-
David Heacock’s grandfather founded a machinery company in Alabama.
-
His father told him not to work in the family business, so he became a trader.
-
He transformed the company’s core business and increased revenue.
This article is based on David HickokCEO Filter to buy. It has been edited for length and clarity.
I swore I would never get involved in the family business. My grandfather started a machinery company in Talladega, Alabama, which was a local success and employed about 150 people. Growing up, our family was a big fish in a small pond.
Behind the scenes, there was friction within the business. My grandfather resigned, leaving my father, uncle and aunt to run the business. Since everyone holds a minority stake, there is a lot of debate over decisions. Even when two people agree, the other person often feels hurt.
This affects everything from whether to invest in new machinery to what cars company owners drive. Never distant, but tense. My grandfather’s presence ultimately brought the company and family together – no one wanted to let him down.
My father encouraged me to work outside the family business. After college, I landed my dream job at Goldman Sachs. I was making $55,000 and budgeted every penny, even the nickel I gave to panhandlers. This drives my now wife crazy, but it means I can save money, even living in New York.
At the end of the first year, I received my bonus: $70,000. I was absolutely shocked. This is a surreal amount of money. I saved it and allowed myself to be a little looser with my budget.
Within about six years, I was running a trading desk in New York, making $2 million a year. This is an incredible amount of money for me and my parents.
However, I began to question this work. I realized I was just a hedge fund bettor. I think automation will take over this job. When I was 29, I asked myself if I wanted to continue doing this when I was 40. The answer was a resounding “no”, so I left.
At that time, my father, uncle, and aunt were all preparing to retire. They were in talks with a private equity firm to buy the business, but my grandfather wasn’t happy about it. He wants the company to stay in family hands.
My grandfather wanted me to buy this company and I was looking for something different than trading. I wasn’t sure what I would do with the company, but I agreed to buy it for about $2 million.
I started flying from New York to Alabama weekly, Monday through Thursday. I had dinner with my grandfather almost every night. He understands business in a unique way like no other. I owned the business for three years before he passed away, and our discussions about it became a very special final moment in his life.
The company, Talladega Machinery Supply Co., was essentially a wholesale business. It relies on long-term relationships with the company’s salespeople, but they are all approaching retirement age. I know this is unsustainable.
I researched various business options and decided to go into the air filter business and renamed the company Filterbuy. There is no connection to the original business, but there are good opportunities for growth. When I talked to my grandfather about it, he understood immediately.
For the first seven years of my business, I paid myself a salary of $40,000. I spent most of my previous income on that, including putting my wife through medical school and investing in real estate. A large portion of my net worth is business related. Fortunately, this has paid off. Last year, the company’s revenue was about $255 million. Today, our business is very healthy.
My goal is to grow the company big enough to go public. I don’t necessarily want my three daughters to run a business together and experience the same mistakes and friction that my dad and his siblings did.
Although Filterbuy is very different from Talladega Machinery and Supply Co., our mission remains the same: to make a positive impact on our customers, communities and families. My grandfather used his company as a vehicle for charity and even helped build a local hospital. He would be very proud that the family business now has 400 employees in Talladega and 862 across the country.
I’m happy to carry on his legacy.
Read the original article on Business Insider