Adventures with Lyrical: Buying a Business (REPOST)

Tarrant_sl said:

I know its only been 4 days, but any updates on this? If the gate malfunctioned do they have something that will take care of it? Insurance maybe? Also how fast did it close on your truck and how fast was your truck going to do that sort of damage to it?

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I'm going to try to help the customer out, but it's not our fault the gate malfunctioned. The company that put the gate in is working up a bid. And it is confirmed, the inspector said the motion sensors had fallen off beforehand. My employee drove through the gate, and the gate shut, and he was unable to move. The machinery kept pushing the gate until it was mushed against my three+ ton truck.

Ballpark estimate is that the fence (and the machinery behind it) will run 3k.

Yeah, I had the gate inspected by the company that put it in, and there are no sensors or failsafe. The customer is expecting us to pay for the gate 100%, I'm trying to tell the customer that isn't going to happen. They owe me $1k, and they are demanding I pay for the gate. This is going to head to court, if I can't talk some sense into them.

BrutulTM_sl said:

Seems like a gate like that should stop when it hits something similar to an elevator door for safety if not for it's own protection.

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I now have it in writing from one of the gate companies in the area that the gate reverser was broken. That is the failsafe. It's basic on these fences.

Wuwei_sl said:

A general advice would be try to avoid court.

As of now the focus is mainly on them blaming you and claiming you for money. I don't know the whole situation, but rather try to turn it around: show them the letter from the gate company stating that their gate was broken. So, first of all you don't see where you are to blame. Secondly, wanting to keep the 'good long term relationship' with them, you are willing not to sue/charge them for any (if minor) damages to your vehicle.

If there are no damages at all, you can convey a sigh of relief to them, mentioning how 'lucky' it was as your -expensive- truck was not damaged etc. Wrap it in some polite words, and they might understand that the unfortunate situation is not necessarily due to your truck. Not knowing the situation, or the people, this is just one possible option.

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I'll send the estimate from the company that installed the gate, let them read the letter, and then take it from there. Because these conversations are going nowhere, they want me to buy them a new electronic security gate for $3,250, when I was going to make $300 profit on the job. The estimate clearly says that the failsafe was not working, maybe them seeing it in writing will get through to them. This is something that homeowner's insurance should take care of.

Tuco_sl said:

The failsafe being reversed seems like a major liability for the gate installer. I'm surprised that the homeowner isn't pursuing a claim against them instead since they installed a gate that goes into CRUSH EVERYTHING mode when it impacts something.

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The company that installed it says that since no one from that address called them for yearly maintenance, they aren't responsible. If I were the homeowner, I'd be going after them, instead of me.

I sent the letter to them, we'll see what their response is. At this point, I'd rather goodwill them $500 to make this go away, even though we had nothing to do with the damage.

On a positive note, the phone is ringing like our busiest month of the year. Last week, we got 53 calls. On 53 calls, we generated about $29k in work. And this week, on Monday and Tuesday, we are pushing 40 calls already. TV is pretty much 20% of call volume, even on weeks where we aren't on. We made the choice to go high frequency, but to do that means that we run commercials only in the last three weeks of the month. If it keeps up like this, I'll need another estimator, and those aren't growing on trees.

Tmac47_sl said:

Punny.

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Not intended. But it is tough to find a good Estimator, that can bid both residential and commercial jobs and be accurate within 5% of actual cost. And then, they want like 10-15% of whatever they sell. Even now, I've had guys try to get commission of customers that have been with the company for years. We had a wealthy customer sign up for like $13k last year, and the first thing out of the Estimator's mouth is that he wants commission. But I've had that customer for years, and she's told me to my face, she'll only use us because she knows I'll make the guys do the job right.

Tmac47_sl said:

What qualifications do you look for in your estimators and how much do you pay them?

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Bare minimum, they need to have five years' experience doing everything and using all of the equipment. They need to look presentable, our wealthy clients bitch at us if we send a guy who is all tatted up, etc. They need to be good with customers and likable. They need to be trustworthy and self-starters, as there is no one watching what they do all day.

My Estimator right now is making just under 50k, and he's worth it. This is three times the per capita income of the small country town he lives in. It's also not bad for a guy who never finished High School.

The problem is that at most other companies, the owner does all of the bidding. We are getting too many calls for any one guy to handle. It takes about an hour to do an estimate (drive time, waiting for customers to show up, talking to the customer, answering questions). At 20 calls a day, he'd need to work 20 hours a day. He'd be ringing doorbells at 10 pm. Last Summer, we couldn't run a bid until two weeks after it came in, we were so backlogged. I've started delegating a lot of his responsibilities, but if we are this busy now, in the peak times it will be a nightmare.

My best bet, as always, is to find someone who wants to step up from being on the crew. Literally, last year, I ran into two guys that could do it, and both of them had a lot of personal issues (and were never hired). Both of them ran their own business, but ended up going under. All guys like that do is learn from you, and then they go re-start their own business the first chance they can get, and they take some of your customers with them.

OneofOne_sl said:

Perhaps if you spent more time justifying paying what you can afford, instead of justifying why what you pay is good, you'd find more interested skilled candidates?

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The issue isn't pay them more. The average laborer at another company makes under 30k a year (Managers don't get paid much more). Pretty much every company in the area shuts down for four months out of the year. Since a lot of them are paid cash, they can't even get unemployment during their down time. With my ad budget and reputation, I'm able to provide checks all year.

A lot of Estimators out there owned their own company, and then it went bankrupt. If they can't relate to people and sell them in their own businesses, they won't be able to do it in mine. They have these backwards business practices, and they are extremely set in their ways. They failed in their own business, and they won't change what they did wrong (I've tried).

My best bet is to find a laborer, and train them. But I need a guy who can be accurate, while exuding trustworthiness and having common sense. You never know what type of estimate you are walking into. Like yesterday, the customer was vague on the phone with the Secretary, the Estimator gets to the job, and it ends up being a job covering 18 acres. It ended up being a huge commercial job. The final price was $79k. You need a guy who can think on his feet and relate to all types of customers.

In five years, I've had five estimators. One of them moved across country to live near his wife's family (at threat of divorce). One started abusing drugs, and totally lost grip with reality. One went off to start his own business (and failed). One of them couldn't get along with customers and other employees (he yelled at them non-stop). After counseling him fifty+ times on his anger management issues, he was let go. One is still left and is doing great.

The common thing they all liked with me is that they made 30-40% more than at the competition, and they get checks all year.

Equity is not the issue. The grass is always greener. Yesterday, the company did $3,850 in service fees. Now that I'm staffed up, the number grows, and some laborers get insane with jealousy when they turn in their invoices at the end of the day. For the guys that leave, they don't want a percentage, they want the whole thing. After all, in their eyes, they are doing all of the work, and I'm doing nothing. That's what the guy said who went off on his own. He's discovered that there is a lot more to it than doing the work. Our busiest month of the year is August. He worked one day in August. You have to be able to figure out how to get customers to call you, everything else is detail work.

I'm probably going to look for a laborer at another company, and take six months to train him, and hope he pans out. That always works best for me.