This as-told-to essay is based on a conversation with David Heacock, CEO of Filterbuy. It has been edited for length and clarity.
I swore I would never get into the family business. My grandfather founded a machinery company in Talladega, Alabama, and the business was successful locally, employing 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 stepped down, leaving my dad, uncle, and aunt to run the company. With each person holding a minority share, there was a lot of wrangling over decisions. Even when two people agreed, the other often felt hurt.
This impacted everything from whether to invest in a new machine to what cars the company owners drove. There was never estrangement, but the tension ebbed and flowed. My grandfather’s presence ultimately kept the business and the family together — no one wanted to let him down.
I made $2 million as a trader, but left because I felt unfulfilled
My dad encouraged me to work outside the family business. After college, I landed my dream job with Goldman Sachs. I was making $55,000 at the time, and budgeting every single penny — right down to the nickel I’d donate to a panhandler. It drove my now-wife nuts, but it meant I could save money, even while living in New York.
At the end of my first year, I received a bonus: $70,000. I was absolutely shocked. It was a surreal amount of money. I saved it and allowed myself to be a bit less stringent with my budgeting.
Within about six years, I was running a trading desk in New York, making $2 million a year in salary. It was an unfathomable amount of money to my parents and me.
Yet, I started to question the work. I realized I was just a bookie for hedge funds. I thought automation would take over the job. When I was 29, I asked myself if I wanted to be doing this at 40. The answer was a resounding no, so I left.
Buying the company brought my grandfather and me together
At that time, my dad, uncle, and aunt were ready to retire. They were in talks with a private equity firm to buy the business, but my grandfather wasn’t happy about it. He wanted the company to stay in the family.
My grandfather wanted me to purchase the business, and I was looking for something different from trading. I wasn’t sure what I would do with the business, but I agreed to buy it for about $2 million.
I started flying from New York to Alabama each week from Monday through Thursday. I would have dinner with my grandfather almost every night. He understood the business in a unique way, unlike anyone else. I owned the business for three years before he died, and our discussions about it became a very special time at the end of his life.
I pivoted the company to a whole new arena
The company, Talladega Machinery and Supply Co., was essentially a wholesale business. It relied on long-standing relationships with the company’s salespeople, but they were all approaching retirement age. I knew it was unsustainable.
I researched various business options and decided to pursue air filters, renaming the company Filterbuy. There was no connection to the original business, but there was a good opportunity for growth. When I spoke with my grandfather about it, he understood immediately.
In the first seven years of the business, I paid myself a $40,000 salary. I’d spent most of my previous earnings, including on medical school for my wife and on an investment property. A significant portion of my net worth was tied to the business. Luckily, that has paid off. Last year, the business did about $255 million in revenue. We’re a very healthy business these days.
I don’t want my daughters to take over the business
My goal is to build the business large enough to bring it public. I don’t necessarily want my three daughters running the business together, experiencing 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 have a positive impact on our customers, community, and family. My grandfather used his company as a vehicle for good, even helping build a local hospital. He would be so proud that the family business now employs 400 people in Talladega, and 862 employees around the country.
I’m glad to carry his legacy.
Read the full article here
