Posted by: guinness222 | December 2, 2008

“Ok, let’s play chicken!”

     While I’m writing this post on Tuesday, December2nd, I’m going to delay it for some obvious reasons.

     Last April I went to take some courses in Orlando and met a gentleman interested in acquiring a Florida Property Management Company, and someone to run the whole thing for him. We struck it off ok, and I said, “Why not buy the one I work for, it’s relatively small, the current owner is an immature, overindulged 28 year old, but he’s not stable enough  to really know how to build a company, he says “Fine, let’s put it together, and if you stay on and run the whole thing I’ll give you 25% and $50,000 a year plus expenses.” (YEA ME!!!!)

   I go back and broach the subject with my boss, he has interest, so I give him the shopping list of things and information we need to put something together, he says ok, he’ll get to work on it, and have it by next week end. By then several of the accounts he had acquired in the previous six months were beginning to make significantly more demands on both the Company, and myself, to the point that they were occupying 100% of my time, day and night, stupid demands, and attitudes that we were simply their slaves, not their Association Managers. One of my accounts , with whom I had a very good rapport, was very perceptive and could see the “train-wreck” coming. The President took me to lunch to confirm I was overworked, had zero administrative supprt staff, andthe accounting folks were totally inept to count to ten with thier shoes off even! He went back and wrote my boss, the owner, a letter telling him point blank that handling the number of accounts I was given, the type of bad accounts that no one else could even step up to handle, andeverything else he was observing, that he needed to get a support team in place for me. My boss, (“Mr. ‘I need to make $10,000 a month personally, after all I’m single and have a lifestyle to support’) tells him the experienced guy, “a/k/a ME”, is fine, no worries andhe thinks I just need to spend more time on the accounts personally (aaaah, DUH, without any support staff I AM spending every waking moment and getting buried,….you greedy idiot!)

        Now about a month before that an account he has had for two years and handed off to me because it was “too far for me to drive to”, called us both over. The Developer of the project tells him, I’m doing a wonderful job, much better than he actually did, his bookkeeper is mentally challenged andwill not even return a phone call, or answer a question, but won’t pay any attention to me when I ask her for specific information, therefore he’s terminating the contract withour firm. He went on to say it had absolutely nothing to do with me, as I was the only person responsive to his requests and that I knew my shit. My bosses comment at the time as we walked back to the car, “He’s an asshole, he could have just called me instead oif making me drive all the way over here to fire us.”(Mature, heh?)

      Well the association that wrote him the letter about getting a support team for me waited four weeks then sent him an e-mail telling him since he was not going to see that I was properly supported to manage thieri account, they were moving their account to another firm,…in 30 days. He calls me in the next day and tells me, and tells me he is going to take over two other of my accounts personally, and I’m off this account that gave notice, and we are not doing another thing for them. Then he tells me that becasue of the account that gave notice a month ago, and this one that just gave notice, andthe fact that he was going to take on two additional accounts of mine leaving me with only four accounts, that it was not feasible for him to pay me any more. He said he really wanted me to stay on, and would continue to cover my healthInsurance premium out of the two accounts I brought to the company over the past six months (the only ones that were running like a clock, the ones I had been managing for three years BEFORE coming with him, etc.) and would pay me by the hour for any other work he gave me, but he couldn’t pay a salary any more.

      I sized it all up, asked him if he  was serious about selling the firm, to which he said he most assuredly was, and I decided I would see it through even if I had to use my own savings and retirement funds, But I did not tell him this, just that I’d stay on. I began pushing harder for the information we needed to formulate a buyout, it can in dribs and drabs, handwritten, very vague, etc. (His Uncle was the “godfather” of this kids business and a pretty shrewd real estate negotiator) SO I told him the buyer was getting a little frustrated and wanted the correct, detailed, information now. (I was purposely keeping him working through me so I could verify information going to the buyer as correct) He  delayed a bit more, so two weeks later I went in andinsisted we have a conference call with him, his”godfather”, my buyer, andmyself, it was now mid July. The conference call went well, both he and his uncle knew I was dead serious as was the buyer, and they promised all the information I had been requesting, plus a new laundry list we gave them of Tax returns, copies of the contracts, etc. would be forthcoming. (I’m sure at this point they ran checks to see if the buyer had the money, which he did, and since the economy was “tanking” big time, it would not be a bad idea to cash out, because “Cash is King” in any recessional situation. It took them three weeks to get the info together, I verified it all , sent it on, met with the buyer, gave him my evaluations, and we scheduled a trip for him to come down for an “eyes on” look at the properties and the offices and employees, besides me.

      The trip got delayed by two week s because of one of our little “Hurricanes”, namely IKE, he came down looked at everything, liked what he saw and he decided to go put the deal together. With in a week he had an offer which we collaborated on, put together for me to review and present. It was a very good offer for 60% of the face value of his contracts, with several different payout options. (Needless to say “the Kid” says it’s not enough. I pointed out all his contracts had 60 day cancellation clauses, exercisable by EITHER side, so there had to be a decrease for that alone, plus it was also plainly evident that a few of the accounts were personal “good ol’ boy” friends of him and his uncle and the probability was they would bail out at the end of the year anyway. He went, talked to his Uncle “godfather” and came back and accepted our offer, and the payout package we really wanted him to accept (50% at closing, the remainder over a 24 month period in equal payments this was a do-able based on the cash flow of the business alone. So the buyer went to the bank and we waited. The bank gave us a 30 day guarantee of the funding, but they just wanted to verify everything. We are now the beginning of September. (Remember, I’m living out of my savings and retirement money, and the stock market which they are in, is headed south faster than a “Snowbird” in December!)

     Three weeks later, October 1st, he calls me in, to let me know that the two biggest accounts, the twohe took away from me to handle himself three months prior because they were “a piece of cake” , had just given notice they were leaving at the end of the year! This accounted for approximately 20% of his revenue stream, so I told he we would have to revise the offer, and I’m sure he understood, since part of what we had asked for was a realistic assessment of how many and which accounts were going to renew for 2009. (All accounts renew automatically unless they give a 60 day notice in advance, so October 1 was the “drop dead date” for cancellations without “liquidated damages” or a negotiated payment for cancellation outside the normal renewal period.

        I called the Buyer, we agreed these were both accounts he had sworn to us were a dead bang shoo-in renewal, no problems, they were happier than pigs in slop. Apparently they weren’t. (I still had good relations andcontacts with several of the Board Members of both accounts so I made a couple of calls to see what the problem was, and why they gave notice. HE was the problem, they all told me the same thing, he had no experience, really wasn’t interested in “doing” the job, just getting paid for it, andhe ignored any questions they had or calls that they placed to him. (I had to ask if they were also dissatisfied wi y service during the six months since they came with us that I had managed them. To which they both said NO, I may have been a “hard nose” but they knew where things stood and inevitably I was always right and knew my business. And then they all asked me why I wanted to give up their account! WTF!!!! That’s what he had told them, I wanted off their accounts and he would have to handle them personally!)

       Well I went back to the buyer and he recomputed the offer, and (I totally agree with him here) he decided to reduce the amount paid at closing from 50% to 25% because it was evident there were some unhappy folks in “the flock”, and we could not risk losing any more. In six months or so we could keep them based on our demonstrated service levels andresponses to them, but the first six month we needed not to “bleed” anymore revenue than had already occurred. We sent him the revised offer andhe promised to meet with “godfather” andget back to us on Monday, no response on Monday. I fired off an e-mail to him, chatted with my buyer, and we decided to give him until December 1st. Finally yesterday he gets back saying the Thanksgiving Holidays, the number of Annual Meetings, yada, yada,yada. But he’s going to meet with his uncle “godfather”  yesterday and get back to us.

      (Now meantime my M-1, and M-2 supply (money credit) is beginning to become eclipsed (used up and hidden) by my OS-1 component (OS-1 = the monthly bills and expenses, commonly called the “Oh Shit” factor)therefore I set December 31st as my “end of game” date. I needed a regular paycheck or my own company up , going, andproviding ME with some money, or I would be in a “DDD” situation (Deep Doo-Doo).

So in the meantime here’s what I’ve been doing.  I had met with a competing firm who is small , pays significantly better (30% more) has never lost an account in fifteen years, has a waiting line of accounts that want to come aboard, and firmly believes in further education (see, all those courses and little letters after my name,..someone finally got it right!) They said they wanted someone after the first of the year, January 2nd to begin, and they would let me know if they wanted me, but the word was all good.

      I also got an e-mail from a Company out of Texas, looking to replace one of their folks on a very prestigious property and they called and asked  me for a Resume, and if I’d be interested, to which I said yes, sent the resume, and am waiting for thier call “about the middle of December, we like to make changes the first of the year.” Plus my own two stalwart accounts which followed me to where I am now, have both told me they will go with me as my first two customers, just give them the word (unfortunately they are only $24,000 in business and I need a minimum of $50,000 to make it go,….and I’m looking for more now, but until it happens it’s too long a stretch to make.)

      So we are approaching a “point of convergence”!

      So why tell you all this? Simple. Yesterday I left the office about 4:30 to head to the Pub for a pint and see what the experts attribute the stock market “crashing” AGAIN to today, and watch “Crazy Kramer” of “Mad Money” I strongly advise watching occasionally, he will have either a stroke or a massive heart attack live and in color,…this puppy is wound way to tight!!

       As I pull into the parking lot the cell phone rings (he is programmed to a unique ring so I can be aware, “Incoming boss call” (He and my wife both have separate rings for ID purposes!) here is the conversation;

       “Hey, It’s me, what’s up?”

       “Ah,…I just got a call from Mary Smith (owner of smaller competing company previously mentioned).

       “Oh yeah, what’s she want?”

       “She called me as a professional courtesy, she said she met you socially a week or two ago and you were thinking of changing jobs and going with her.”

       “Oh yeah, well yes I do know her, and met her a few weeks ago and we talked, but,……..(trail off)”

       “But I thought you were going to stay with me, we talked about it, remember, last June?”

       “Oh yeah, I know, but seems to me you told me you would be dumping the bad bookkeeper as soon as we moved, that was July, and she’s still there, and you told me you would be able to get me back on a regular salary by the end of summer, that was August, and that as soon as you got an offer for the company you’d put me back on Salary, let me see, that was mid September wasn’t it, and here we are December, winter, and I still don;t have a paycheck from you.”

        “Well I’m going to make those changes and tell the bookeeper there’s no room for her after December 31st, and we can talk in January about a salary, I promise, but I mean losing two more accounts, the deal is not closed yet, it leaves me in a real tight situation, you know?”

       “Sure I do, I’ve owned businesses myself, for over twenty years, but I’m not feeling any love here, and my savings and retirement and the national economy have just about tapped me out, you know?

       “Well I could loan you some money if you need it.” (Surely you jest!! You can’t pay me, but you can loan me some money? Sounds like indentured servitude to me, what do you think?)

       “No I don’t want a loan, I want a paycheck, a decent one, and it has to be in my pocket by December 15th,….latest.”

       “Well can you put off this Mary Smith until say the end of December, and we’ll talk in the next week or two?”

       “Sure I can, but remember the movie, “Jerry McGuire”,…it’s show me the money time. If she offers and offers me good money I’ll let you know and give you a chance to match it,…oh and all offers are one year contracts, no week to week stuff, that’s not negotiable.”

      “Well we can talk tomorrow when you get in, ..maybe we can go to lunch and discuss it.”

      “We’ll see. See you tomorrow.”

      Now what’s a man to do?  Somehow I smell the fresh scent of Bull Shit in the morning. Oh he also tells me the “new” offer, cutting his money at the close to 25% is most likely not acceptable to him, I told him talk to his uncle godfather, a “bird in the hand is worth more than a toasted bird in a burning bush” Times are tough and in a service business it is ALL about the service, the real service, not the lip service.

        So here I am whizzing down the tracks at two hundred miles an hour toward a train wreck, life can sure be a bunch of fun, huh?

        Screw it I’m going to publish this, I trust you folks. None of you are any relation to “the Boy King”, are you?

       Incidentally I took and IQ test over the weekend since I hadn’t taken one since I was like 12, and the old adage is true, the older you get the smarter you get It came ut at 140! (So why am I always near broke, screwing with shithead bosses, and such a big sweet loveable guy?

       Have a great day. It’s 930am, I think I’ll head to work, (note to self: wear hipboots, it could be deep!)

-30-


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