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Professional Contractor
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Discussion Starter · #1 ·
Six months ago I had a specialty sub of mine (artificial turf) come to me saying he was shutting it down. I knew he had a 3 month backlog and did phenomenal work so I was thoroughly confused.
He said all the obamacare crap was killing him and he wasn't making any money. So I bought his equipment and hired him to run it. After looking at his margins I noticed they were all over the place. After further digging I found he was basically too nice of a guy to be in business. He was pricing his change orders AT COST :eek:

I have corrected his business and it is VERY profitable now. I feel kinda bad because he is doing ALL the work. I do not do ANYTHING except billing and payroll. With all the bills paid that account has close to 100k in it now. I don't want the business and I truly just bought it because I did not want to have to deal with an out of town sub.

I told him I would sell his equipment back to him for less than I paid for it and put him back in business.

I plan on keeping the profits in the account now. Am I being unfair to him?
 

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No. If he will accept it back and continue to run it the way you have, I'm sure he will thank you. But then again some people are better apt at doing the work than running a business.
 

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Absolutely not. First off, had you not bought the business and given him a job where would he be working,if at all?
I would keep the business. You made it work, and you're making money.
He has been relieved of his business stress, and now IS making money every week via his paycheck.
You saved him.
 

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Focusing on solutions.
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How would that be unfair? You put in the work to make it profitable. Teach him how to run it profitable & ease your conscience.
 

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.....

I told him I would sell his equipment back to him for less than I paid for it and put him back in business.

I plan on keeping the profits in the account now. Am I being unfair to him?
Unfair in keeping the money? No.

Unfair selling it back to him? prolly yes.

The best his business ran is when YOU owned it - 'nuff said.
Unless HE changes, it'll be deja vu all over again...
 

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Thom
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You probably nailed it, he was being to nice.

You have given him a set of work rules, this takes his "niceness" out of the equation but, if/when he is on his own, it will return and he will be faced with the same issues.

Really, most people should not own their own business, they lack the personality traits that will allow them to be successful. Working for you, he is probably less stressed, happier, and earning more. This is probably the best spot for him.

If you really want him to make more, give him a percentage but, that percentage needs to be tied to real performance. This performance is a function of customer satisfaction, sales volume, profitability, and cost (including equipment) control. Don't make him an owner but pay him and give him some of the responsibilities of owner/managers. You will probably both be happier.
 
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Maybe give him 50% or offer to sell him 50%. Sounds like for the business to be successful, it needs both of you...doing what each of you are good at.
 

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if youve made $100,000 in 6 months why would you sell it back to him?

what am i missing?

keep it and keep going....retire earlier, buy a new house or ZR1 vette

what you have going would be a dream to most of us here

id love to be in your situation...why arent you happy with $100k?
 

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Professional Contractor
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Discussion Starter · #9 ·
It's not a money issue at all. I really don't want the business. I truly only bought it for my personal convenience. Now I don't want it. I really had no long range plans when I bought it. I just kinda panicked because the only other artificial turf contractor here is TOTALLY flaky.
My main thing is I am already so freakin busy I can't even remember my last day off. I already cancelled my vacation this summer and I'm not happy about it.
The turf business is part of the reason I don't get any time off. The wife is constantly griping cause I'm working all the time.
I'm trying to make too many people happy
 

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Good for you on thinking of selling it back to him . Shows a real character in you . And I would spend 6 months or a year teaching help what he doesn't now and why he failed in the first place .
 

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Discussion Starter · #12 ·
His main problem is he is too nice of a guy. He does not understand the concept of "overhead cost". Great worker, great with customers, great with the crews. Just not a good businessman.
But he has learned ALOT. I'm still shocked he didn't know it before, but it is what it is.
 

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This space for lease
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Some people just aren't good at business and would rather just do the work. That sounds like where he is at. What about hiring someone to run it if it's profitable enough to do so?
 

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Six months ago I had a specialty sub of mine (artificial turf) come to me saying he was shutting it down. I knew he had a 3 month backlog and did phenomenal work so I was thoroughly confused.
He said all the obamacare crap was killing him and he wasn't making any money. So I bought his equipment and hired him to run it. After looking at his margins I noticed they were all over the place. After further digging I found he was basically too nice of a guy to be in business. He was pricing his change orders AT COST :eek:

I have corrected his business and it is VERY profitable now. I feel kinda bad because he is doing ALL the work. I do not do ANYTHING except billing and payroll. With all the bills paid that account has close to 100k in it now. I don't want the business and I truly just bought it because I did not want to have to deal with an out of town sub.

I told him I would sell his equipment back to him for less than I paid for it and put him back in business.

I plan on keeping the profits in the account now. Am I being unfair to him?
Often the stated reason for change is not the full or true reason. Blaming Obamacare is convenient, but doesn't hold water for me at all. If you give it back (sell it, whatever), the underlying problem will probably still be there. I suspect he likes his new position, breathes easier at the end of the day, etc. How about a partnership (not equal)?
 

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Livin the dream...
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NO WAY would I enter into a partnership with someone who has already proved that they can run a business into the ground.

Listen to any business teacher and they will tell you partnerships are ALMOST always a bad idea and at this point it sounds like you have no reason to take the risk.

If you don't want it. Sell it back to him. Show him why he failed.

I used to work for a guy who was out to do everyone favors and be their buddy. To nice of a guy to charge anything. If he made a profit he would give it back. He is out of business working a day job which is exactly where he should be. Nearly ruined his life trying to make the business work and he just either didn't have it or was unwilling to change his ways.

For the record, that guy had another very successful contractor mentor him for years and it went nowhere. Some guys just don't have it on the business end.
 

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Always Learning
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Keep the profit you made. You paid for the buisness, assumed the risk, and now get to enjoy the reward. If you don't want the business, offer to sell it back to him and teach him what he did wrong. Then if he runs it into the ground again, you can buy it for even cheaper.
 

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General Contractor
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Don't feel bad... Some born to lead and some born to follow, some born to own businesses and some born to work for somebody, simple as that.

I knew many who didn't know how to run a business, whether its being a nice guy, doing favors and getting burned, or treating everyone as a friend and lose money.... you give them advise and they will do better, but as soon as things start to roll, they thing you don't have to stay on top of things and they close the doors down the road.

Good luck with your venture :thumbsup:
 

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Particulate Filter
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Follow your own advice. Sell it back to him at a profit based upon your production of new business sytems and increase of profit. show him the books and then give him a time period to fly or die. If he messes it up again, retake it.
 

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you could hire someone to run the business....you just oversee things(a couple hours a week)....

if its making $$ i dont see why you'd dump it.....i make a very good living, but i cant imagine id turn down a chance to make extra $$....i understand the time issue....you cant work 18 hours a day.....id just look for another solution like hiring a manager
 

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Why not just give the guy a raise and hire some paper pusher who knows the business to run it and sit back?I think we all would love 100k just sitting in our laps. :)
 
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