way that this was going to work out. If they hadn’t done that, I would have walked away from the deal, and it just wouldn’t have happened.
Paul Downs:
So, did you have access to the bank accounts just to see how much cash was on hand?
Jason Bridwell:
I mean, I knew it just through due diligence and having the NDA. I knew what they had because they had shared it all with me when I started looking at the company to buy it. But I didn’t have any access to their accounts or anything like that. The only thing I had access to was—well, I’ll take a step back. The company that I bought, they didn’t have an ERP system. They didn’t have an accounting system. They didn’t have an estimating system. They were doing almost everything by hand.
The owner said, “Jason, I want you to come in. I’ll train you on what I do.” And I show up and I walk into his office, and he has a ledger, an accounting ledger book, open on his desk. And I thought he was playing a trick on me. I thought, “Wow, I didn’t think he was funny. He’s gonna play a joke on me.” And I said, “What are you doing, Jim?” And he goes, “I’m looking for a payment I made to a vendor.” I said, “Well, why don’t you just look it up in your computer?” And he says, “I don’t use a computer.” So there wasn’t an opportunity for me to take anything that they had because it was all just—I don’t know what else to say. They really didn’t have a system that I can hack into and take information from.
Paul Downs:
I feel bad for you, because that’s probably a pretty good reason why all the other offers were so lowball. Because you don’t actually know what’s going on. I’m curious if—again, if you’re willing to answer this question—so you’re running a $4 million business. What do you consider to be a decent amount of cash to have on hand, at any given moment? Where do you like to be?
Jason Bridwell:
I’d like to be at half a million dollars.
Paul Downs:
That’s pretty reasonable. Yeah, that’s a comfortable amount.
Jason Bridwell:
Yeah, this is a cash-heavy business, as you know, Paul. We’re making purchases $80,000- $90,000 at a time for lumber, right? And you might not see that for 60 days or something after you invoice them. And then, payroll, etc., etc., all the things. So yeah, there are ups and downs. Half a million dollars is really a good comfort point. In fact, that was actually some really good advice that I got from the old owners.
And I’m kind of making fun of the old owners. They were really good at what they did. They just did it in a way that was foreign to me, that was like 30 years foreign to me. And I’m trying to modernize this company from a lot of different directions. And one of them is just my accounting, my finance, my estimating, and my forecasting. Those are the things that I’m really focused on right now is to modernize those four things. But yeah, they did give me good advice: You better keep this much cash on hand, or if you don’t have it on hand, you have access to it. And it has rung true several times in the first 15 months that I owned the place.
Paul Downs:
Have you established a line of credit with a local bank?
Jason Bridwell:
I have an SBA loan, and I’m having a hard time getting a line of credit.
Paul Downs:
And the loan was just to purchase the business.
Jason Bridwell:
It was to purchase the business, but I did get some working capital in the loan. And I brought enough cash to the table to where I was at or over that half million dollars when we first started. We had a really rough first six to seven months, so I did burn through a lot of cash, but like I said, our sales are a lot better the second half of this year than they were the first half. So we’re building that back up again.
Paul Downs:
Yeah, I was just going to ask you, how did you get through six months of bad sales?
Jason Bridwell:
I had to bring in outside—well, I mean, I had to bring in my own cash, but I injected owners’ equity.
Paul Downs:
Yep, that’s how it goes. [Laughter]
Loren Feldman:
Jason, I’m still really intrigued by your getting hired by the business you later went on to buy. I’m just curious, when you were bringing in people that you wanted to hire and taking them to the owners and saying, “This is who I want to hire and this is what I want to pay them,” did that go smoothly? Did they reject people? How did that work?
Jason Bridwell:
They didn’t reject anybody, but they thought I was crazy on some of them, and you know, not everybody worked out. There was one guy they told me, if I could hire this person back—he was a really talented, key person, and he left the company when they were talking about liquidating—they said if I could hire him back, it’d be the best move I can make. And I was able to bring him back about eight months later, and that truly was the best thing that has happened to me. He’s been fantastic. He’s our director of operations, director of production, and bringing him back has really turned around our operations. We were really struggling.
I’ve had two foremen since I’ve started. So my first foreman I hired before I bought the place, and he was a bit of a desperate hire. I knew we were really hurting, because we didn’t have any leadership, and the first person who came along who I thought was qualified enough, I brought him on. You know, engineering degree, Berkeley. I mean, he had the pedigree. He just didn’t fit well with us, and he left.
I brought in another guy who was running a shop, but he was running a shop that was much, much smaller, and he couldn’t scale to our size. So I’ve been struggling with that management role. And right now we don’t have a foreman, but the director of production that I brought back, he has stepped into that role, and he’s done the role before, and he’s really improving the processes and fixing the mistakes and the challenges that we had leading up to it.
Paul Downs:
You absolutely need somebody on the shop floor who can just juggle everything. I’ve got a guy like that.
Jason Bridwell:
Yeah, and so we have a guy who’s been one of our senior bench hands. We’ve elevated him to the title of senior bench hand, and he has become the go-to guy on the shop floor for questions, especially with the younger crew that we have, to help train them, show them how to do what we do.
So I’ll go back to what you were talking about earlier, Loren. You said you’re just surprised that the old owners would bring me on. So hiring the foreman was one of the first things. The funny thing is they told me that some of the people who we had, they would have gotten rid of them a long time ago, and they never did. And they kind of left that up to me to do. And I didn’t do that until after I took over, because it really wasn’t my place. So I knew I wasn’t going to overstep my bounds and have that kind of impact with the employees. I knew that I needed to hire people, but my job wasn’t to dismiss anybody.
Loren Feldman:
What would have happened if you had decided to walk away during that process? They would have hired these people that you wanted to have hired, and just, I guess, liquidate?
Jason Bridwell:
Yeah, they would have just told them along with everybody else, “We’re closing the doors. Don’t show up on Monday.”
Loren Feldman:
One of the reasons we’re here talking is because you listened to the podcast [episode] that Paul had, where another business owner was encouraging him to inject AI into his operation. And that’s what led Paul to say no, he likes the way he’s running his business. He thinks it works fine now. And no doubt that will happen one day, but the next owner can worry about that. Are you thinking about AI at all?
Jason Bridwell:
Yeah, we are. I know that there are estimating tools out there that leverage AI. I don’t think anybody trusts it 100 percent right now, but I know it’s on the horizon. And I think there’s some good products out there that are using real world data to improve every day. So we’re not building it. We’re not using it right now for those major processes.
We’re using it for small things like research, that sort of thing. But for these major work streams—estimating, drawing, that sort of thing—we know that technology and specifically AI is going to enhance the work that we do. We’re waiting for, basically, the industry to catch up and give us something that works. We’re not going to be afraid of it, but we’re not going to be early adopters on it.
Paul Downs:
What about on the shop floor?
Jason Bridwell:
I don’t know. You guys would have to help me understand how AI would help the shop floor. I don’t know.
Paul Downs:
You just made the correct assessment. [Laughter]
Jason Bridwell:
I don’t see it.
Paul Downs:
It doesn’t lend itself to what’s actually happening on a woodworking shop floor. Now, Loren, since we had the conversation, just in the last few weeks, a couple of my guys have been working on a version of AI and incorporating it into our design process and into our modeling process that we use for selling, and using tools that have been started to be built into some of our programs, and then using Claude to write scripts for those programs. And we’re having some interesting success with it. So, I don’t think there’s no place for AI in our future. I personally am not doing it, but somebody in my company is doing it. We all agree that it has no place on the shop floor. But in terms of any kind of digital process, yeah, there’s ways to deploy it.
Loren Feldman:
Jason, it sounds like you’ve had some interesting challenges, but in many ways, you’re off to a really good start. What’s your goal? Do you want to run this business for the rest of your life? Do you want to flip it and make a profit? What are your plans?
Jason Bridwell:
I would love to run it for another 15 years or so. I’ve been looking at a lot of companies over, whatever, the last five years—companies that were for sale—and a lot of them had no succession plan. And they were just like, “Shoot, I guess I just got to sell this thing.” I don’t want to be in that position. So I would say, after I got my arms around this company, I started thinking about my succession plan. And if I get big enough, I think an ESOP would be an option I would investigate. I think selling the company would be an option, but I’m not in it for the short-term. I’m not in it to just pump up the value and dump it. I really want to see this company grow.
And part of why I wanted to be an entrepreneur was to do that myself, to say, “I’ve built this company from X to X plus 100,” right? And that’s really what’s driving why I’m doing it. I love the woodworking piece of it, and I think I got very fortunate when I came into my search industry agnostic, and I landed in this woodworking space. I love this space because, like we were talking [about] earlier, you’re working with craftsmen who are so exacting and are passionate about what they do, and I just want to bring it to the business side. I’m really passionate about running this business and seeing it grow, and seeing us be able to deliver high-quality custom woodwork to people more outside the St. Louis area. I don’t want to sound like a commercial, but that’s how I feel.
Paul Downs:
Was there anything you wanted to ask me, Jason?
Jason Bridwell:
Yeah, Paul, only like a million things, because I loved your reading your book. But are you looking to sell? Or what’s your goal?
Paul Downs:
Well, I am. I’m looking to sell it to somebody, and the two basic options are: sell to an internal group, and or take it to market, hoping that somebody like you out there might have a larger amount of money than the guys who work for me now. Because I would not want to pass up the possibility of just a bigger payoff for myself, frankly. I mean, when I sell this company, it’s going to be the realization of the most potential I have to earn anything. I worked on it for 40 years. I think I’ve done a good job of building something remarkable, and I’m not sure what the actual range of offers might be. But I would be doing myself and my family a disservice if I didn’t look into it.
So there’s people in the shop who are qualified to buy and run it, although they would not have a ton of money to pay for it. But there may well be somebody outside who has the same desire to enter a world where doing things right is valued and working with people who are great to work with because they are craftsmen, and dealing with clients who understand what good work looks like. I think that we’re something that’s very attractive. So, I’m going to explore both options, and at the end of the day, I’ll take the one that I feel is best for myself and my company but not just neglecting myself. Does that make sense?
Jason Bridwell:
Yeah, it does. Just from seeing it, I would encourage you to do it sooner rather than later, because I think selling a business takes a lot longer than anybody realizes.
Paul Downs:
Well, the only problem with selling it to an outside team is that they’d probably want me to leave. I still like coming to work.
Jason Bridwell:
You know what’s funny? When I was looking for a company, one of the things that was always in the back of my mind—although it wasn’t necessarily in my top five criteria—was: Can I step in with no experience and run this company? The owners that I bought it from, I asked them if they had ever done any woodworking, and they said, “I never spent any time on a shop floor. That wasn’t my job. I ran the company.” And when I was looking for a company, I didn’t want to buy a job. I wanted to buy a company. I think your pool of potential buyers shrinks if the person buying your company has to do the job itself and also run the company. So I don’t know how your organization—
Paul Downs:
No, I’m way beyond that. I don’t go out on the shop floor. I mean, I go on the shop floor a couple times a day. It’s just to sort of marvel at what’s going on because, yes, the company could easily run without me here. It’s just that, you know, I like coming here. It’s cool. So it’s not because I’m grasping at every task that I could possibly have my hands on and trying to own it all and keep it, hoard it, to prevent anybody else from doing the cool stuff.
Now, the company does great work, and if I go on vacation, it still does great work. And I think that the values that we’ve developed together will make it easy for them to continue to do great work if the ownership team recognizes what they’re getting, as opposed to assuming that there’s a million things that need to be fixed. There’s probably always a few things that need to be fixed in any business, but we’re basically doing pretty well at what we do.
Jason Bridwell:
So, I was thinking about that podcast episode that you had, Loren—You just devalued your company—and I’m like, “Well, I’ve got to listen to that one.” And that’s when the guy said, “Well, you devalued your company because you’re going to make somebody else do it.” I want to ask the other question, Paul, and that’s: What are you doing now to add value to your company?
Paul Downs:
Well, I’m not standing in the way of the people in the company who are thinking about how to take our systems into the future. And the other thing I’m doing is just making sure we’re still open, because I just strongly disagree with the statement that I just devalued the company. I just think that’s flat out wrong. What it doesn’t take into account is that, if you know how to do a thing that is going to still be needed X number of years in the future, and the number of other people who know how to do the thing gets smaller every single day, all you’ve got to do is wait. And so that’s kind of where we are. We know how to do a particular thing, and it’s in demand. Demand’s not going away. It’s not something that you can bootstrap your way into.
Like, you own a woodworking shop with a bunch of craftsmen in it, but in order for you to take yourself from what you’re doing now to what we’re doing would be pretty much impossible. I’ll just tell you that, technically, what we do is far different. It cannot be bootstrapped. We were fortunate to be put into this niche at a time when the desire to buy the thing the way we sell it was just being developed and the old supply chain was falling apart. And so we were able to grow our capacity and our capabilities over the last quarter century right along as the market developed. And it would be really hard to jump out of that train today and get to where we are.
So, all I have to do personally is kind of make sure we stay on track culturally, that everybody in the company understands that what’s valuable is craftsmanship, and what makes craftsmanship is human beings. And it can be enhanced with technology, and we don’t want to be ignoring the ways it can be enhanced, but we don’t want to replace craftsmanship with technology, because you can’t really do that in our product. Is that a good answer? That’s sort of how I feel about it.
Jason Bridwell:
I think when you started off by saying you’re not standing in the way of letting people progress and grow your company, rather than one person trying to grow their company, get your whole company growing the company, I agree with you.
Loren Feldman:
Jason, was it that notion of getting everybody in the business working on building the business that took you to the Great Game Conference where we met?
Jason Bridwell:
Yeah, absolutely. I bought a company where the ownership style was, “You’re doing it this way because I said you’re doing it this way.” It was a very dictatorship kind of style. And I know in the Great Game of Business, it’s everyone is an owner in what they’re doing, and they can make decisions, because you want to put the decisions where it’s going to be the most impactful. If the bench hand knows, “This is a better router to use for this job,” well, don’t have the boss telling him what router to use. Let that person choose what router to use.
This company, they had a leader—if you remember the two owners, one of them, his son came in to run the company. And I’ve had conversations with him. He’s a smart guy, a sharp guy. He brought ideas forward to say, “We could modernize this way, we can improve this way,” and every single one of them was categorically shot down because they just didn’t want to do it. And eventually, he just got fed up and left. And that’s when they said, “Well, we’ve got to find someone to buy this company then, because he’s not going to run it.”
So, Paul, when you said you’re not standing in the way, I think that does add a lot of value. And I think this company could have been more valuable if they had stayed out of their leader’s way and let him do things that I’m now doing. So I’m adding value that could have been added 5-10, years ago, that would have put more money in their pocket when they came to sell it.
Paul Downs:
Well, good for you. It sounds like we’re both brilliant.
Loren Feldman:
Jason, I think you might be interested to know that Paul has introduced his version of open-book management.
Jason Bridwell:
You even talked about that in your book. Every Monday, I think, you would have your meeting.
Paul Downs:
No, no, I still get up there every Monday, and I give them about a dozen numbers that make sense, and having that report every week is the most important thing. That’s consistent, so you can see where the numbers are going, and we talk about the trends, and that’s part of what I show them. It’s like, “Here’s where we were last week, here’s where we were the week before. The numbers are moving. What does it mean?” And I just tell them what’s going on.
And I’ve heard from my employees that they really appreciate that. A lot of people who’ve come from other companies are like, “Wow, this is awesome. Nobody ever did this for us.” And so it makes it easier to manage the shop, and it means that you’ve got a happy workforce. And a happy workplace is a good place to go every day, and that’s part of the reason why I’m not necessarily dying to stop working here, because I really enjoy it.
Loren Feldman:
Paul, some owners are reluctant to do that because they fear that if the business hits a downturn, that it’s going to scare the employees and they’re going to rush for the exit. You’ve been through both good and bad times. Was being open about the numbers an advantage or a problem for you when you hit a rough patch?
Paul Downs:
Well, I’ve done it both ways, and I think that rough patches with honesty and trust are way better than rough patches where the owner is trying to conceal what’s going on. Now, I experienced that leading into the first recession, and that was very very difficult and unpleasant for everybody.
Loren Feldman:
The first recession? You mean the Great Recession?
Paul Downs:
2008. And then in recent times, if we hit a rough patch, I was very candid with everybody. And what I found is that there weren’t defections. It was remarkable to me how many people stuck around and were willing to take some sacrifice themselves. I’ve cut people’s pay on several occasions and said, “Hey, I’ve got to cut everybody’s pay or we’re going to run out of money, and then we’re all going home. You don’t want that, so give me some time. And this is how we’re going to do it, and this is how much money we’re saving, and it will give us these additional weeks, months, to sort this out.” And then as things turned themselves around, as they did, I gave them regular updates, and I found that it just made everything easier.
It became, instead of them against me, it was all of us against the situation. And there hasn’t been anything about that experience that made me want to do it any differently. And I don’t look back and say, “Oh, I should have done something differently. Being candid, telling people what the horizon looks like to you on a regular basis, I think those are two things that a leader can do that are extremely effective at engendering loyalty.
Loren Feldman:
That sounds great.
Jason Bridwell:
Your weekly update is inspiring me.
Loren Feldman:
Well, we certainly had plenty to talk about. My thanks to Jason Bridwell and Paul Downs, and a special thanks to our sponsor, Grasshopper Bank. Thanks for listening, everyone.
