Jeff Barth is an entrepreneur who left a 20-year career in corporate finance to purchase a manufacturing business. He is the owner of JWB, a machine shop that manufactures and distributes aftermarket wire cutting and stripping blades for the electronics and cable assembly industry.
Nate Wheeler is the host of the popular Manufacturing Insiders podcast. He also owns weCreate, a nationally recognized marketing agency that helps manufacturers grow, save money, and become more efficient.
In this episode of Manufacturing Insiders, Jeff Barth details his journey of entering the manufacturing world with no machining experience. He discusses the initial struggles of running a general-purpose shop and the market pressures that forced a change in strategy. The conversation explores the decision to abandon a broad service model for a highly focused product niche.
Jeff explains how this shift allowed him to build a global business by leveraging modern digital tools that his larger competitors ignored. Discover how he used an e-commerce platform and online channels to find customers in over a dozen countries. He also shares his approach to pricing for value and targeting higher margins to build a resilient and profitable company.
Nate Wheeler (00:01.602)
Welcome to Manufacturing Insiders. Today I have Jeff Barth with me. He is an entrepreneur at heart and a go-getter. One thing I loved about our initial conversation was Jeff’s passion for looking at new things and trying to improve and make things better. A lot of times, manufacturers fall into the mindset of, “this is the way that we’ve always done it, and this is the way that we’re always going to do it,” which is not going to work for the future of US manufacturing. Jeff built a successful business, so welcome to Manufacturing Insiders. Glad to have you on today.
Jeff Barth (00:40.43)
Thanks a lot, Nate. It’s a pleasure to be here, and I’m looking forward to our conversation.
Nate Wheeler (00:46.986)
Awesome. Give us an understanding of what you do over at JWB. My understanding is you’re in the electronics wire processing industry.
Jeff Barth (01:01.006)
We’re a machine shop that does mill work, some lathe work, and a lot of surface grinding. We focus primarily on customers that do wire processing and cable assembly. The core product we make and distribute is wire cutting and stripping blades, so we are an aftermarket manufacturer in that segment.
To get a visual, think about when iPod cords were actual cords with a jack and a connector on the end. A big spool of wire comes through an automatic wire processing machine, and the ends get cut and stripped so you can put the jack and connectors on. I make the replacement blades that go in the machines that cut and strip that wire. That’s primarily what we do. The more I’ve narrowed my focus on that, the more my company has grown and the more customers I’ve been able to serve.
Nate Wheeler (02:11.267)
Something I preach all the time is if you’re a machine shop, a fabricator, or an injection molder, you have a huge competitive advantage in developing and making your own product. You did that out of the gate, and I think that’s smart. This might be a good time for you to think about the reverse and start to look at some contract work as a supplement to that business.
Jeff Barth (02:37.582)
I’m focused on continuing to grow my business to a certain level so I can have the cash I need to grow into other types of machining. In the Phoenix metropolitan market, there are a lot of new defense contractors and a lot of the EV supply chain is being built out in the chips area. I think there’s a lot of opportunity there. The supply chains for those industries haven’t even been put together, so there’s a big opportunity in that realm.
Nate Wheeler (03:19.299)
I agree. I work with some companies in that market, and it seems to be growing very quickly. I completely agree that it’s a great place in the country to be. A lot of manufacturers want to keep these supply chains close to home. People in Pennsylvania will get a lot of business in Pennsylvania, though they could get it outside the area in some cases. The same goes for Arizona. You started your career in the financial services industry, and at some point, you decided to buy a manufacturing company.
Jeff Barth (03:59.278)
I spent 10 years each at two different Fortune 100 companies. I enjoyed it and got to play as an entrepreneur inside a large company, but it wasn’t my money I had to use. I got tired of pushing paper and wanted to create and make something physical. I felt near-shoring or reshoring was going to start coming back, and it did, though it took longer than I thought.
I wanted to get into something where I could make and distribute a product. That proved to be challenging because I started around 2008-2009 when all the financial markets were going down. It took a lot of perseverance for a number of years to start getting some real traction.
Nate Wheeler (05:02.337)
I understand the drive to work with your hands and physically make a product, as opposed to trading the fictional fiat currency we’ve created. But why did you choose this company?
Jeff Barth (05:26.498)
To me at the time, it didn’t matter what type of manufacturing. I looked at 45 companies, from injection molding to fabrication to prototype parts. I had a price range I needed to be within for the assets, and this one just happened to fit. The previous owner wasn’t involved in the business and had stepped away a lot, so the sales had fallen, but it had good bones. I wanted to take that and figure out how to grow it, not realizing at the time that the market was about to go into the tank.
When I picked this one, I thought, “I can do this. I can figure it out.” I had a little bit of help because I didn’t have any manufacturing or machining experience at all. Some people start as a machinist and then say, “I can go out on my own.” I was looking at it as, “I want to be a business owner and an entrepreneur, and I can figure this out from a manufacturing standpoint.”
The help I had was my dad, who had spent about 50 years in machining. He was 70 and came out of retirement to work for me in Arizona, moving from Minnesota. That helped me out because I didn’t know the difference between different types of tool steel, plastic materials, stainless, or aluminum, nor how to run the machines.
Jeff Barth (07:23.79)
It took a while to get the momentum going because there was a huge learning curve I had to go through.
Nate Wheeler (07:31.095)
That’s a huge undertaking; I can’t even imagine. Would you say that your biggest struggle or sticking point in the early years was learning the background of the machining trade? Or were there other surprising aspects of taking over a business like that you had to deal with?
Jeff Barth (07:55.254)
My naivete was probably both a hindrance and a godsend at the same time. I felt like, “I can do this. I’ll just keep pushing and I’ll grow it.” But at each stage, as I was moving along, I ran up against things I just didn’t know. It took me longer to research and understand this market.
At first, I said I could do any product, so I joined a machining group thinking I could make this part or that part. I didn’t have the equipment or the insider knowledge. We could do a lot of things, but it was all manual. Doing things manually, you can’t be price-competitive, and there are some things you just can’t do.
It just took a long time for me to make progress. It’s such a niche that you can’t walk into a place and say, “Can I make parts for you?” Especially in this niche, you have to figure out who has the need for the blades. You can’t just Google search “who needs wire cutting and stripping blades.”
Jeff Barth (09:28.846)
It’s one customer at a time. To sum up my approach, I look at this as a 30 to 50-year program. When I started, I knew the relationships were going to take time, and I had to have patience with that. I just have to keep getting back up again.
Nate Wheeler (09:49.516)
I can see how the learning process would be huge. You also have to understand the customer base and how you’re going to get in front of them. That’s what I do every day. People come to me with their product or service, and I say, “Here’s how we’re going to find your customers. Here’s what they’re looking for.” Fortunately, I’ve been doing this long enough that it’s fairly easy for me to wrap my head around it.
You sell wire stripping blades, so who buys those machines? Wire processing companies, large electronics manufacturers, and cable harness manufacturers. Now we have a target. Let’s look at some associations and start to generate content around what they’re looking for. Without that knowledge, what did you do?
Jeff Barth (10:40.046)
When I started, the internet was just starting to happen, and people had static websites. Almost all my business was within the US. This could be me being naive, but I decided I wanted to figure out if I could sell around the world. It’s just as hard to find customers in the US as it is to find them abroad. I worked hard to make my website more dynamic. Fairly early on, around 2012 or 2013, I created my first version of an online store. People in B2B weren’t really engaged yet with buying online, but over time, it started to take hold.
Jeff Barth (11:37.646)
I’ve been fortunate to serve customers in over 13 countries through my e-commerce platform, and I also introduced Amazon to my mix of online sales. Going to trade shows helped as well.
Jeff Barth (12:04.878)
Making my website more dynamic was key. YouTube was a big part of it because I started doing videos early on. When I go back and look at some of them, I cringe. It was me holding up a GoPro, saying, “This is Jeff Barth. Welcome to my shop in Tempe, Arizona,” and I talked through the parts we make to try to build credibility.
The goal was to have it on the YouTube channel, but what I didn’t realize is that it also helps the Google algorithm. That’s helpful for increasing the ranking for my site, my e-commerce, and for YouTube itself. It’s been a whole bunch of things where I’ve probably put more money into it than I needed to if I had professional help. I certainly learned an awful lot, and it got me comfortable with being uncomfortable on camera.
Nate Wheeler (13:13.663)
I like that perspective. It’s very difficult for a lot of manufacturers to try new things. You are throwing a lot of things out there and seeing what sticks and having success with it. One of the benefits of working with somebody that markets many different types of manufacturers is that I’ve gone through a ton of iterations of what’s working and what’s not. I do it for my own business.
When you’re running a machine shop, being able to allocate the necessary time to these things and ensure you’re not wasting your time is huge. The name of the game is content generation. Whether it’s video or written content, the more you can put out there, the wider the net you create to draw in that target market. That is a smart approach.
When you were going through this process in the early years, how did your financial background assist you? I assume you have some skill sets in that area that many shop owners don’t have.
Jeff Barth (14:51.598)
I probably brought a couple of perspectives that were helpful. In my last few roles, my teams were between 300 to 500 people, and you learn because you have to be responsible for the spending. The challenge in relating that to the small business I have is that it wasn’t my money; it was someone else’s. All I had to do was make sure I got approval or had a budget for the expenditures. I had a lot of experience with the P&L and understanding the different categories, including the ones I would have to allocate funds to if I wanted to grow the business.
One of the things I did early on, until about 2015 or 2016, was that I didn’t pay myself a penny. That was a challenge, so I relied on some of the assets I had accumulated before to make it as a family. My wife and I agreed right away that we couldn’t use our retirement money. We had some rules and safeguards there because we had a reasonable amount saved. I had a backdrop that if the business didn’t work out, we weren’t going to be in financial ruin. It would be an emotional hit and it would suck, but there was a backstop. That allowed me to be more creative.
Jeff Barth (16:59.212)
It allowed me to test all sorts of things, especially on social media. To me, that was the only way I was going to get known.
Nate Wheeler (17:14.163)
With a background in finance, did you go out and look for ways to leverage other people’s money to build what you’re trying to build?
Jeff Barth (17:41.494)
I’ve had different times to do financing, and it was always debt financing, usually through an institution. Now it’s pretty much through a traditional bank, but at the time there was what you might call hard money, where they’ll pull money out every week, and I needed that for cash flow. As a small business, you usually don’t have the options of a larger business. I always tried to create relationships when I didn’t need the money so that when I did, I had access to it.
Unfortunately, you spend time doing that instead of machining or getting new customers, just because you want to have that backstop in case the market dips quickly. Most machine shops or manufacturers are a month or two away from a significant financial challenge.
Jeff Barth (18:59.992)
That was a component. I always watched my spending, looking at my financials and my bank accounts to make sure I could maintain cash flow. I don’t think I’ve ever been 30 days late on anything, which is something I pride myself on, but it was difficult sometimes making sure you can make payroll every single time. You have to, otherwise you lose trust with your employees and your suppliers. I decided to forego any financial reward, payment, or wage until I was probably seven to eight years into the business.
Nate Wheeler (19:58.936)
Holy cow, that’s commitment. I can see two or three years, but that’s quite an investment. What gave you that level of faith? I would think a lot of people would have said to themselves, “I don’t think this was the best decision. I’m going to go look for something else.”
Jeff Barth (20:19.758)
That for sure entered my head, and my wife would ask, “Are you going to make this work?” I would say I have an internal cup full of optimism, balanced with realism. Every time you get knocked down, which I think all business owners and leaders do, you have to get back up again. There were for sure times when I thought, “What the heck am I doing? If I just go back to the corporate world, I’m going to be fine.”
As I get older and just turned 60 this year, you think about how this will affect your financial future if you can’t make it and get some of the spoils. I was doing pretty well in the corporate world, and my guess is that I could go back and rise to that level again, even though times and technologies change. But I decided I wanted to do this.
Jeff Barth (21:58.988)
One of the key things I would say is that it’s imperative that you pick the right partner, meaning the person you spend your life with. My wife and I have been married for just over 35 years, and it has not always been easy, but we both had faith in each other that we were going to make it through. I think that’s a key component. If you don’t have that, it’s really hard.
No matter how much optimism I have, there are times when I go dark in my head, wondering, “Is this really going to work? Can I really make this happen? What do I know about running this business? Am I fooling myself?” To have the right partner there for you, saying, “You’ve got this. You’ve continued to make progress. I believe in you,” is essential. You’re bringing me back to some of the times that redefined me. One of the things I did that started to work was I narrowed the focus of my business. I decided I was only going to do millwork and grinding, and then I narrowed it even further to just standard and custom blades and some connectors.
Jeff Barth (23:25.346)
That freed up a whole bunch of headspace because I wasn’t trying to figure out how to be everything to everyone.
Nate Wheeler (23:30.997)
That’s good advice. I like that.
Nate Wheeler (23:36.83)
So that was one of your strategies for dealing with those dark times—realizing that you were too scattered. You’re an entrepreneurial person, I can sense that about you. I think the fatal flaw of us entrepreneurial types is, “I want to do that. We should do that. This is a great idea.” Then you eventually don’t have time to focus on one thing. That’s an important thing for people to realize.
I always observe this with idea people. They say, “I’m going to create this new product,” and you know it’s going to last three weeks before they’re onto the next thing. Being not only an idea person but also the person that delivers are two completely different things that you need to figure out how to bring together.
Jeff Barth (24:37.774)
I would add that I’m self-diagnosed with squirrel syndrome. It’s like, there are nuts over here, and there are nuts over there. I can keep doing that all day long, but I have to bring it back to the core components. That might be part of the traits of an entrepreneur.
Nate Wheeler (25:03.051)
I’ve spent 15 years going through that iteration of idea, excitement, and burnout. I’ve gotten to the point where I will not allocate energy to something that I do not think is going to work. I’m pretty good at assessing whether something will work through some basic criteria and then deciding whether it’s worth going after. If it is, we throw our weight behind it. If it’s not, we just shut it down. So the blades are working great. What’s your next step? How are you going to get to a $5 million business in the next three years?
Jeff Barth (25:54.766)
Part of it is still the blades and staying focused on that. The things I’m doing and developing internationally are helping me see the pathway to that. I sell in 17 countries, and exporting is about 65% of my business. Only 35% stay within the US, and I’m only beginning to scratch the surface of the opportunities there. So there’s a focus on developing that and maybe adding some distribution overseas.
The next part is, as the cash flow continues to increase, I’m going to start networking within the Phoenix metropolitan area. I’ll see what’s needed, how I can fulfill a need, and then identify what kind of equipment I need to purchase. I’m looking into doing more of that boots-on-the-ground work in the Phoenix area, probably in the next six to 12 months.
Nate Wheeler (27:17.475)
Contracts, contract manufacturing, machining.
Jeff Barth (27:24.3)
I also need to make sure my target margins are going to be 20% to 30%. So how do I do that?
Nate Wheeler (27:38.145)
Where did you come up with that number?
Jeff Barth (27:41.452)
My margins are pretty good, higher than that, as I start to have a little more scale in my business. Based on my gut understanding, successful manufacturers have an 8% to 20% net profit margin. For me to take on the risk of purchasing all the equipment, I want to make sure I can be in that higher range to make it worthwhile.
Nate Wheeler (28:25.183)
So how do you do that? In production machining, you’re probably going to be on the lower end of that 8% to 20%.
Jeff Barth (28:35.266)
That’s a great question. I’m trying to understand if there are things I can do specifically for electronic assembly, the PCB board, or something related to the supply chain of either chip manufacturing or electronics assembly, not cable assembly. As more of it comes back, my perspective is there won’t be as many suppliers in that niche. If I’m local and can serve that market well, I might be able to have a better margin and charge more.
Jeff Barth (29:26.956)
I like to think that once people get to know me, they want to work with me. It’s hard for those companies to create a supply chain. That’s an additional niche market, so it’s not just anyone doing any type of machining. It’s probably going to be focused on that segment. It’s a sister industry to the cable assembly and wire processing industry, so there are some connection points.
Jeff Barth (30:10.584)
That’s my goal. Whether or not I’m able to obtain the 20% to 30% net margins, we’ll have to see.
Nate Wheeler (30:19.839)
You might end up in a lower-volume, prototyping-type niche there. It’s an interesting problem to solve, and I think it’s intelligent that you’re starting there. Instead of just saying you want to go after production machining, you’re starting with the margin you want to achieve and what space will be the best to get you there. I think we could come up with some answers for that, but that’s very interesting.
Jeff Barth (30:53.676)
Some business owners think, “I can’t charge too much because then I won’t get the job, or they’ll go somewhere else.” My frame of mind has evolved because I was for sure there at one point, thinking I had to get anything that would bring in some revenue. I’ve decided that I’m not going to be the low-price provider unless I can be profitable with huge volume.
It’s not going to serve me well to be the second-lowest price provider. I want to push towards the higher end, provide good value, build relationships, and serve them well. Maybe a quick turn is something they’re willing to pay for. But I need to make money, and I need to make the margins that will allow me to stay incentivized to continue producing and supporting customers. They need me to make money, otherwise I won’t be in business and won’t be able to serve them. It’s a bit of a mindset shift. If I’m charging a little more, maybe I don’t get all the business, but I don’t have to do as many jobs for the margins to be there.
Jeff Barth (32:41.955)
I would be the first to say I don’t have it figured out, but I know that’s my role, and I’m trying to think of other ways I can get in front of more people at a low cost so I can continue to have a pipeline of business. A lot of machine shops have four to eight customers. I have, on a three-year buying cycle, probably closer to 500.
I’m used to that kind of model where I don’t think I have any single customer that’s more than 5% of my business. If I lose a few because it isn’t profitable, it’s okay. I still want to grow and get as much business as I can, but it needs to be the right business. One of the things I’ve started doing is getting involved with the trade group IPC. They’re an international group for electronics and electronic assembly.
In the last three years, they’ve been more involved with the smaller side of it, which would be the wire harness and cable assembly side. At one of the management events, I sponsored an event. The positive there is it doesn’t cost me anything net-wise to do it, but I get exposure and introductions to a lot of different business owners. I’m trying to think strategically about how to do that, so my brand and my name are right next to the big original equipment manufacturers’ names and some of the bigger players in the industry.
Nate Wheeler (34:57.827)
It’s important to consider the trade-off you’re making on the continuum of investment versus effort. The less you invest, the more effort you have to put into business development. That’s one mistake I see a lot of owners make. They say they’re just going to have their sales team go to trade shows and set up. That works, but it’s a lot of effort, and so is cold calling. The easier way is to figure out what your customers are looking for, generate the content that will draw them in, and then watch it happen.
That’s the way to do it. I’m not saying there isn’t a place for everything else. Part of that process of drawing in traffic involves backlinks, which are an indicator of credibility to Google. Essentially, a backlink is a link from another website that points to yours. When you join associations, they often list members on their website and link to you.
This can be a powerful indicator to Google that your website should rank for your desired content. That’s a side benefit of some associations, but you have to be selective and invest in the right ones because not all provide a good backlink.
Jeff Barth (36:47.302)
You touched on some important things about how to maximize your time and money for gaining attention. For example, with Amazon, they take anywhere from a 14% to 17% commission on a sale, and they have a lot of rules you have to follow. What I’ve found is that it helps my SEO. Even if I’m not doing any advertising on it, some of those links pop up at the top of a Google search.
The challenge with customer acquisition is that Amazon owns the customer, not you. I don’t do fulfillment by Amazon; I fulfill from my shop. I have customers that have bought there and then transitioned to doing business with me directly. What I’ve found is that more customers don’t want to set up another vendor. Since Amazon now has payment terms, they can buy my products through there.
The other thing I’m exploring is that I’m one of only two other aftermarket manufacturers in the world outside of China. There might be a shop somewhere that makes a specific blade for one company, but the other two aftermarket manufacturers are larger than I am and have been around longer. They have a static webpage with a decent catalog. They’re good companies and offer good products, so I have nothing but admiration for them. But they don’t do anything else.
They don’t have a YouTube channel or utilize Facebook beyond a static page. They don’t put their prices on their website or sell online anywhere. Their model is different, and it’s probably hard for them to do that because they have reps in the field. This allows me a different kind of exposure through the internet than they can get.
Nate Wheeler (39:20.353)
We see that a lot. Search algorithms are attracted to transparency, especially in pricing.
Jeff Barth (39:30.328)
If anybody wants to manufacture and distribute their own product, I recommend they go through the steps, but there’s no quick and easy way. Each market segment will react differently to how you market to them. For example, I can’t do Google paid ads because I don’t get a return, and I haven’t found anyone who can help me get the kind of returns I need. You have to be creative. It’s a long-tail approach to sales and building relationships.
Nate Wheeler (40:12.309)
It’s about throwing a lot of stuff at the wall and seeing what sticks.
Jeff Barth (40:17.282)
And then going deeper once you find some things that do stick.
Nate Wheeler (40:22.211)
Right. I think it was David Ogilvy, the father of modern advertising, who said, “Only 50% of my marketing dollars produce a result. The problem is I don’t know which 50%.” On that note, one topic I like to ask everyone about is how you are leveraging AI, machine learning, or robotics in your business.
Jeff Barth (41:08.206)
That is a relevant question. There are a few different ways I’m thinking about it. One is for our monthly newsletter, having AI help write a sequence of emails. We put in the content we want, and it dramatically reduces the time to write the scripts for that. If I say I want a series of six emails to follow up over a two-month period with certain main topics, I can type it in, and within a minute and a half, it comes back with six emails.
If you want three or four different versions of each email for A/B testing, it will do that instantly. It’s still at a point where you have to go back and review it to make sure it makes sense and matches the voice of the company. But all of a sudden, instead of outsourcing, you can have creative content generated. You have to be patient, test, and learn the testing aspect. That’s what we’re doing from a marketing component right now.
When I say ‘we,’ it’s me and another person. It dramatically lowers the time we have to spend, but you have to be committed. If you do it haphazardly and don’t follow through, you’re not going to learn. AI can learn, so if you tweak it, it will come back with better results. That’s one aspect on the marketing side. Another is within the shop for our standard operating procedures. We can use AI to create the template. We bullet-point the items, and it can do the technical writing. We then have to go back and review it for procedures in the shop and for shipping.
I ship anywhere from two to 15 items a day. We use it to define the standard process, from going into the system to create the order to all the steps for pulling it, so you have a consistent experience every time for the person doing the work and for the customer. There are tools we could use anyway, but AI just shrunk the time. Another area I’m trying to figure out how to deploy it is with a podcast I’m creating for the niche of cable assembly, wire harnessing, and electronic assembly. I’m exploring how to use AI to help promote it, maybe to write press releases.
I’m in the infancy of learning how to deploy AI, so those are the things I’m trying to tackle. There’s probably so much more I’m not even thinking about, but I am trying to think about it. As a side topic, I personally want to use it as a hobby to create sci-fi time-travel stories. It will help me polish my characters, situations, and storyline, and then eventually create video. I might be able to do it myself without needing a huge number of people to help.
My advice on this topic is that you’ve got to start using the tools. You don’t have to use every one, but you have to start. Over the next three to five years, I think you’re going to see huge numbers of white-collar jobs no longer needed in their traditional forms. Other jobs will be created, but this will be an efficiency gain for a lot of companies where you can increase your margins, though there is a downside to it too.
Nate Wheeler (46:27.819)
I agree. Like you said, it’s about using the tools and getting familiar with them, because future jobs will be for people who know how to use AI to do their job better.
Jeff Barth (46:42.252)
Absolutely.
Nate Wheeler (46:43.447)
Well, Jeff, thanks a lot for coming on today. You have an awesome business. I think a guy like you is going to find new ways every day to become more successful, and I’d love to see what you accomplish over the next three to five years.
Jeff Barth (47:00.376)
Thank you. It was a pleasure to be on. Thanks.
Nate Wheeler (47:03.156)
Awesome. Thanks for coming on.