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From idea to startup

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From idea to startup: Downturn brought opportunity to this machinery firm

Without borrowing a dime, Dan Jones started Global Machinery Co. on the idea that the economic downturn and housing crisis had created sales opportunities.

A year and a half later, the company, which buys and sells used woodworking machinery, is profitable, Jones says.

A native Charlottean, Jones, 50, had been in sales for more than 30 years, working his way from an entry level role in the tooling industry (saw blades, in particular) to national sales manager for MLS Machinery. But he started itching to run his own business.

He also saw potential for success in the downturn. In times of plenty, builders, contractors and manufacturers overextended themselves.

Builders bought new woodworking machinery. Manufacturers did, too, to continue to produce all the cabinets, flooring, crown molding and furniture for all the new homes being built.

When both had to close their doors, much of that machinery was repossessed.

Then, when struggling furniture businesses needed new machinery, nearly all of them bought used machines, not new. Jones says that before the crash, about 50 percent of annual woodworking machinery sales were new machines.

After the crash? Five percent, Jones says.

“We saw that and said, ‘Even in a bad economy, we’re going for it,’ ” Jones says.

Low cost, high return: Global Machinery Co. offers several services.

First, through the website, globalmachineryco.com, which gets about 13,000 hits a month, dealers, users and manufacturers are able to buy and market their used woodworking machinery. It doesn’t cost sellers anything to list their machinery, and if the sale goes through, Jones takes a 10 to 20 percent commission.

Once the order is placed, Global offers logistics services – transporting the machinery from the seller to the buyer.

Jones also buys machinery, if it’s a good deal. Then he’ll fix it up himself and sell it from his warehouse and showroom on Griffiths Road, behind the Costco at the intersection of Tyvola Road and Interstate 77.

He now has clients worldwide, as well as several big accounts with furniture manufacturers such as Ethan Allen, Stickley and Ashley Furniture. He’ll sell their used machinery and fix their existing machinery.

He also works with banks that repossess entire plants. They’ll send Jones to the facility, where he’ll empty the equipment and remarket it for them.

Employee satisfaction: A salesman himself, Jones knew what it would take to get buy-in from his salesmen: high commission.

Typically, he says, a salaried machinery salesman will make an 8 to 10 percent commission; a contract salesman, about 25 percent.

Jones gives his contract salesmen 50 percent of the profits.

“It’s real simple,” Jones says. “We want to create an environment where you’re making more money than you’ve ever done in your life. It builds loyalty. Why would you want to go anywhere else?”

The housing crash also helped with recruitment, as many big manufacturers laid off their regional sales managers. Jones says his commission structure made it easy to attract three experienced salesmen on a part-time basis.

Right now, Jones handles all marketing, sales and equipment repair. His son, Matthew, 24, handles shipping, freight and finances.

The perks of profit: In 2012, Global Machinery Co. did $559,000 in sales and netted a profit of $141,000, Jones says. The upside of entrepreneurship? Fewer people to share profits with and quality time with his son, Jones says.

The catch? “Entrepreneurs don’t sleep much,” Jones says, laughing. “They’re always working.”

From Idea to Startup tells the story of how an entrepreneur turned an idea into a business. Contact reporter Caroline McMillan at 704-358-6045 or cmcmillan@charlotteobserver.com.
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