Many mold shop owners are getting ready to retire or are even well past retirement age, so the question of what to do with the business—especially a thriving, growing business—becomes particularly vexing. One company found an answer.
When John Lau and Irv Fisher founded Dynamic Tool & Design in Menomonee Falls, WI in 1976, they were in it for the long haul. Over the past 34 years they, along with a top-notch management team and employees, built a strong company that has a reputation for providing quality molds for its customers, many of who have long-term relationships with Dynamic. The vision of both Lau and Fisher has always been to see the company move forward into the future based on the success of its past three-plus decades.
“Our focus has always been to grow the business, to build a lasting company that customers can count on to be there for them in the future,” says Fisher. “In addition, we wanted the managers and employees who have worked so hard to ensure Dynamic’s success receive the benefits of this success.”
In a telephone interview, John Lau said that he and Irv Fisher have been exploring their options for about 10 years. “We looked at the ESOP [Employee Stock Ownership Plan] option about five years ago, but just couldn’t find the right people to help us with this,” said Lau. “We looked at a direct sale to some of these LLC groups that were buying smaller companies and were fairly popular a few years ago. But, right about that time the bottom fell out of the economy.”
Fisher and Lau finally found the right people to help them design a good ESOP program, and decided that was the optimum way for them to plan their retirement. “It’s not a cheap option,” Lau said. “There are a lot of expenses involved. The ESOP trust has its attorneys and we have ours. It’s regulated by the IRS code similar to a 401K program, and has a vesting schedule. Also the Department of Labor watches over it very carefully. The main consideration for an ESOP is to do it right. We did it right.”
The average employee tenure is 15-20 years, and a few employees have upwards of 30 years. Currently, Dynamic employs 62 people. All the employees who meet the criteria for participation are part of the ESOP. “Todd Thull, design engineer, said, “It’s great to be an employee-owned company. You want to go above and beyond to secure a bright future for something you are a part-owner in. It encourages you to work towards your goals for both your customers and yourself.”
“We’ve always looked at trying to have a respectable company with a good name—we want to keep that going past us. Ultimately the ESOP became the right thing, the best legacy to leave,” Lau said.
“As many of our loyal customers know, Dynamic has a very strong management team in place, which has allowed our success to be possible,” added Fisher. “So, while both John and I will be staying on, going forward our management team will be the driving force that propels Dynamic into the future.” —Clare Goldsberry