Ep 494 Exit Story: Building News Sets for TV Stars—and a Business Worth Millions

·57 min·5 clips

Mac McLaughlin played online poker in his office while his team ran a multi-million dollar business.

Mac McLaughlin, founder of FX Design Group, joins host John Warrillow to share his 28-year journey building a multi-million dollar business that designed and built TV news and sports broadcast sets. McLaughlin, a theater major turned "accidental entrepreneur," explains his company handled everything from scenery and lighting to graphics and video walls for clients ranging from local stations to ESPN. The business operated on a project basis with no recurring revenue, and average projects ranged from $50,000 for podcast studios to millions for major networks, with a typical job between $250,000 and $500,000. His first serious attempt to sell involved gifting 30% of company stock to key employees in 2006, with a plan for them to secure a bank loan to buy him out within five years, but the 2009 recession crushed revenue from $5 million to $2.5 million, forcing him back into a sales role. McLaughlin learned to maintain direct control over financial reporting, implementing a custom weekly spreadsheet that combined projected revenue, cash on hand, and receivables into a single "okay" number for forecasting. He attempted to sell again around 2011-2012, when a broker suggested a valuation around 4x SDE, which would have netted approximately $5 million, but he felt that sum was insufficient given his age and his children's upcoming college expenses. In 2018, he sold his 60,000-square-foot building, purchased for about $1 million in 1999, for $3.2 million in an unsolicited offer, using the proceeds to downsize to a smaller property. He credits owning his real estate with providing critical financial flexibility, allowing him to secure a second mortgage during the 2009 downturn to keep the business afloat. The COVID-19 pandemic unexpectedly boosted business as viewership surged, and McLaughlin used the disruption to hire talented former subcontractors, building a stronger, more autonomous team while he worked remotely. By 2023, FX Design Group reached $7 million in revenue with about 12% net profit and 25 employees, having become more efficient by subcontracting excess fabrication work. A long-time subcontractor, who saw McLaughlin's profitable markup on his services and the company's stable operation, expressed interest after McLaughlin initially proposed a merger to create a $15 million roll-up. The subcontractor instead offered to buy the company outright, leading to a year-long negotiation that resulted in an all-cash sale at 3.5x SDE, structured as a stock sale for McLaughlin's capital gains tax advantage. The conversation is direct and educational, focusing on practical business lessons from McLaughlin's decades of experience, including mistakes and strategic decisions. Entrepreneurs in project-based services, construction, or niche manufacturing will find valuable insights on exit planning, financial management, and owner dependency. Listeners seeking highly structured investment analysis or debates on business theory might find the anecdotal, experience-driven style less applicable.

As heard by us

A sale story where the building and the business both matter.

Built to Sell Radio follows Mac McLaughlin through nearly 30 years at FX Design Group, the company behind the sets on TV news and sports broadcasts.

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Why you'd press play

See how a TV-set maker sold his company, kept close to the numbers, and made the building work in the deal.

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