It’s Not a Circuit-Board Business. It’s an Asset

hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week special guest Carla tropman explains step by step how she has managed to navigate both the challenges and the opportunities that only a family business can offer Carla grew up around a manufacturing business electrosoft that her father started but she never intended to make a career of it instead she found success in Corporate America but over time she also came to real ized the true wealth building power of owning a business any business it's not a beauty salon she says it's an asset it's not a Sho Shine store it's an asset that realization sent her back to electrosoft which thrilled her father they agreed to work together for 3 years after which he would retire and she would buy the business and that's pretty much what happened although as Carla tells us thanks to some family dynamics that had to be negotiated the transition didn't take 3 years it took 11 years even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations will let owners know they are not alone in facing challenges in fact that's the whole idea behind the 21 hats Community engaging with other owners to get the kinds of insights only another business owner can offer if you're interested in learning more step one is to sign up for the Morning Report newsletter which highlights the most important news of the day for business owners so you don't have to go looking for it step two is to get on our slack Channel where you can ask questions get vendor recommendations and tap the wisdom of a very impressive crowd just search for the 21 hats Morning Report to sign up for a free trial joining me this week on the podcast is Carla tropman CEO of electrosoft an electrical manufacturing business based outside of Philadelphia the episode is titled it's not a circuit board business it's an asset welcome Carla our special guest today it's great to have you here I think we all know that family businesses can be a little crazy but they're kind of all crazy in their own way you've written a terrific book about your family's slightly different brand of crazy I don't mean anything insulting by that again I think family businesses are that way very true your book is called Dark dirty dangerous building the vibrant future of manufacturing first I'd like to ask you why did you decide to to write the book well um obviously having a family business it sometimes can feel like you are the only person in the world going through something crazy and I didn't know a lot of people that are people of color that owned businesses and what makes that unique why I mentioned people of color is because um we tend to have networks but our networks aren't those that are within the entrepreneurship circles and um so we've tend to feel very alone and people of color are one of the fastest growing demographics starting businesses and I really wanted to be helpful one part of me also was very attuned to the fact that the black wealth Gap was ever widening and Entrepreneurship is one of the best ways to create generational wealth so with my seat at table my experience I wanted that to be almost a gift to the community but also you know the selfish part of it in a sense is I really wanted to build Authority for electrosoft so it was two things I wanted to do something good the altruistic side of it but I was really still growing the business and when the opportunity came to write something uh that was an authority piece in manufacturing I I jumped at the opportunity you mentioned in the book that black family businesses tend not to transition from one generation to the next I think that's kind of true in general family businesses do you think it's even harder for black family businesses absolutely I mean you just look at the numbers around um access to Capital it wasn't that my parents just handed me the business I had to actually go and obtain a loan and um buy them out and part of that process was even though I had years of experience assets and money I still couldn't get everything that I needed in order to secure the business um and we had to use some other creative ways to do it so access is definitely one of the things and the other is the education around it you think you have to have exactly the amount of money in your pocket that it costs to buy a business and it it doesn't work that way but the other part that I see is that you know mom may have a beauty salon or um some business that you're not interested in because they' did that in order to send you off to college and have a great career and you almost feel as if like I don't want to run a beauty salon sure the educational piece of it is that we've not taught one another that it's not a beauty salon it's an asset it's not a shoe shine stor it's an asset and how do we then put somebody in place to run it generate income so that we're not just working for paycheck but we have um a combined source of income from both the business and pursuing the career that we love let's take a step back to tell us what did electrosoft do when your father started it and and when was that my father started electrosoft in 1986 he has um degrees in electrical engineering and math also in computer science so he was in a field of doing instrumentation writing software for blood analyzing equipment in in a corporate um setting and they decided to get rid of the entire instrumentation Division and um while he was figuring out what to do someone reached out said hey you know anybody that can build cables and he said sure I you know I'm not doing anything trying to figure out my next step so he then built the cables on the kitchen table um and the guy loved him and asked for more and he got one of the women that was laid off that worked under him and they both made cables on the kitchen table um and the rest as they say is history because honestly he wasn't trying to start a business in manufacturing how did it go from the kitchen table to a real company with employees and customers so uh well electrosoft is uh an Electronics contract manufacturer so we don't have a product we sell our time and expertise to companies that are interested in Outsourcing their manufacturing or they've had a surge in orders and they need that type of support and these companies tend to uh maintain stateside manuf facturing they're not making cell phones or anything like that it's mostly a high mix lower volume so doing a benchtop Electronics you know we're doing on the kitchen table then to move to the garage because my mom wanted the kitchen back and then being in Pennsylvania uninsulated garages tend to be cold in the winter we wound up going to an incubator space and there was a couple of hops and each year my dad didn't think that um he was going to stick with it because they really weren't making any money money until I guess the end of the third year they started making money and I mean this is after taking a second mortgage on the house to see if it was going to work um and I think once you take money out of the bank and take that mortgage out you really do you want to make sure it works and risk the house yes exactly they bet on themselves when they started making money they really knew that they had something there but honestly there's no pictures of the earlier days of electri soft because we didn't think was going to be around and did you grow up in the business did you work in it when you were a kid I did as a young child um I was about 10 when they started and I would cut wire with wire cutters and a ruler and just measure out the different colored wires that were needed for the assemblies where I would help my dad when he was running printed circuit boards through a wave soldering machine and catch them on the other side and and so I know how to do all of those things but I was still conditioned to go to school and get a degree and go and have a career there was never any pressure to work in the family business and quite frankly I didn't think you could make money in small business I didn't think that there was any money in small business I thought you had in order to live well you had to get a corporate job so it was a little bit of a miscommunication in schools whereas uh now everybody knows that entrepreneurship can be a lucrative d direction to head did you think that because your uh father was struggling with the business or because he didn't really share with you that it was doing better than you thought uh I think all of those things my most of the people that we knew that had businesses because at that point my father's network of entrepreneurs started to grow and everyone really lived below their means they weren't flashy spending a lot of money or had big homes or anything like that so I don't think thinking like good Lord these people are really struggling here and so we tend to equate those visual cues to bank accounts as opposed to really talking about what the numbers are I mean my parents were never flashy individuals in the first place I mean we were living off of my mom's salary while my dad was building the business so that was just the way we lived and I always thought we didn't have much but they were putting everything into the business as their investment so for me I mean I think that's the unfortunate thing about school at that time it felt like school was like a pipeline for Corporate America you did go into Corporate America tell us uh what you did yeah so my um undergraduate degree is in business Logistics and I worked for retailers such as Ikea Gap um a company that honey well ultimately purchased and um was doing supply chain Logistics and I liked the career I like the travel and I did what I thought I was supposed to be doing you wound up uh I believe uh starting your own eCommerce business at some point what prompted that well I think all of that was part of a divine intervention when I was traveling and working I had gotten married we had our first child and I was having a very difficult pregnancy and at the time you couldn't nobody really talked online about these things like there was no real Facebook presents you couldn't buy everything you wanted off of Amazon so e-commerce was just starting out um and I decided like hey I need to find products so I used my degree in logistics to identify products around the country around the world that women who were having difficult pregnancies were utilizing and a lot of these products weren't readily available because they were lacking in distribution a lot of them were mompreneurs that were home and they made a couple of products and they figured out really beautiful packaging but weren't widely available and there was no huge network uh to distribute them so I was one night on online um on a discussion board yeah lamenting about pregnancy and um I was the go-to woman that knew all the products to help women and I couldn't answer all the questions so I created this online store for women to go to and buy while I was doing my Logistics job during the day and a lot of the women would do the shipping of the product so people come on they would pay and then I would tell the ladies where to ship the product and pay them and it was basically drop shipment which I knew very well in logistics and but during that time I had to learn search engine optimization inbound marketing what blogging was about how to really freshen up your content and keyword research and things that are just everybody seems to know now but at the time was really new about how to quote unquote fake the Google algorithm and um so I was really self-taught in and working with other mom bloggers to really understand the landscape and it helped my business have a worldwide clientele I had done a gifting suite for the Golden Globes I had celebrity clients and it was growing really rapidly I also had um I was doing spots on local television because of that type of a reach and I realized at one point because I then had my second child because I started the company while I was on maternity leave and I was at work and I realized like I should be helping my family because Legacy started to have a new meaning so I should be helping my family by taking all this knowledge as the internet was changing the way marketing was being done and we the industrial sector of manufacturing had not yet made that turn did you ever give up your corporate job and do the e-commerce full-time no no I didn't it was just wasn't like I still felt that I needed to be in Corporate America I had these great benefits and I traveled and I liked Logistics I like doing that work and then as my kids got older I just wasn't really interested in the baby piece of it anymore I was like I don't want to see anything related to pregnancy or children ever again um my interest changed were you able to sell that business or did you just shut it down no I shut it down like honestly Lauren that's again a learning curve of well it's like well who do I sell it to like I didn't know you could go to business broker to have it sold I thought you just you know shut the lights off and roll the carpets and call it a day especially on an e-commerce site and then I just wasn't interested in it anymore so it was definitely a lost opportunity so it sounds like working uh in the corporate world didn't completely turn you off um there were aspects of it that you clearly enjoyed what got you thinking about going to work in the family business again I it was making my own money from my website I realized hey these small businesses are actually bringing in some good money and that working in corporate wasn't the only way to have um to be successful and the more I looked into small business and started talking to people I realized that there's so much opportunity it's just depends on the level in which your business is operating so my family's business was always a lifestyle business they loved it not being so much so high impact that it was causing them sleepless nights they were able to handle all the expenses it was great staff my father could take as many vacations as he wanted um and so he ran it just like a lifestyle business it was not was not really trying to grow it um and when I saw this so this is also around the time where of companies were looking to drisk out of Asia um and bring the supply chain closer to home and they just weren't really sure because we're talking back in the 60s 70s when everyone went overseas to take advantage of cheap labor that all the manufacturing jobs had left the US so that's why people now that manufacturing is hot again want to bring their products back over but it's really hard to ramp back up when for so long companies were overseas so now there's a shift and I saw that shift starting to happen and that's really what caused me to think differently about just a new challenge could you define for me what you mean by the term lifestyle business because I think I understand what you're saying but I think that term sometimes is used in a demeaning way that you know to sort of suggest that people aren't serious about running the business and I don't think that's what you mean no no you know obviously in the beginning you want your business to be highly successful and um my father had got grown a business from the kitchen table so he was at the point where and we have to also remember like this is a man who when he was in high school who's you was talented in math and science was told the only thing you can do is either be a teacher or go into the military so he's very much a self-taught person and the fact that he had created a multi-million dollar company and paid off everything that he ever owed money to he didn't have this like additional drive to make it some multinational corporation he had created an entity that but it wasn't a hobby either he obviously it was not a hobby he made money he made good money right he just knew that the amount of work required to take you to the next level you just really wasn't willing to do um and didn't want to because he had reached a level of success that he just had never seen for himself and I think that that's okay I think that's a lot of companies especially because most companies don't make a million dollars I mean most companies are making $100,000 if that so the fact that he was doing well for himself and H had a full staff and could hire friends and their children it was a good place for him that's where he saw himself and I think sometimes we get wrapped up in the imagery of Entrepreneurship where you're constantly pitching and you got decks and you're talking like you know barely sleeping and traveling the world that's not like the real deal for most companies most companies are not living like that they a lot of businesses are lifestyle businesses and it isn't until they get um infusion of cash through like private equity and they're trying to go public that things take a a harried approach was your father thrilled when you started to express interest in coming into the business absolutely he was he was going to sell the company until I expressed interest how close did he come was he actually looking around for a potential buyer well manufacturing is is very much in demand um for a lot of buyers I think I get a at least an offer suggestion every week um from someone who's interested in buying us that's a nice thing yeah it's great and he had built a company that he didn't have to be at all the time so he had put all the systems in place so he could have gotten a high multiple if he did decide to sell but he really did want to keep it in the family that said uh as I read in your book your transition I believe lasted 11 years do I have that right that's so embarrassing but yeah it did tell us about that so I mean when you whenever you deal with um succession planning what the previous generation is looking at is their own mortality they're thinking for some reason that like you don't want me around anymore you're you're sending me out to the pastor and it's really not the case it's just that um you know that I was ready for myself to move in to that role I had left my corporate career to do it and I was at that age of being over 40 which is makes it a little bit more difficult to find a position that will be able to meet your lifestyle needs and the level of success that you're at without it being Troublesome so it was just a pivotal moment for me in in life and with the promise of three years I was fine with three years but when after that three the promise of the transition was It was supposed to take three years correct that was the first thing so I said father so Dad I want to take over the company he's like oh that's great I want to retire in 3 years I like okay I can do three years work together and three years came and went and then I said hey it's three years he's like what's three years I your retirement has come is it is time and he's like uh yeah I need three more years I'm like okay that's fine and so that went on until you know I I started to have come to the realization that he's going to drag this thing on forever so I started uh doing a lot of research about family business transitions and one of the books that I had come across was hug your customers by Jack Mitchell and in that book you talked about having family meetings and I said oh that's great we'll start to have family meetings and that way you can see what it would be like if I worked with my brothers and we can get everyone on the same page and I also had reached out to a company that was used to transitioning family businesses I actually knew the office managing partner and asked him to come in and help us and we did a third-party assessment of myself and my brothers to see who would be most Prime for leadership if we should go and all three run the business like how it was going to work out just to kind of push him along give him a little bit of nudge and he just really was um he kept throwing the brakes on at every Point uh but it was important that I'd picked somebody that managing partner was somebody I knew could go toe-to-toe with my dad because he's former military I knew he could walk right over anybody and almost bully them but I knew that this gentleman was not to be bullied so that was really helpful during that time period and then I also realized that my dad wasn't going to just one day say I dubb the CEO I had to show him and be CEO so I just started making CEO decisions and really taking over the direction in which I wanted the company to head because he wasn't really even there anyway after a while he was spending a lot of time on the golf course which he should and really enjoying life which I wanted him to but I also was ready to move forward um so that whole time period took 11 years had you been doing okay in the day-to-day obviously it's one thing when he's not there but you still have to be agreed on the general direction you're headed did that go relatively smoothly oh yeah he didn't care he he I mean it wasn't like I said you know we're now going to make um you know cleaning fluid was just directionally as far as structure of the company um contracts we would go after you know it was all great business moves we very very rarely disagreed on any any decision by the way that sound is my production if you can hear it in the back but we it was a it was a great relationship and I think to this day we still have a very much it's kind of a professional relationship in the sense that like we rely upon one another I ask I still ask him for advice about the business he asked me my thoughts on different things and it's built on neutral respect what do you think kept him from letting go then if he wasn't there that much and you agreed on the important stuff why did it take 11 years I think because folks now see that when people stop working they tend to fall apart and lose uh have a lack of purpose and then they pass on I think he just didn't want that for himself even though he's very active and he's very healthy as well that for him he just said I'm not ready and you know this is mine this is my thing I started I'm not ready to leave and you see that a lot and they're not willing to almost in a way that my dad when he did transition was like okay here's the business don't touch anything just like you know put it in neutral and let it coast and that's not I said no that's not how we're going to do this um but again the respect level and at during the time of that 11 years I also went back to school and got my MBA not that it taught me how to run a business at all but what it did take me through was a lot of um case studies and um really helped me think about how I wanted to grow the company if we just wanted to do that slow of creative growth or wanted to do acquisitions so during that time period we had done an acquisition which was something we had never done before you instigated that I did I did and it went well it did he had said to me before we went in to the final meeting how confident are you in this purchase I said 5050 he's like what do you mean 5050 like well we spent more money on Dumber things I think that you know this will probably work out and that was my level of confidence because I had seen people buy companies um and they didn't have a deal team and it worked out and then I've seen companies that were way bigger than ours that had an entire deal team had investment bankers and that thing could not work no matter what they did so I really felt that we had done really great due diligence in that whole process it was me and our CPA and um the things that we were able to salvage out of that company still makes us money to this day your transition was also complicated because of your brothers I believe they're two younger brothers yes and what role they might play can you tell us how that sorted out yeah all three of us did work for my family and um we three different education levels my one brother's three years younger the other's 10 years younger and um it was just a different level we all had three different levels of dedication and for me even when I was young um my dad always said to me don't go into business with anyone who has nothing to offer so every time I would be in a position where someone wanted to work together do something together I always thought about that don't go into business with somebody who has nothing to offer so I started to look at my brothers as potential business partners not just my brothers and when I assessed that piece and after the independent assessment that the transition team had done I realized that I did not want to work with them I loved them but um part of buying your family business is that you get independently assessed on all of your assets all the asset base was coming from me and when it came to doing a deal with the bank they want everyone's resumee well my resume was the only one that really could stand up as someone who was primed and ready to take over a business and what I had said to my dad was you said don't go into business with somebody has nothing to offer it looks as if I would be doing everything putting up all of the risk and writing a check back for 66% of the net proceeds that doesn't sound like a good deal to me 66% because the three of you would own each own a third yes correct and and I say that because oftentimes with family businesses they want to split everything evenly and even if they didn't do that um you know if they said oh well you can have 50% and they can split 50 between the two of them and still to me it's like it still doesn't the math just wasn't mathing for me and it wasn't that I wanted to take over everything I just really wanted it to be fair to me as well and and I never take a deal for anything that I would hate myself for that's always been my philosophy and um my dad thought about it and he he like you know what you're absolutely right did you say that right away or did it take him a while to reach that it took him a while because obviously he had to think about it and then that's where the transition team was great because this is not the first time they've heard something like this sure and they said fair and equal are two different things right so you can be fair and it doesn't have to be split equally in the way that you think you can make it fair by giving assets from a different asset class so whereas I had to go to the bank and put up all my assets and I'm working right now in what would be deemed as a quote unquote inheritance and paying the bank off my brothers will ultimately receive a check as part of the their piece of what I ultimately ended up paying for my inheritance when you were figuring all of this out did you have this difficult conversation with your brothers I did how'd that go I've always been a straight shooter I've never I tried not to be mean about it and you know I think that's the benefit of also having a f those family meetings because a lot of things came up during those meetings like one of the questions I asked was what is happiness to you like what does the future look like for you and it was never a future painted with this company in mind to them I believe and from talking to them it's like they felt like it was a sense of Duty and I said I've never felt a sense of Duty I could have left and done whatever I wanted to do but for them they've always felt drawn to it um because they felt they had to be there which is unfortunate too with a lot of people that have family businesses they feel like they have to be there and so they've tailored their lives according to that as opposed to really living the lives that they wanted to live and I was determined to never do that um and that was just my own personal mindset I know with my one brother in particular I think he felt a little bit more free from having this burden because for me I said you should do what you want to do and not have to have this as a thing so he works here kind of like freelances part-time so he's able to pursue other things that he's interested in oh that's great and the other brother did it work out with him as well ultimately it did not work out and sometimes you have to ask people to no longer be there and it took a little bit of it was a healing process but I ultimately I hope and we've not really talked much about it but I was just very very honest I brought my dad in he to really have a conversation of why I I had to do the things that I needed to do and I still really you know I love him I love both of my brothers it just wasn't sometimes you make decisions for the benefit of the business and not the benefit of the family so that's the hairy part of family business it's hard but it sounds like it basically worked out for you yeah I mean you got to be the person that makes the hard decisions and it's never you know I let a lot of things linger for a long time and I think it caused this the culture of the company to suffer and then it also caused the employees and the management team to think that there were s cows in the company and there there really wasn't I don't I think I was trying to honor my parents more so than maintain sacred cows and when it came down to when it came down to it I needed to make sure that the company was okay so you you as you said your father didn't just du you CEO you had to buy the business from him uh and get a big loan to do that how did that go um well you know how anything would go I was scared to death having all this money this is the biggest loan I ever had and also it happened in January 2020 so Weeks Later the entire country the world shut down um and my husband and I had um bought our forever home so it was like a double whammy for me and you had a mortgage on that home too correct correct so yeah there a lot more fear because of the covid situation and you know it's not like you know a downturn in the market right this is like you know some you can wait out a downturn you can wait out some like you know economic indicators telling you things but this was something like we didn't know was like was it the end of the world nobody knew and I I spent a lot of sleepless nights and I was doing the sleepless nights by myself my dad like oh it'll be fine and I think that when you've been in business for over 30 years you've seen a lot of things but I said you know all due respect that you've never seen a worldwide pandemic um in in your 30 years so that was um that was scary so thankfully at the time Banks were a lot more lenient and they were say like oh you cannot pay us for three months but we'll still charge you you'll still acrew interest but you don't have to pay yeah for three months um so all I could see is accumulating debt and I didn't want to let my employees go at the time because we looked at our employees as families because they had families as well they had bills but a lot of and that was one of the things at the time that I really started to understand the differentiation between what small family businesses are able to do versus large public corporations with corporate boards on one side if you look at the data large corporate entities tend to look more shortterm so when you compare them to us they make the really solid numbers in the short run they're able to meet um the market expectation shareholder value those are the things that they're looking at but when you look at the longterm family businesses are able to make decisions looking farther ahead in the Horizon so they tend to care more about the people they'll take the short-run hit in order to take care of their people and that's what we did I mean and knowing those things was really helpful for me because I'm like am I being a Fool by not letting these people go am I being too sentimental but no like we have always been a company that took care of our people we're under 50 so we do a lot of things that we would be mandated to do if we were over 50 employees we cover 60% of their healthare insurance we pay 100% of their dental insurance so we do a lot of things because it's the right thing to do by people and in turn most of the people that are here have been here for a long time and they've they are very um dedicated to electrosoft can you kind of give us a snapshot of where the company stood in January of 2020 when you took it over how big it was and what kind of work it was doing the 2020 we were around 26 employees I think 27 employees because of the nature of our work we always have had a lot of the same customers or similar customers so our top 10 or so are consistent um base but then we also have companies that kind of like float out for a couple of years and then float back in so they may try doing something Outsourcing to Mexico to do a Nearshore or try to go over to China and then they're like oh that didn't work and they come back and then someone else comes in and says oh you should go to Mexico and they go okay well we tried that then they do it again so that it's like a cyclical for us during 2020 we still had the contracts but it started to dry up a lot a lot of the work we had um people that were mothers had to be home for their children the ones that had kindergarteners had to sit there at the computer with them and we couldn't really bring them in because we're a light manufacturing facility so that was difficult um trying to figure out how that was going to work and um we did take a slight dip in 21 because people were still unsure about and we just started going back outside in 2021 so then since then every year since we've been 20% year-over-year growth by maintaining still a smaller Workforce around 30 employees um because we've really worked on systems um a lot of integration of systems and really trying to put things with a a stronger process so that they could run more efficiently so everything is about about being as efficient as we can with the number of people that we have but I would love to hire more people that's also been an issue just in manufacturing in general so this year has been all about creating employee pipelines with Partners who um are doing some pre-apprenticeship training for manufacturing I assume you were able to get a PPP loan or maybe uh an idle loan as well I'm curious just because you already you started with a considerable amount of debt uh how did that go for you um honestly and it all worked out you know um a lot of prayer and managing our debt as much as possible so even though we had material during covid in that time period we were able to negotiate our customers paying for the material as far as people we did take advantage of car's act and whatnot even though I didn't pay the bank for one month right after I realized I didn't want to acrw that interest just and not pay we've just picked everything back up I I have not ever been aers with anyone and I think part of that too is that cash flow I always knew that cash flow was the blood of a business and that's just good business practice being able to really understand my financial documents has been very helpful my um Board of advisors that I created in um 2021 was amazing uh well I created it December 20121 they kicked off um in the first quarter of 2022 and that was one of the best decisions I ever made we never had an Advisory Board and then I brought on a fractional CFO to help us make better decisions around money so yes I had a lot of money out in the street but and thankfully you know PPP and then the employee retention credit that ultimately when they changed the rules and allowed you to utilize that was extremely helpful do you pay people to be on the board I do but it's basically any nothing that would change their lives and how often do you meet we meet quarterly um so the board I went to I'm part of um ernston Young's entrepreneurial um ecosystem I was in their inaugural class of the entrepreneurs Access Network that program is for Black and Latino and Hispanic businesses because they've had entrepreneur of the year then they created um entrepreneurial winning women and then they did this third program that was just kicking off in 2021 while I was at their strategic growth Forum which is their um annual Gathering of that entrepreneurial ecosystem and where they announced their National entrepreneur of the Year winner I met a woman named phis new house and she's an absolutely incredible woman she is the first black woman to bring a company public via Spa so she didn't do the traditional IP route she did a special purpose acquisition Corp and raised like $200 million in like two weeks over Zoom during covid and within 89 days rang the bell of this and her company went public she's like a force she was at the conference I had the opportunity to sit with her and she's like you need an Advisory Board gave me the pieces that I needed I put the board together and by um really at looking oh I read a book too um about boards I I have a CEO coach that I started with in 2019 leading into taking over the business and the book that she gave me really broke down the different types of boards like the difference between an Advisory Board and a fiduciary board so I knew had an idea of what a board was what happened is when Phyllis and I sat down she's like these are the players you need on your board so how long will it take for you to do this I said oh I I'll I'll work on for first quarter she's like you have 90 days and I definitely didn't want to let Phyllis down I created that board in 90 days I right sized all the players there was five roles and they were all a little bit of blind spots for me and um we met I had the financials I mean it was I was very nervous I didn't know what a board meeting would look like but what it did was I had people who who were seasoned Executives giving me the opportunity to see my business on in different angles in ways that I just never saw it one of the beauties of a board is that you get to really tell your story to people and have them buy into your your the future that you want for the company people can say no obviously but if you if they are really engaged with what you're trying to do and in my instance the story was that I had taken over my family business I've never met anyone that looked like us as far as being a family of color in electronics manufacturing a black family because of that a lot of people come to us inspired to be in stem we've allowed a lot of um young people to come and work with us over the summer who have gone off to be amazing Executives and engineers and some that stayed and worked with us and that we just really want to be um part of another strong American story about manufacturing and that I saw tremendous growth for the company and if people like you and they want to be a part of that story being paid is like the least of their concerns especially the two gentlemen that I have that were tremendous and they both have exited their careers and they're just enjoying retirement or semi- repurpose lives um doing other things and they want to help and when you have people that really want you to help and succeed those meetings are absolutely amazing I had a gentleman on my board who had a successful exit from his company he's had multiple companies so he had his final exit and he's really able to think about how to have um strong multiples of iida what is the product that you're having how do you create value in your business um and those are things that you don't have just sitting behind your desk or reading one book look here and there or taking a class it's really surrounding yourselves around strong professionals so what do you see as the the future for electrosoft do you still think of it as a lifestyle business I have this vision of um the not just electrosoft but an entity that is owned by Me by the family business that is doing um at least 100 million do now we're far from that but I will tell you that putting that out in the atmosphere and really taking steps to create joint ventures and mergers which is what we're working toward it allows me to really think bigger than just being able to pay the bills or meet the demands of the quarter it helps me really visualize who are the players that we need on the electrosoft team in order to get there how much funding will we need how will be able to access that capital and it has me asking more questions and getting me closer to that Target and it's actually really energized me in a sense it feels like a a new purpose especially because I know how meaningful it is to be a woman in the field that I'm in there aren't very many especially as owners and um I really look forward to being a uh a strong example so that more women will manufacturing I've over the years talked to a number of entrepreneurs who have set similar goals actually hundred million doll is a pretty common one that you hear and a number of them are are today pretty open about the fact that that was a mistake for them that they were too focused on a round number and it got them in trouble they did things that they were sorry they ended up doing have you thought that through do you worry about at all oh yeah I always worry about every decision being the wrong decision as far as the $100 million goal I try to only do things that make sense for us as far as having the team that I have um with the Advisory Board uh the other networks that I'm a part of with the um ey ecosystem I have alignment with the goal in which I'm trying to head I say $100 million because that's that's almost like The Guiding star the goal really is to expand the footprint of the company 100 million would be great I more than 100 million would be great I think that if you have the endurance for it I think also if you have the right people and the right team to get you there I don't see it as something that we wouldn't hit quite honestly can you give us some sense of where you are now well I'll say this right now I can't really give much but I'm in the process of working on a project that will get us there faster than I thought what I mean is that um we're expanding in different areas of the country where um manufacturing is is a lot stronger and not that it's not strong here but right now there's a focus Point focal point on it and there's a need for electronics manufacturers and it doesn't exist so we'll be filling a need a current need that will help roft get to its goal will that require you to take on um Partners investment dollars yes are you fully comfortable with that um I am because it won't be electrosoft taking on that it will stand as its own entity but electrosoft will grow in the process well it electrosoft will be underneath a body of other businesses I'll be able to take business from these entities and funnel it to electrosoft in order to help electrosoft grow as well it'll be part of its own ecosystem and you'll retain full control of your business yes electrosoft will always be owned by me have you started to think at all about what the next transition would be and how you will handle it when perhaps your kids are or not interested in the business absolutely so you know even though I speak in vague terms one of the things I do know is that I probably will not be the one running electri soft um that there'll be somebody in my place that's able to steer it in the direction in which we're headed and why do you say that why would you make that choice because I think one part about being an entrepreneur that I've learned is to be able to actually enjoy life and be able to focus in on the other projects that we're working on I can't do that just running electrosoft um and I think that I always think about am I the best person to be running it and I think there will be a time where somebody else needs to step in to take it to the next level so that I can focus in on the other projects and so I think about that also for my children even though they're 16 and 18 that there's different time periods where they can't run the company like at this point if something were to happen to me and what happens then so we would have to hire a president anyway to run the business that we would have to have a board that has fiduciary duty to the business and to be able to help advise them in their decisions and and know what's going on with their business so I I think about that all the time um because right now with 16 and 18 there not much they can really do is it important to you that your kids have the option of taking over and running the business if they so choose yes I would love to give them the option but I also want to give them the same option my parents gave me which was a no pressure option of picking whatever I wanted to do in life my thanks to Carla tropman I really appreciate you taking this time Carla uh thanks for sharing your story both here and again in your terrific book which is called Dark dirty dangerous the vibrant future of manufacturing thanks for taking the time thank you Lauren I appreciate [Music] you one thing before you go everything we do at 21 hats is created by entrepreneurs for entrepreneurs to help us all learn together if you get something out of listening to these podcast episodes consider joining the conversation you can do that by joining the 21 hats sounding board a slack Channel where you can tap the wisdom of a very smart crowd or by becoming a founding member and joining our monthly Zoom Forum where you can be part of conversations much like the ones we have on the podcast you can sign up for both by subscribing to the morning report if you have any questions you can email me at Lauren 21h hats.com and if you if you get something out of this podcast or out of the morning report please tell a friend tell an enemy tell every business owner you know your word of mouth owner to owner will always be the most effective way to build this community for all of us thank you it means a lot this episode was produced by another entrepreneur Jess staron founder of blank word Productions thanks for listening everyone