Accountant leaves family business for sheet metal plant
His life was all planned out. TJ Bonnett obtained an accounting degree at the University of St. Thomas, and joined his family’s accounting firm. He assumed operational control of the family business in his early 30s. But Bonnett soon discovered he was not satisfied. He wanted a bigger challenge, and the opportunity to develop his skills as an executive.
So he ran away from home, professionally speaking.
Just before his 40th birthday, Bonnett bought LimPro, a Fridley-based metal fabricator. The 25-employee shop has operated independently since 1970. Bonnett’s now implementing an ambitious five-to-seven-year strategic vision that aims to acquire at least five more companies in the metal fabrication niche.
Bonnet knew better than to fly into uncharted territory without a guide, so early on, he connected with Gerald (Jerry) Schwalbach, a fellow accountant and longtime TCF Bank trustee, and Gary Hadley, a self-described serial entrepreneur who’s purchased more than a dozen companies over the past two decades.
Hadley’s perspective was invaluable during Bonnett’s months-long struggle to close the LimPro deal, and remains so as he learns the metal fabrication ropes.
“When I have a crappy day, I know I can call Gary for a pep talk,” Bonnett says. “His advice is usually, ‘Get back at it and keep your nose to the grindstone; even if it doesn’t seem like it, you’re moving in the right direction.’”
Bonnett hasn’t suffered any crushing defeats yet, thanks in no small part to his can-do attitude and strong support network. But he’s not blind to the possibility. In a competitive, low-margin industry in which “it’s pretty much impossible to plan more than 30 days out,” you’re only as good as your last month.
So, Bonnett reasons: If I’m going to fail, I might as well fail early.
“If you want to retire at age 65 and your business goes under when you’re 60, you’re not going to recover in time,” he says. “I’d rather fail at age 40, when there’s plenty of time ahead for the next challenge.”
The way he sees it, he has 180 months — 15 years — before the statistics say he should be at the peak of his earning power. It can take that long to pay off and grow a leveraged acquisition to the point that selling makes sense. But, if circumstances change and he’s forced to sell sooner, Bonnett knows this won’t be his last chance to prove himself.
Don’t be too credulous
Bonnett’s first dance at the acquisition rodeo was a learning experience, to put it charitably. According to Bonnett, there was a big disagreement about the value of the inventory, which nearly derailed the deal.
When we spoke, Bonnett didn’t sound bitter about the ordeal, but that’s not to say he enjoyed it. Next time, he’s determined to head counterparty shenanigans off at the pass.
“I should have spotted [the issue] sooner, especially with my accounting background,” he says. “The right question to ask would have been: ‘If they were going to try to bilk us, how would they do it?’ — and then work backwards from there.”
Bonnett knows where he wants LimPro to be in five years. The way he sees it, the secret to survival is scale. In a niche crowded with smallish legacy players, that means targeting direct competitors and complementary outfits for acquisition. “
We have a hundred competitors in town,” he says. “All have their own strengths, and all are prowling for business.” That’s a recipe for consolidation, aka “industry right-sizing.”
According to Bonnett, the metal fabrication market’s fragmentation supports his plan to grow through acquisition. The archetypal owner is older than Bonnett: someone considering retirement in the near future, or perhaps already living a semi-retired snowbird’s life. These owners may no longer be interested in growing their businesses, at least with Bonnett’s vigor. They’re more likely to install competent stewards to handle the day-to-day, jet off to Florida or Arizona, and live comfortably off a predictable, more or less passive income stream.
Find niche and right partners
The challenges didn’t stop once Bonnett assumed control at LimPro. For one, Bonnett thought growing sales would be much easier.
“Getting new business has been five times harder than I anticipated,” he says.
Bonnett’s short-term solution: honing LimPro’s value proposition to position the company as a true one-stop fabrication shop.
In a crowded, hypercompetitive industry, it’s common for metal fabrication clients to use three, four, five different outfits. That’s not ideal for anyone involved. For fabricators, it increases uncertainty. For clients, it foments bloated, wasteful procurement practices.
“Some clients are nervous about putting all their eggs in one basket, but we tell them: ‘Hey, we can do a better job for you if you let us do all the work,’” says Bonnett. “With a single point of contact, our clients can reduce their purchasing costs and right-size that side of the business.”
LimPro’s capabilities aren’t unlimited. When Bonnett’s team can’t fulfill a client’s demands — for instance, when the client needs finishing work or a spendy tool that LimPro doesn’t have on site — they turn to a network of trusted local partners to either shop out the job or for short-term equipment rentals.
When we spoke, recent layoffs weighed heavily on Bonnett. He framed the restructuring as a painful step that he wished wasn’t necessary for the long-term health of the business — a poignant refrain from an executive who does not relish handing out pink slips.
One fruitful aspect of restructuring is developing and implementing policies that nudge longtime employees out of counterproductive habits. He waxes enthusiastic about new-and-improved cleaning processes that have left the production floor looking like new; he even bought bigger trash cans so that employees wouldn’t be shy about throwing out trash.
Old habits die hard, but Bonnett has learned that clear communication goes a long way. “When you tell your team why you’re changing policy, they’re more likely than not to see it your way,” he says.
Inception: 1970 (purchased 2015)
Leadership: TJ Bonnett, president, owner
Revenue: $3 to $5 million
Description: Limited production sheet-metal fabrication