Adventures with lyrical - buying a business

Snugglebear said:

How do you deal with your employees telling their redneck cousins about your wily ways, giving your competitors a tip-off?

Click to expand...

By wily, if you mean business practices, they don"t do that. A lot of times, we are competing on bids, and they know that if their family member"s company wins, they don"t get paid from it. There is a reason why they don"t work with family members. If they share business practices, it will be after they"ve left the company, but they never seem to get it right. Like they do a yellow pages ad, and it"s the smallest one in the book (I"m in the #1 spot, meaning I have the largest ad and get more calls). Or they put up a billboard, only it"s the smallest and cheapest billboard available, and they do it in areas where no one can afford their product. They don"t have a half a brain, and they"ll never figure it out. I might drop $1,200 apiece on billboards, but it"s in the high income areas, and we measure the hits and know they are producing a decent ROI.

What I"ve had to worry about in the past, is that a family member with no equipment might have a huge job. Then they offer my guy $500 to borrow my 100k truck on the weekend, when we aren"t working (unless we have emergency work). The last guy that took a truck out on the weekend got shitcanned as an example, and then went up the street making half the pay. They never really think about how I"m the highest paying guy within 100 miles before they screw up major. The guy was so bad off after he worked for me that he lost his house and had to sleep in his pickup truck. And then the pickup truck got repossessed. Here"s an idea. Don"t steal and keep your job paying you double what you can get elsewhere, and then you don"t become homeless.

Tuco said:

To the cynical posters: Lyrical sent me undeniable proof that he is who he says he is and that he"s an owner of the business he describes.

Click to expand...

I wasn"t sure what to think when you asked for a picture of my cock next to an FOH sign. Is that the normal process for verification?

opiate82 said:

It is sad but employee theft is a problem that never-ever goes away. I am constantly dealing with it. While I rarely have problems with money not making it into the till, it is little self-entitlement issues that are always cropping up. Not paying for employee meals, hooking friends/family up with free food, etc. Every couple of months I"ll notice food costs are creeping up, the amount of employee meals being rung in will decline, and I"ll have to spend a couple of days figuring out what is going and bring the hammer down.

And then things will be better for a couple of months. Then despite the fact they know I will dig into it and will find out exactly what is going on, they become complacent and the whole process starts over again.

Click to expand...

I haven"t had any incidences in over year. When it happened, I cut the guys and told them they would be next if they did it. And when my one guy who was a Manager went homeless after being fired, I again told the guys before they try to steal, make sure they are looking at what other tree companies are paying. So he was used as an example again.

The guys I have now are honest enough that if they get pulled over by a random customer for a bid, it makes it"s way to me. I"m doubling my advertising budget next year, so I"ll need to hire new guys and weed through the thieves. It also helps I"ve moved to the office and can pop in at any time to check out the equipment on the weekend. We"ll be moving to another office that has cameras up everywhere, that would really deter them from doing it. One of these days, I"ll get some GPS trackers on all of my trucks.

One of my competitors, who is smaller, just supposedly just finagled his way into a $64 million contract! Last year, I decided to focus on wealthier customers who have lots of land and can drop 5-20k without batting an eyelash. He went the route of clearing lake routes. I knew the bid was open last year, but we stay booked a month out, so I passed on bidding.

I don"t know how he"ll do it, but it has to be all done by the end of next year. He"ll probably make 50 million, even though he"ll go from five employees to 30, and have to drop a million in new equipment. We are the largest in the area, and he"d need 100 companies our size to do that much work in 52 weeks. He"s telling residential customers to go elsewhere, so he"ll be out of that business (no one is going to wait a year), but if you are making 50 million in a year, who cares?

Let"s just say we are putting our name out there again with the cities and state agencies. I have a general mistrust of this type of work, given that their budgets can go to 0 in a week if politicians deem it not worthy. One state job we did for 60k (it was a State Park), literally went out and got a million dollar budget for what we do, they had us as their primary, and then the budget got erased. There was also a big FEMA job, and they offered me 1/8 the market rate, so I declined.

If I could only go back in time .

P.S.: He is also prone to exaggeration, but one thing is for sure, customers are telling me he won"t do their work unless he"s making a mint. He"ll walk if he doesn"t get 50% above market.

Blazin said:

Edit..Someone was calling you out as a fake? I must have missed that.

Click to expand...

That along with every racial slur in the book, but Ned carried out sentence.

Blazin said:

Oh and back on business topic, I met with a banker today to start my long road towards learning to spend money. Told me I can get 5% fixed 20 yrs up to a million for real estate as long as I put 20% in. Haven"t borrowed money in a long time but was hoping for lower but he told me that is the lowest they"ll go on a fixed commercial loan.

Was a smaller bank, more headache probably going to a big bank but could probably shave some off that rate.

Click to expand...

Wow, it used to be only 10 percent down. I"d shop it at a larger bank.

So, at this rate, we are pushing being booked until the third week in November (just under a 50k backlog). We had 25 calls today (our average is 8-10). And I"m putting a billboard up on the main street with all of the Corporate HQ. I"ve got a lot of big construction jobs bid, and another 40kish job I"m expecting from a housing association.

Other than having a lot of equipment repairs and being undermanned, things are pretty good. December starts to be our slow time, but with the timing of everything, we"ll be pretty solid for our two slowest months of the year (December and January). At this rate, these months will be 50% higher than our last five year average, and we should turn a slight to moderate profit.

I think I"ve smoothed out demand with the advertising, and we have had some help from construction actually picking up in the second half of this year.

On Christmas Day, I want to be smiling. Last year I was, but every other year my ass has been sore. I think it will be a good Christmas. And next year will be better, now that I know what moves the needle. For every $1 we spent in advertising, we brought in 6 in sales. I"ve got a better billboard, Internet and radio strategy, and I think I"m going to do TV next year. I was interviewed for 30 seconds by a local station, and we got some calls just off of that interview for estimates. One million in sales (non-emergency work) is the goal. At that point, half of that is NPBBT. And that is after paying myself.

Tmac47 said:

Mind elaborating on your marketing strategy? I know you were having pretty inconsistent sales and then decided to go all in on having "too much" business. Where are you spending marketing dollars and what sort of ROI are you seeing in each sector?

Click to expand...

We had inconsistent sales for about 6-8 months, when every construction company that didn"t have work tried to do what we do. They couldn"t do it, and went under. Since I"ve increased our total dollars in advertising, sales are up 50% for the company, and it"s been a pretty consistent spend $1, get 6 back this year (last year was 5, but I didn"t have estimators with good sales skills).

As far as the breakdown goes right now:

Yellow pages #1: 1k a month
AT&T: 349
NPR: 480 (average income is like 90k+, don"t knock it)
Phone Book#3: 130
Lots of small books: 100
Billboards (three of them): 600, 1,200
Internet: 450-500 a month
Newspaper: 200

And we are moving to:
Billboard 3: 1,200
AT&T in a town of 150k (that we"ve ignored): 379
Other radio: ??? (I"m working getting us on several radio stations that have a high HHI)
digital billboards at the wealthiest country club in the state: 250

As far as ROI, all I do is know we are up 50%. We measure what comes in on various sources and what approves, but that"s not always good data. For instance, billboard has provided a noticeable lift from the minute I put each one up, but what has increased is our Internet and yellow pages hits even more. Why is that? Because they see us on billboard every day, and then when they need us, go to yellow pages or Internet. We do get about 5-10 hits a week from billboard, but intuitively, the real number is higher. 80% of our customers that I bid jobs, when asked, saw our billboards. But they state they saw us in the yellow pages or Internet when the Secretary asks, because that was the last thing they used.

What I try to do is put up a new medium, and then measure the results. But as time goes by billboard and radio hits go down, but those hits move to other mediums because the customer has a higher awareness of us. They initially see our billboard maybe six months previous, and every day they drive by, they see us, and then when they need us, they call us. I can"t believe it works, because I don"t read billboards and listen to satellite radio, but from looking at customer behavior, there are a lot of customers that do. Plus, I"ve done things to make us stand out (like actually designed a good billboard, most people design their own and don"t do any research, the same with radio).

I wish it was a science, especially being a guy with a background in Finance and Accounting, but it is not. It takes intuition. Intuitively we have consistently had our backlog go from 3-4 days to 3-6 weeks since I started doing this. My competitors still have the 2-3 days backlog, because they are still depending on yellow pages as their sole means of getting customers. Some of them have no work, and are literally going from door to door trying to sell work all day. A couple of competitors have started using my colors .

The old owner of the business used to say only use yellow pages, because people call when they need you, but that"s not true. For some inexplicable reason, the actually pay attention to billboards and radio ads, and when they use us, they go the phone book or Internet and ignore the competitors, and call us directly. I know this from the Internet keywords they are using, new customers are looking up our business name directly, and when I talk to them, they say the saw/heard us somewhere else, and then looked for our names directly.

I"m still learning as I go, and this is kind of fun. I"ve also start networking more by joining a country club, and I just picked up my first job from a member there who owns a landscaping business for 875. I"m working on doing more networking also.

I"ve taken the attitude that I"m not going to act as if we"ve been around for 50 years, but act like we just started the company yesterday. It"s going to take that attitude if I am going to double sales next year. I"m busy as hell, and haven"t touched an MMO for more than two hours a week, but I"m having fun.

What a week. We are getting so backlogged that I"ve tried to hire four guys. Two of them never showed up to their interview, even though they told me how bad they needed money to feed their starving kids. One of them worked at another company where my workers have family. And my workers were told that he was fired because he would just sit on the job and watch everyone else work. One guy, who had four years" experience, showed up and freaked the Secretary out, because he had no teeth and looked like he was on crack or meth. He gets done with her interviewing him, and then he harasses me to get me to hire him. I tell him that since it took half a week for him to come in for his interview, that I was giving another guy a trial day, and then he might be next. So he proceeds to cuss me out with every cuss word in the book. I tell him, "Good luck," and then hang up.

We ended up going with a young guy who has no skills. I"d rather take a guy with a good attitude than a guy who will flip out and cuss you out. Literally, when I told the guy to give it some time for me to make my decision, he tells me to, "Go fuck myself" and "Take this job and shove it up your ass!" at the top of his lungs.

We"ll see how the young guy does tomorrow. Is he the type of guy that is going to let them all do the work, or the type of guy that will be in rhythm with the rest of the crew? We"ll see. He"s certainly been the most respectful and has shown up when he was supposed to.