Anthony Lee had some ideas for what he wanted to do when he got out of the Army in 1999. Being a janitor was not one of them. He planned to go to college and maybe study accounting, but when his then-girlfriend, now-wife got pregnant, Lee needed a job fast. He gained factory experience working for a steel manufacturer before getting laid off, and after six months of job hunting, the only position he could find was as a janitor for another manufacturing company, Eaton Corp., based in Massillon, Ohio.
Within four years, Lee rose from janitor to supervisor of the department that makes retaining rings. But layoffs were rampant, not only at Eaton, but throughout the manufacturing-based town. When the company decided to sell the retaining rings department, Lee realized he was in danger of losing his job again. This time, he took drastic action. He spent nights at the library, researching how to write a business plan for so he could buy Eaton's ring division. The plan caught the interest of investors, who had one caveat before buying the division: They wanted Lee as co-owner of the company they named Ring Masters.
What was your first job at Eaton Corp. like?
My first job was as a laborer. Basically, I cleaned the bathrooms, swept up, mopped, picked up cigarette butts -- I was a janitor. But being a union shop, whenever a job opened up, you could bid on it based on seniority. I was probably a laborer for six to eight months before a job opened in the ring room.
What was your mindset working as a janitor?
I never really got discouraged. It wasn't what I planned for myself, but with a baby on the way, I didn't really care as long as I was earning some money to survive and for my child. I didn't get down. I knew another job would open up.
What gave you the idea, as an employee, to buy the company?
The company changed ownership three times in four years. The last owners decided to close the plant down, but the ring room was a profitable division and still had a strong customer base, so they were going to try to sell it. I had been supervisor for several years and knew the operation from front to back. I had to give the tours of the ring room to outside buyers and show them the equipment and the product. After the first group left, I came back to my office and sat down, realized they could just buy the equipment and I'd be out of a job. That's when I said, "Maybe I could do this." I had no idea where to start, but decided to put something together.
So you'd go to the library every day after work to research how to write a business plan?
I worked really long days, until 7:30 to 8, and that would give me an hour, so I'd shoot to the library. I'd just sit there and read and take notes. I was trying to familiarize myself with these business terms. It took a long time before the things I was reading made any sense to me. I'd always ask questions to people in the industry and look around on the Internet. And the next day I'd do it all over again. It was a long process -- about six to eight months.
And what was your intention with the business plan?
I was very naive. I thought I'd put a business plan together and be able to go to a bank and ask for a loan. But after the business plan was complete, I took it to an M&A attorney. He never had an employee approach him about trying to buy a company. He introduced me to local investors, who were friends of his, and at one point, we were having dinner at a restaurant, and they said, "We've looked at your plan and we're willing to go forward with this and would like you to be an equal participant." I was very glad. That hadn't crossed my mind. I didn't think I would have enough money to participate.
What you needed to be a co-owner was $25,000. How did you raise that money?
I had a very nice motorcycle I used to ride around on the weekends -- I sold that. I had a couple of accounts here and there that I cashed out. I actually rolled up some change. I don't have a lot of money, so that $25,000 was a stretch for me.
Moving up from janitor to co-owner is a huge leap, but why do you consider this just a stepping stone?
I feel very blessed. It's been a great learning experience, which has actually motivated me to do it again. I feel strongly about the manufacturing base in our country. I think we can get back to where we were years ago, before everyone decided to start offshoring. I'd like to attempt to do this again. My goal is to make Ring Masters a 100-year success, and to apply what I learned to even more companies and put people back to work manufacturing American-made products.
Name: Anthony Lee
Company: Ring Masters LLC, manufacturer of retaining rings, heavy moving equipment
Location: Massillon, Ohio
Founded: October 2003
2012 Projected Revenue: $5 million to $7 million
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