In Bad Need Of Business Advice.

realpurty2

EDIT* I pulled this topic back down because I forgot to post a follow up. After the attorney had a chance to do the financial due diligence, the other company was too far gone to salvage. We wrestled around with several ideas to try to atleast help out but couldn't find much that would be even a drop in the bucket. We ended up taking a few of his unfinished projects and getting them done as subcontractors. Last I heard, he's still trying to put it all up for sale.

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Woman in a Man's World.

Pearce Services

The thing that stands out to me is the poor crew performance.

Would you be up for a little experiment? Ask your friend for a chance to be his sales rep for his next promising lead, get the job, your way, order materials, supply job notes your way. Then sit back and watch to see what the crew does with a well organized opportunity. It will be a chance to see the potential of his crew. I think if the crew has any potential, that you should offer some type of compensation. If they choke, I would not take the company if he paid me.

RobertF

How much is the equipment worth? If it's less than $30k, I'd offer him the difference. I know it doesn't sound like much, but I can't see it being worth much more. How many employees does he have or is it just him? If it's just him then all you are buying is the name and I'd offer to take it over for free and use it as a DBA of K&R, no since in paying the taxes for two businesses if both do the same exact thing.

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-Robert F

Tscarborough

It is just business until emotions get involved, then you are screwed. Offer him a job as a superintendant or foreman if he can run work but can't handle the business end. His assets are worthless, and his customer list and "goodwill" is useless if you operate in the same area and have built up a quality reputation.

Jonesey

RP, I think you've already made your decision. The numbers speak for themselves. Are you ready to take on 30K in debt for contacts that you have to know he'll take with him? Contacts are personal relationships. Besides, do you really want his contacts and his customers if his business is in that bad a shape? Sounds like it might mean some severe headaches.

I understand that he's a friend, and helped you out when you needed it. But the fact is, he's a big boy, and has run his company his way for a long time. Wether or not you feel personally indebted to him is irrelevant. Whether you can shoulder 30k in debt is quite relevant.

Listen, it's always a bad idea to give or take free advice. It's never free, and usually costs too much in the long run. I think you already know what you have to do to protect yourself and your family. That's what building your own business is about for me. Money is just an extraneous plus. Taking care of my family comes first. That sometimes means I have to let people go (usually when they steal from me) or force them out.

It's for this same reason that I refuse to hire my lazy brother. I did that once, won't do it again. It's bad enough when I'm not related to people who don't want to work but want a fat check anyway.

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Steve Jones
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Jones Painting Feel the difference service makes

phinsher

RealPurty,
To me it sounds like the opportunity here is in the other GC's "connections". Don't forget to figure that into the equation. Taking on his $30,000 in debt that could likely be repaired in a year but gaining lots of new customers could be an incredibly worthwhile investment. Maybe buy him out, hire him as a sales guy, keep him in the loop, pay him well and profit like heck.

Guess it comes down to real numbers and the potential that exsists. You're the only one that can judge its worthiness.

dirt diggler

Realpurty

Disclaimer -- I am NOT an expert in anything except for "hanging in there." And I don't even consider myself anything above being a "journeyman" when it comes to business. I'm not even old enough to be called a businessman. Hell, I got called "boy" the other day

But, I'm good at being objective --- well, most of the time

I think the above quote says a lot. Your company is debt free. His is not. Yeah, anything's possible --- but you have to, for yourself, find your "comfort level," as far as risk-taking goes.

First of all, is it worth the risk? Sounds like times are good for your company right now.

Second --- I get the feeling that this is almost entirely an emotional-fueled decision. Emotions have no place in such a decision. I know he's your friend --- but YOU DID NOT cause his problems. In fact, I think he PUT YOU in a very awkward situation. When people are drowning, they'll pull down who ever is trying to save them.

Oh and by the way, don't let me sound so high and mighty here.. This would be tough for me; I get myself in unfavorable/unnecessary situations because i do let emotions take control sometimes.

and I've REALLY got to start learning SOON that it is not good to work with friends.

I dunno, you'll think of something --- but don't poke a hole in your ship while trying to patch his.

Mike Finley

I urge you to do your best to remove the emotional aspect of all of this before you let it cloud your decisions and end up doing something you will live to regret. I would buy your former boss a beer and wish him well, I believe you will be further in the long run if you remain focused investing your time and money into K&R, the opportunity costs are tremendous at how K&R will suffer as you devote too much time, energy and financial resources to save this other sinking ship, as you said you are already spread too thin as it is now, keep focused on K&R.

Good luck whatever you decide.

ProWallGuy

I highly agree. I learned long ago:

Friends are friends, and bizness is bizness.

Never mix the two. Its nothing personal, its just how it works. I personally think his business is worthless $$-wise. If you feel for the guy, and your claim of his skills is true, hire him on as your super, and give him a good salary/future. THATS what friends are for.

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Digital Murals Installation

copusbuilder

Doesn't sound too positive from this end either.

I had a friend try to sell me his business years ago for $10,000..it was a phone number only in reality. I said "sorry no"!
He was upset and dumped me as a friend but....maybe that was for the best

Everything you have said points towards the negative side. Use the force Real Purty.....Listen to the force

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AkA Richard Cranium

MichiganNewGuy

I echo the comments about offering your friend a job. If you could use him in a capacity where his skills shine and his weaknesses don't come into play then you have done a good deed for a friend and yet not slit your own throat business-wise.

Business-wise, is it not in your best interest for a direct competitor to close shop? If you offer him a job and he does not accept, at least you made an effort to help him out. A true friend would not want you to help him out by slitting your own throat...

Melissa

IMO it's impossible to seperate emotions when it's a friend. How akward would it be if you turn his business into a very profitable one, especially if he started to work for you. I think it would be very uncomfortable. Unbearable IMO, even if you were to pay him very well. But that depends on what kind of person he is and how attached he was to his business.

I think it also depends on what exactly is putting him at $30k in the red, is it just truck loans or does he owe subs?

Ken@K&R

I think we should just get a seat on the front row for the auction. The only thing I want is the bobcat, dump trailer, and 7x14 enclosed trailer.

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Ken

dirt diggler

I kinda think Dirt Diggler's on the money with that

new haven

Else has said business is business. Offer him a supt. job with a very good salary and I would expect his contacts will come with him, they know and trust him they will follow him as long as he stays in the trade. Buy what you want at the auction....This is just my opinoin

Should you decide to buy his company make sure you apply for a new fed tax no. you have no idea of what his situation is in that area. I have heard a horror story of a guy who bought a company kept the name and went on using the tax number and guess who THEY came after.
Good luck whatever you decide.............Walt

AtlanticWBConst

My thoughts,

If he does end up folding everything....it is unfortunate.

Now, on the other hand, it will leave a 'void' for his customers. They will still be in need of a GC. If you were involved with his other jobs previously and they were happy with the overall work....then, you got you foot in their door anyways...without having to pay him and assume all his debt anyway.

My point is that these customers, clients, and businesses that become affected by his 'closing the doors' - will now be looking for a new company to do business with anyways.....

...and there YOU guys are...

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Grumpy

My father has a saying. No good deed goes unpunished. If you are going to hurt yourself to help this guy, why bother, unless you have unlimited financial freedom and can afford to do so.

As you said business is business and if it's not worth it, it's not worth it.

Patty

Well purty, if the mayority rules, then your decision has been made.

Seems the general concensus here has been, "Don't do it."

Ands.... seems the 'other' half of K & R only wants the guy's 'toys'. (Perhaps Ken's vote could count today! )

I'm with the majority. Don't Do It! Ask yourself, "What's in it for me?" These guys are right. Friendship is friendship; business is business.
Unless I've missed something here, I just don't see what GAIN your business would have from this potential venture.

copusbuilder

Yeh, and think the weight it will take off your shoulders right now. Say screw it and go out for dinner and a bottle of wine

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AkA Richard Cranium

Double-A

Purty, you stated you doing this guy's admin when Ken started out, and are still doing his admin.

My question is, what drove him 30K into the red? Is this simply a matter of bad management decisions? Or drawing too much money out of the company?