Adventures with Lyrical: Buying a Business (REPOST)

You guys were right. I found a college grad that had like a year experience in our industry. Actually, his tryout day was horrible, as he possessed none of the skills he claimed. But something told me to try him out at estimating. Apparently, he had enough experience to be able to accurately price bids. He also has a very trustworthy face, which is a plus for sales. We tested him over two days, and he got pretty close to mine and my Estimator's bids. I developed a pricing guide for the simpler jobs. He sold $3k on his first day today, closing like 65% of the people he talked to today. And he's got a business degree, so he comes across as very intelligible. The simpler jobs will be done by him and me, the more complex ones will go to the Main Estimator.

Tarrant_sl said:

Awesome man, glad you were finally able to fill that position. Hopefully it'll be a long term deal for ya.

Any news on the douches that own the gate?

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It's been great. With two Estimators, I can step back and do some planning. We picked up $9k today, and only 800 of it was mine (call in from a bid I ran the day before). All I did was train today (I hired four new employees this week).

As far as the gate goes, they lawyered up, so we are in a holding pattern. I'm not sure I want to fight a protracted legal battle over 1k.

So having two Estimators is great. The guys have picked up $5,800 today by 2:30 pm. The only thing is that the young guy is new at it, he is making some mistakes. He offered to pay for one, I told him to let it go. It's going to take ass reamings by the laborers to get prices correct. They don't like it when their job is tougher.

Tmac47_sl said:

Time to add a new line to your contracts or something. What are you planning on doing?

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Adding a new line means nothing when the other party says you are negligent. That's what they are claiming, even though the gate shut on us.

Tarrant_sl said:

Which is why you should not let them walk on you and win.

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The problem is that the guy who was driving it was fired last week. My Secretary was out sick, the phone lines were down, and he waited three days to tell me the phone line was out. When people called in the on AT&T line, it told them that the line was no longer in service, and sent them to three of my competitors. So some people just assumed we went out of business. He just sat there collecting a check. He was a friend of my Manager's, and that was the only reason why I put up with him for so long. That was the "straw that broke the camel's back." Given our average call volume dropping in half, and our 50% close rate, and average ticket being $762, we lost at least ten thousand dollars, so there was no choice. Also, given the choice texts he's sent me, I have a feeling that in a court of law, he'll flip on what he said earlier.

edit: by phone lines, I meant our main phone line that we advertise on TV, Billboards, Radio, Internet and Yellow Pages. We have like five phone lines, so we did get some calls. I've changed my cell to only call in on the main line, instead of the phone line that no one uses, so I can catch this.

Tarrant_sl said:

Hmmm, yeah bad timing on that firing.

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There's not much I could do on that. The guys all new it happened, and were looking for a response. Anything less would have been a sign of weakness. He pretty much had become the butt of all the jokes around here from the other guys on the crews.

So the college kid has picked up over $13,000 in service fees in his first week. Friday was 2k, Sat was 1, Mon was 5k, Tuesday was 0, and then he did about 5.5 yesterday. We are able to be more responsive in giving bids now, and have less customers griping. I was worried about whether or not it would work, but he does have one year industry experience, and he's pretty smart. I'm getting customers complimenting on him on his bids now, which is pretty rare. Some of his prices are a little off. He ran a bigger job, and had my Manager give him feedback, and he was 1/3 too high. This stuff happens in the beginning (as it did with me) and all you can do is listen to the crews' feedback and adjust from there. We are trying to give him the simpler jobs, and leave the more complicated jobs to my Manager with 17 years of experience.

We are starting August with just under 80k in backlog, so I'm hiring. I hired a skilled guy, so I can now hire another unskilled guy.

Things are good, except the bank that did my loan, who I haven't spoken to in years, is telling me that my line of credit will not be renewed past Oct 24th (my five year anniversary of owning the business). I haven't touched it since I started the business five years ago, but it's always nice to have almost 200k available in case of a rainy day. So getting this fixed is now my #1 priority. What has separated us from the smaller companies is our deeper pockets, ability to weather the storm, and ability to do bigger jobs. We've done jobs that have been 100k, and the customer pays four months down the road. That particular customer held 10% of the job for three years (it's standard in their contracts). Regardless, I'm going to have to start restructuring our contracts to get paid every 30 days.

Eomer_sl said:

Because they're a bank. It's just what they do. We hadn't touched our line of credit in years and all of the sudden a couple years ago the bank started asking for a bunch more paperwork and documentation to maintain it. The banker that serves us was apologetic about it, but some faceless bureaucrat somewhere had changed some requirements and we had to comply to keep it in place. We drew the line at them asking for personal guarantees and told them we'd pull all of our business with them if they required them. They backed down on that.

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For our line of credit, it was set to implode every five years, but the guy who did my loan said it would be reupped for another five years. Now I'm being told that they don't loan to people not in their imprint, and the nearest bank is 400 miles away. So it's just a a stupid bureaucratic rule. We've been profitable in those five years, never missed a payment to them, and now that we are within spitting distance of getting the loan paid off, they are screwing with us.

I've gone off on a hiring binge, and I need to spend time training, but now I've got to get this fixed. It's also our busiest month of the year traditionally. I need to be working instead of securing a line of credit.

The way this is structured, they'd rather me tap the entire line of credit now, then to extend an LOC that has been basically untouched. This is what the underwriter told me. I don't want to make payments on an LOC, I just want to know it's there. It's really screwed up.

BrutulTM_sl said:

Bankers don't make money on you if you're not in debt all the time. My banker is constantly calling me asking if we need an operating loan etc. Of course then as soon as you do owe them money, they're up your ass about whether you're going to be able to pay.

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Pretty much they are telling me is borrow it all or we are shutting it down. I don't want to borrow it all, I just want the option to borrow at a future date. They are supposed to get back with me today, as they are reconsidering it.