Adventures with Lyrical: Buying a Business (REPOST)

Eomer_sl said:

Yup, it sucks but this kind of shit happens to us every couple years. Paying some four or five figure sum to make the problem go away is often better than paying the same amount to a lawyer just to end up losing the suit anyways. It sucks, but once lawyers get really involved they're the only ones who are going to walk away happy with the resolution.

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I was really surprised that the lawyers were wanting in legal fees the same amount as the damage. They told me that we could recover the legal fees back later from the judge. I wonder what % of people fall for that. Every other time I've filed a case, I've argued it myself, but because this one was more complex, I didn't feel comfortable with that. Also, the amount meant that it was going to be in district court, versus small claims.

It costs me like $100 to file and have someone served, then I argue it myself. I've never lost a court case, but I don't file cases where I don't think we are going to win.

Tarrant_sl said:

Oh for sure, doesn't make it any easier knowing that though. If anything it's more frustrating.

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I feel really dirty signing the release. This goes against everything I believe. There's right and there's wrong. But pragmatically speaking, I'm not sure I want to drop $3k on this.

It's sitting on my kitchen table and still unsigned.

Wuwei_sl said:

I know it is frustrating and that it hurts your pride, but this is a classic 'benefits vs disadvantages' or 'lose the battle but win the war' scenario. You just need to turn off your emotional side of your brain and think with your rational side for a moment considering how much you have learned from this experience. Sign it and move on.

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I'm not sure I could have done anything different. It was a freak accident. I could have tried to talk some sense into them, but they weren't listening.

Wuwei_sl said:

Some clients are just morons, it has nothing to do with your abilities so dont blame yourself!

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Actually, if I'd lied and put it on my insurance, I would have put 4k in service fees in my pocket. Because their offer was for me to do this, and they'd add more work. The original contract was for 2k, they would have added more.

I'm not real big on lieing.

Youngblood just sold me 63k in two contracts today! One of those was 60k, for a large company, that I assigned to him for almost a week to work on. With that coming in, we are pretty much guaranteed to get through the slow times without having to lay anyone off. I'm going to have to hire while everyone else is laying off.

I'm pumped!

Tarrant_sl said:

Is the rest of your crew still to retarded to see that they can thank him for having their jobs over the winter?

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You know how it is with some Blue Collars, they don't see the value of what anyone else does but them. But in general, he's done what I've told him to do to gain respect in their eyes, and the complaints have stopped about him. My Manager has stopped complaining about him also. They actually like the guy, because he does all the right things. Like today, he felt his price was off on a big job, so he pitched in and helped the guys, and bought them pizza as a peace offering.

I wonder, if I had to layoff people in the Winter (which it's looking like we won't have to now), and I laid off the three unskilled guys, and kept him, what the skilled guys would do? Would they threaten me that they'd all quit if I kept him over an unskilled guy? I've been losing sleep over that, because in the past, they've all tried to bargain collectively against me like that. I've actually lost too much sleep over this potentially happening.

Push comes to shove, they don't see much value in the people that bring in the work. Maybe I'm wrong, but over the last five years, that's the impression I've gotten.

Tarrant_sl said:

if push came to shove, no one is irreplaceable. you've said yourself all other places like yours are revolving doors. Replacements wouldn't be hard to find.

Also let them walk off the job, that means no unemployment for them, I doubt they would be willing to lose all their income over a couple layoffs. don't let them think they have power over you.

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This time of year, I have all of the power, as the other companies are all slowing down, and we have more work than we can perform. I'd rather just work harder to find new business, than to worry about post-Apocalyptic scenarios. We are booked until mid December right now, if we keep doing what we are doing, we'll be fine this Winter. By the end of January, it starts picking up, December and January are the worst months for us. If I look back at the last ten years' financials, we can lose 50k in those two months easy, before going green again.

Our biggest problem is that even though production is almost double from what it was last year, our backlog is up 500%. I put this out to the team on ideas to retain jobs. Think about it, it's the start of October, and we are almost booked until 2014. Based on past experience, we'll lose 25% of that if we don't make some changes. The answer is more complicated than to add more staff, because they need equipment to do the jobs (easily 100k for another crew). I was planning on adding another crew, but wanted to wait until Spring to do so. They've come up with some good ideas, we'll meet later on this week to talk about them.

Profitability wise, the company has made 30k net profit a month in August and in September. This month, because we don't have any huge repairs to equipment and it's a 23 day month, it should be a 40k month. November should be just as strong, as we are booked for that month. I'm going to say that having a consistent TV budget (as well as having two Estimators) has really moved the needle. It's sad that it's taken until June for things to really come together, but I finally have the right people on the crews. We've had months like this before, but then it has slowed down. Now that we are on TV, three of the last four months have been this good, and I can sit here and project with a 90% confidence level that the next two months will be as good, if not better.

Sales are tracking to be up 40% this year, in large part to moving to TV. They would have been up higher, but we didn't have solid crews until June.

With $182,229 in backlog and only doing 4k a day, it's getting tougher to be responsive to customers. My Manager and Secretary were arguing with each other today, and it was over scarce resources, which crews would be on what screaming customers. The answer is, that for Monday, they have 6k in jobs that people are threatening to cancel on they are going to do. They'll have to pull both Estimators to get that done.

I've increased production from 2.5k a day last year to 4k this year, but I'm going to need to make some changes to the crews to get to 5k a day. They just don't have the equipment to do the jobs, and I don't want to drop 100k going into Winter. So I'll have to hire more people instead of buy more equipment.

OneofOne_sl said:

My concern here would be accepting too much work too fast, and pissing off potential clients that will never be interested in working with you again. If you can't, or are unwilling, to build up additional crews, maybe it's time to slow down on the ad expenditures?

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If this were March, at what is considered to be the start of our season, I'd buy the equipment. But this is Winter. Every company in the area either lays off 50% of their staff, or goes to a complete shutdown. This work will get us to the start of that slow time, at 4k a day. Right now, I just want to build a buffer against Thanksgiving and Christmas. We are fighting Santa at that point.

We've gone two years without running out of work, but that's not with this many guys. I'm afraid to take my foot off of the pedal. If anything, in January, I'm even heavier in advertising, because ad rates are lower. For TV, I was able to get 25% more spots in Q1 because that time is soft for them also. I remember a time when we were on FOH, where we had one call in a period of two weeks in January, I don't want to go back there. This company should have been paid off by now, if not for the losses we've racked up come Winter time.

Right now, we'll have to just keep in touch with the approvals, and see who is in a rush, and who isn't. And then prioritize them. Communicating with the customer will help retain them. I also fired the guy that was going behind the crews on clean up, he was 50% too slow and got caught driving company vehicles on his own time. I need to hire another guy like this, and have feelers out. Personally, I believe having such a backlog isn't bad, it almost helps sell the customer that we are the best. I've discounted maybe two jobs all year, I have pricing power. In the past, in the Winter, customers have pricing power over us.

This high a backlog is unprecedented for us. The most it in any other year was 86k, and that was when the State was declared under emergency. Where we go from here is unknown, because this is when sales start slowing down. Only, they aren't slowing down. Of concern is that calls have slowed down, but in the same respect, approval amounts are up 200% on average. We are closing a higher percentage, and we are getting bigger jobs.

Bottom line: I'm not wanting to lay anyone off and will do anything to keep them on. I've finally built two good crews, two Estimators and a Secretary that are worth a damn.