Vashthestampede

iTrader: (17)

Things are heating up and not looking so good down at the shop and I need some advice on what to do. This may turn into a rant cause my brain is on overload right now, so please excuse me ahead of time if it does.

Family owned and operated foundation business here in CT. We do both commercial and residential work. Foundations, floors, retaining walls, you name it. We've done everything from underground water tanks and a Best Buy, to 2 car garages and housing developments. My dad branched off from his brother's (since passed away) concrete company back before I was born and has been running it since. The concrete company has been in the family for over 45 years now.

My father and his business partner are the 2 owners. One of my brothers is the foreman (he's 20 years older than me). The secretary is the partner's wife. The laborers vary between a couple to a dozen Brazilian guys and myself, depending on the workload. Lately things have been uber slow and I've moved on to my own thing, but I'm still down at the shop at least 3-4 days a week.

The past year my dad's business partner has been saying that he's ready to get out and retire. He's hinted it to my dad and brother, and outright said it to my face these past couple months. I like the guy, he's a good guy and is the one that taught me all I know about mechanic work, but he can be a major dick sometimes. Usually when it comes to bad mouthing the family. I've stood up for my dad and brother before and one time in particular it lead to the both of us grabbing each other by the necks. So I try to just let it go in one ear and out the other to avoid conflict, even though it just kills me sometimes to hear the **** he talks.

Now that the year is wrapping up, my dad's partner has come out and told him that they pretty much need to shut it down. My dad is 69 years old and is built pretty much just to work. He has a hard time hearing, a hard time sitting idle, and doesn't have a complete HS education. So basically when it comes to office work and computers, he's the last person in the world to have get involved, or would want to for that matter. My brother is also in the same boat. He's been working with my dad since before he could drive and lacks the same skills. Its worked for them all this time though because they have been the work horses and the "other side" has been in control of the office and secretarial work. IMO a mistake on their part for not getting involved years ago.

Now that my dad's partner wants to leave, he's almost giving my dad no choice but to close the company. Even though there is a choice, he's pretty much telling my dad that if he leaves, there's no way he can keep it going without him. This makes me furious. My dad has swung a hammer his whole life day after day, outside in the elements year after year, and is pretty much the reason the company is what it is today. The only problem is, he never once thought about what would happen if this day came. Apparently neither did my brother.

The other night my dad had a talk with me about maybe having me step in and taking over the business end of things to keep them going. This is how it was originally presented to me 8 years ago or so when I started working there. I've learned a little about going over plans, giving estimates, and our general operations in the office, but there's a lot I don't know. In any case, I'm willing to learn whatever it is I have to, but I doubt his partner will be ready with open arms to teach me the ropes if we oppose him.

The company itself isn't worth much dollar wise. The most expensive equipment we own are the forms. The trucks aren't worth dick, and everything else we have is just a collection of tools, parts, and garbage from the past 26 years at the shop we're currently at. Not to mention we don't own the shop, we rent our portion. So to me, buying him out is a joke and I feel like the only thing that's worth anything is the company name and rep.

My dad is a tough guy and wont act like something is wrong even when it is, but I know that he's lost on what to do. He talked to me a little about it and said he has to talk to my bro, but he doesn't really have much to offer besides the tasks that he already does for the company.

I'm wondering what I should do. I have great credit with one of my banks and could probably get a business loan from them if I needed to, but I don't know if I should. The family that owns the shop complex recently took it over after the old man passed away last year. The son and daughter are in charge now, and they are the ones that had me paint the building this past fall. I was thinking that I could probably talk to them about working something out with the rent for the time being, or at least until the spring when things hopefully pickup again.

Work just isn't coming in steadily ATM and now with this happening it isn't looking good. I want to do whatever I can to help keep the doors open, but I don't know if its too much to take on. The work is hard and its not the best paying job that's out there, but its in our blood. I like working in the rain, snow, sun, carrying forms back and forth all day long, pouring concrete and getting the satisfaction of a hard days work. I also take pride in knowing that we have such an awesome reputation with the builders we work for, but unfortunately, this economy is keeping a lot of those guys from building.

I have hope that there's plenty of potential for the company to keep going, maybe to even do better than it has in the past. With one less "main" paycheck to make out every week, and with the family as a whole more involved in the finances might be a good thing. I should also mention that most of the builders we work for now are older and ready to retire as well and I think its time for us to start advertising and getting our name out there to the new guys. I'm sure as **** that once we did a job for a new builder and they saw our work they'd want to keep working with us, granted if our price is right. That's usually how it goes, but we don't advertise at all. Everything we get is either past relationships or word of mouth. Nobody comes in saying they saw our sign, ad, website, etc, cause we don't have any of that.

I don't know, my mind is a blur of thoughts right now. I'm not sure if any of this came out how I meant for it to either. I guess I'm just trying to prep for tomorrow, seeing that I'll be working with the guy in the morning and I'm not sure if I want to say anything about it or not.

jacob300zx

Honestly do whats best for you and your kids/wife. Your father/brother will make it doing something else even if it closes.

rleete

iTrader: (21)

Your dad is 69? Time to retire and live a little. Close it down before you are forced to.

Stein

iTrader: (46)

Don't borrow money to keep it going. If it can't cash flow, it's a hobby, not a business. I know this is tough to hear and easy for me to say as I am not attached like you are, but you have to look at it like any business decision that you would make if you owned it already.

The other thing that I assume you are considering is "what would dad do for a job if it closes" and that could cloud your judgment. If "all he has done is swing a hammer" he may be better off trying to find a position with another company. I know that would be difficult given his age. I'm also ASSUMING that he doesn't have a pile of cash set aside to retire, so I'm guessing that he will have to keep working in some capacity.

kenzo42

iTrader: (6)

It seems if you invest in dads company, you'll be taking over the business when he retires. Is this something you want to do for the rest of your life?

Vashthestampede

iTrader: (17)

I myself am not married, nor have kids. I do however believe that I'm with the girl I want both those things with, so I would like to not **** up the future. So I get what your saying.

Mom and Dad had me 20 years after my 2 brothers and sister. I wasn't "planned" I guess you could say. lol

My dad's exact words earlier today about if the company has to close "it will be the death of me". He's not the retirement lifestyle type. His rheumatoid arthritis keeps him moving. He's in fear of his joints locking up and ending up in a wheelchair, unable to do anything like 2 of his brothers already have.

The cash flow is there. We have plenty of money coming through the accounts on a yearly basis, at least from what I've seen on quickbooks. Its really just this past year that's been the killer on the pocketbook. Between the insurance, rent, taxes, payroll, and overhead, there's not much room leftover for the company savings account. If they even have one.

My dad is a hell of a worker, but I don't think he could work anywhere else. This is what he's done his entire life, and I don't think he's ready to stop. Not to mention I doubt any foundation company would hire a 69 year old guy as a new employee.

Unfortunately my parents have made some rather poor investments over the years between the stock market and real estate, so they don't have much of a pile, that I know of at least. Just from the worry in his tone of voice almost tells me the answer to that. I really don't think they planned for this day.

miatauser884

iTrader: (11)

You've got your own family to deal with. Are you willing to gamble their future on this. The good thing is that your dad is 69, so he can collect SS and he is medical costs will be covered under medicare. Help him fill out all the necessary documents so he gets his checks and health benefits. We pay in so good people can get what they need.

yellowihss

iTrader: (20)

Holy ****!
I almost thought someone was writing about me. I am in the same boat as you my friend, with a few little differences. My dad is an electrical contractor, and has been running his own company by himself for the past 25 years. This year has been a pain in the *** for him and he has since decided to retire.

My brother and I have decided to take over where he left off, and hopefully do it without a hiccup. This will be taking place in March or April next year, so there is a lot of work to be done from now till then. Over the past few months I had to think long and hard about whether or not do it, and this is how I decided.

Is the company profitable, and has it always been. This was something I talked to my dad about to get an idea of how cash flow has been over the years. We determined reasoning why profits were up or down for a given year. What was going on, would it happen again, or did you learn from a mistake. In the past 25 years almost every year was profitable, but always took a lot of work which leads to the next question. How hard are you going to work to keep the business going when times are hard, and you’re not taking in as much as you like. I know there has been times when my dad has put in ridicules hours, and nothing extra in return, but when you in business for yourself, that’s the name of the game. My dad has almost always made good money with his business, but he is also the hardest working person I know.

I will be graduating soon with a BBA, and decided this was for me. I don’t mind working long hours, and with my brothers help I think we can make it happen.

If you think the money is there, and you have the clients to keep the company going, I would go for it. There’s no reason to let a company that old go under just because 1 person leaves. You might have to put in long hours, but that is something you’re going to have to learn to get use to if you planning on running a business.

Vashthestampede

iTrader: (17)

I agree that I need to make sure I don't put my future in the toilet by taking on something that's just going to **** things up for me. Luckily right now I have no kids, and I'm not married. Not to say I don't have plans for both things when the times right (I'm only 26), but I really don't have anyone to hurt but myself. And my unborn awesome son! lol Thanks for the kind words man.

I agree that hard work is necessary to work for yourself. Look at me now, its after 11 and I'm still working. ****.....I'm always ******* working! lol

The one thing my dad gave me was good work ethics. I look up to him a lot because of it. Even still at his age he's out pouring concrete and finishing slabs in the freezing cold and pouring rain. I don't know a lot of guys that could keep up with him. He makes me want to work just as hard as he has all these years to look back and see what I've accomplished. That's really the main reason why I don't want to see him lose it all. He's worked too damn hard for it.

There's profit to be made for sure. I don't want to give the impression that its a tanking company like that. This past year things have been slow but were still probably close to the 7 figure mark for the year. Granted, that's paid out to material cost, payroll, overhead, etc etc, but I can only imagine what a good year brings in. Like I said, I REALLY wish my family thought of this a long time ago and stayed involved with the financial part of the business.

The main problem I'm dealing with now is the guy wants to just shut everything down, no questions asked. He wants to retire and move on with his life. I don't blame him, that's his decision, but I don't want to see him make up my dads mind for him. My dad just doesn't know what he should do. I think he's scared to take on everything on his own, even thought my brother and I will be there for him, I don't know if he can handle the pressure.

I'm hoping we can have a family meeting this Sunday. I'm sure it wont go well, but things need to be said.

Joe Perez

iTrader: (8)

Forgive me if I missed something obvious, but why would you need to take out a loan? Is the partner requesting a buyout?



When the Perez family left Cuba in the late 1950s, my Father (who was already in college at the time) moved to Spain to continue his education, while his three brothers came to the US along with their mother (their father did not survive the exodus.) As they had left with literally nothing but the clothes they were wearing and a few suitcases filled with heirlooms, the three brothers settled in New York for a time to earn money working menial jobs, which they used in part to pay for my father's education and in part to stockpile capital for a new life.

After a time, they all moved down to Puerto Rico, and started a wholesale textiles business, as they had worked in this trade in the old country. Perez Brothers Inc. The business was highly successful, and they lived comfortably.

My father, meanwhile, graduated from medical school and emigrated to the US mainland, met my mother, became a citizen, etc. I was raised as an American, in a wholly English-speaking household, and while we frequently visited the family in Puerto Rico, I always felt like something of an outsider. As a result of this arrangement, I grew up feeling as though I was somehow in the shadow of greatness, envious of the rich family heritage which, because of the linguistic and cultural barriers which existed, I knew that I would never be a part of.

In the late 1990s, the brothers decided at last to retire. Like your father, their business held essentially no assets beyond the merchandise in the warehouse and the relationships which they had cultivated throughout the island. As my cousins had all chosen to pursue professional careers and had no interest in inheriting the operation, they decided simply to close the doors and move stateside.

I've always felt a sense of vague unease about this. As though a great era in the history of our family simply flickered and died out, mourned by no one. Would I have been happy spending my whole life as a merchant of fabrics and thread? Would this lifestyle have fulfilled me? I expect that my views on this subject are perhaps irrationally romanticized.


Is this something that you would enjoy doing, particularly in the knowledge that you bear the great burden of carrying on a family legacy? Would you regret eschewing this opportunity?

Construction is one of those few trades that's never going to be outsourced overseas. On the other hand, I have absolutely no idea what life in Danbury, CT is like, and whether the construction trade is likely to remain profitable there for the next 40 years. Some towns wither and die, and woe be unto to those who are tied to a specific geographic area when this occurs.

wannafbody

iTrader: (1)

It depends on the legal structure of the partnership. Chances are that you guys would need to buy out your dad's business partner or else he needs to give up his share of the business. If he really wants to retire he might be willing to give it up seeing he seems to be willing to shut it down. Whatever happens make sure your lawyer takes care and makes sure all the details are worked out.

Vashthestampede

iTrader: (17)

The first time my dad's partner made mention of this to me, I asked him what I would need to do to keep things going. Jokingly he said something about a buy out, but this was on a Friday night having a couple beers with the guys, so I don't know how serious he was. Since then I haven't brought it up, mainly due to the fact that I don't have a pot to **** in when it comes to what he'd want for a buy out.

At the same time, I don't know if its fair for him to want to be bought out. The only asset we truly have is the name and reputation. Everyone that uses us loves us, and has for years. I grew up knowing some of these builders pretty well and they have nothing but great things to say about my dad and our work. I feel like a buy out would be a dick move on his part and I wouldn't even know how he could come up with an accurate number to put on his half of the company.

Doing this isn't so much to continue any legacy, but more so to keep it going for my dad. I know that if it shuts down things will be bad for him. He works 6 days a week, at least 10-12 hours a day. If that's taken away from him....he'll go out of his mind. Its also for my brother too. He has a wife and 3 kids. I know he'll **** when he hears that all of this is happening and reality strikes. Granted its not my place to watch out for my older brother, but I feel like him and my dad cant do this on their own.

I worked there for a solid 5 years straight. Averaged 60 hours a week year round. I loved it. I mean I truly went home feeling good about my day. At the time there were days that I hated my job, but who doesn't feel that way sometimes. I guess now that I barely have anything to do with it anymore it makes me miss it, and now I see a chance to go back and help things for my dad and bro at the same time.

We're in CT, so there's a lot of demo work with newer, bigger, fancier houses going up all over the state. Plus we travel to NY as well for a lot of modular work. The only problem is making sure we're the guys the builder picks for the job. 9/10 we are, but that's with the people we've been working with for years now. I think the company is losing major potential business by not advertising, and that's something new that I can bring to the table.

Ideally I'd like to see him just give up his share. I feel like it would be the honorable thing for him to do. All the guys down at the shop know who does the work and who sits on their ***. So for him to start demanding a buy out for his "half" would almost be like a joke. But nonetheless, I understand that there's a legal side to this that may require us to do so, which would really be a shame.

Thanks for all the advice so far guys! Somethings going to happen by the end of the year, so I guess I'll know within the next 16 days what the deal is. I'm not religious by any means, but this feels like the kind of thing I would say a pray for if I was.

Torkel

It is sometimes painfully clear how different the world of business and the world of emotions/family can be. Unfortunately, only things like reputation, assets, network and such actually count when it comes to money. History is not on the list, unless it generates any of the above.

In my previous job I was involved in closing a German factory that literally had been running for over 100years. It was the AEG factory in the beautiful brick building in Nuremberg. It survived (loosing ) two world wars and still it meant nothing when we could open a brand new factory on the polish countryside, filled with low cost polish labor.

On a side note: People can be ******** and then people can be smart *** holes. Sometimes when you dislike someone, it is hard to accept that they actually have a point. Consider that the partner could be right and that his contact, personal skills with customers and such actually are essential for the company.

My point: It is not easy, but try to make the decision with your business hat on, not with your emotions.

Good Luck!!

sixace

Interesting. Couple of points,

1.) So the partner just wants to shut it down and walk away? Fine. Let him. Just sign over his portion of the company and he is free to go retire.

If he wants to walk and shut down, what are his terms? Liquidate the inventory and current holdings/assets? Then get an appraisal and chop it up (buy him out).

If the assets are inconsequential, then he should not care. Just have a lawyer draw up papers divesting him from ownership/liability. Another tactic would be to offer a small, limited term fixed annual stipend of some sort as a buyout..

I would be very wary of taking on additional debt/loan for a buyout. Avoid this if possible

2.) Is this something you want to do for a living? If so, go for it. You have the customer base, even though it appears to be potentially heading in the same direction. Thus the need for your expanded marketing. Get all of your current customers on board with recomendations and start networking with them. They will be passing on their business to someone at some point and should pass your company's rep as well.

3.) Again, Is this something you want to do for a living? If so, and if you have not already done so, take a crash course in running a small business. Search the web, take a class at community college, whatever. Learn quickly about insurance, legal, accounting, business plan, inventory control, finances, LLC, etc.

Let others swing the hammers and carry the forms. You'll need to RUN the business. It sounds like the partner and his wife were doing that while dad and bro did the manual work. Both are equally important, however in a sucessfull business, the office side is IMO a bit more important.

With the limited info, my impression and suggestion would be to go for it. If it fails, what have you lost? Personally, I would rather fail trying my best instead of never trying at all and still failing.

Nothing comes easy. Risk is around every corner. Take charge of your life at all times. If you never fail, you have not tried hard enough.

Here's hoping nothing but the best for you and your family. What seems to be a dark moment could actually be a golden opportunity. Everything happens for a reason..

Joe Perez

iTrader: (8)

This, to me, sounds like a pretty good endorsement.

Is there some other grand vision that you had in life which this is going to interfere with? Were you planning otherwise to attend Juliard, become a chef, join the Marines, or move to Bombay, India and become a movie star? Something that, if you're running a concrete business 20 years from now you'll look back on and say "Damn, I really wish I'd followed my dream"?


sixace pretty much summed up any observation I might have had on the matter. If the status of the business genuinely is a legal partnership, then the other fellow should have a clearly defined ownership stake, and that's just the way it is. I'd feel wary of taking out a $200,000 loan to buy him out, but if his only other option is liquidation, then you may be able to negotiate with him.


This is about the point in time where I'd consult an attorney to see what your options are. Here is a list of Lawyer Referral Services in your area which are approved by the American Bar Association: http://www.abanet.org/legalservices/...main.cfm?id=CT They can help you find someone who is qualified in this area, and initial consultations are generally very inexpensive.

rleete

iTrader: (21)

If the assets consist mainly of the good rep your dad has built over the years, parley that into something. Either you run the place, and let them continue to do the field work, or you find someone to run the front office. That may mean the competition.

You go to another firm that does either the same stuff, or where you would fit in to complete their specialties. So, you either find another foundation company, or one who does, say, driveways and parking lots, but not concrete. Or a home builder who subcontracts out the foundations. Partner up, and have your dad stay on as working foreman. You supply the name as a selling point. So, where your company is Vash Foundation Works, you now are General Contractors/VFW partners. You sell what you have, which is a customer reference base, and your good name.

Newbsauce

iTrader: (2)

There's two points to be made here that we all seem to be getting to:

1> Do you want to do this for the rest of your life? It sounds like yes. If yes, then proceed to to number 2. If no, shut down the company and help your father/bro find employment.

2> If you want to remove the partner from the equation you are going to face some hard discussions. In buyouts partners and owners traditionally overestimate (due to emotions) the value of their company and you will be hard pressed to bring this individual to a clear understanding of the value of his stake. You will need to have the value of the business appraised and decide if it is worth a buyout - generally the factors are liquid assets and accounts (receivable/payable). When purchasing a company you are most often buying the accounts themselves. Its hard to know what you have from an accounts standpoint but you may also consider re-branding. Since some industries are so personal your father/brother may have personal relationships with your builders. It may be less difficult to simply "close" one business (i.e. Vash Concrete) and open another (i.e. Vash Foundations) with the assumption that your professional contacts understand whats going on.

sixace

Outstanding idea/option.

webby459

iTrader: (8)

I've got a bit of experience in buying into/out of partnerships. My advice would be to dissolve the partnership and divide assets amicably among the partners. Often, the departing member has an inflated perception of the value of the good will left in a business of this sort. That would mean that he would expect a large buyout, which will (trust me) become detrimental in ongoing operations.

On the other hand, if you dissolve the partnership amicably, WITH NO SIGNED NON-COMPETES, you guys can parlay your experience and contacts in the business into other opportunities, as has been mentioned previously. The bookkeeping and office duties that your uncle and his family does has less value than the human capital of what is the foundation for your business. The office duties can be contracted to others, the core business cannot.

Vashthestampede

iTrader: (17)

Jesus guys. Thanks a ton for all the great advice here.

I couldn't right back at all today cause I was down at the shop the whole day with my dad's partner. He gave me a hand replacing the rear suspension in my Taurus and then we had to throw a new wheel bearing in one of the company Envoys. What a ******* pain in the *** to replace the rear strut assemblies on that car. Thankfully though, between that and a new wheel it drives damn near perfect now.

When I came back form the auto parts place with the wheel bearing, my dad was inside the landlords shop (that's the bay that has the lift I use) and the tension was so thick I could ******* feel it in the air. The two of them were in there, but nobody was talking. Granted, my dads hearing is worse than usual right now, so that's probably a factor. Even still, thats not normal for the two of them.

He started talking a little bit of **** this morning about selling all the trucks and equipment and I just couldn't keep it in and I said "what are you talking about selling off the trucks and equipment? Why would we do that?". He went on to talk about how its the only thing to do and that my brother and dad will just have to figure something else out. I said back to him "well, I know my dad isn't ready to stop working, and neither is my brother. So whatever we're going to have to do to keep things going for us is what we'll have to do. I'll help them figure it out". He didnt say too much on the subject after that.

When I was locking up at the landlords garage, the owner stopped by to put a new battery in his truck, so I hung around to bs with him and give him a hand. I mentioned to him what was going on, and I made sure I told him that it was a delicate subject and that I cant really speak too openly about it because I don't want to overstep my boundaries just yet. I more or less just wanted to give him a heads up of whats going on. He was totally cool about it and said that my family has worked too hard to make the company what it is and if my dad's partner wants to leave, just show him the door.

I also saw my brother tonight and quickly mentioned everything to him. He told me that he had no idea this was even going on, which I already knew, hence why I was telling him. He has no idea what to do either, he just wants to work and not have to deal with this bs right now. My whole family will be together on Sunday and I don't give a ****, I'm going to bring it out into the open with everyone present. There's not much time left to make a decision and I want to make sure that the right one is made, and that someone else doesn't make it for them (me included).

I really just want whats best. I know I can be a major ******* ******** sometimes to my dad and brother, but I really feel like I need to do something to help them. At the same time though, I need to make sure I don't do anything that my dad doesn't want me to do. So far it seems like he's comfortable with my ideas, but I'll make sure I double check with him before I go running my mouth on Sunday.