Herman School of Business
Buddy's Tale
Last night my wife and I hit the local Diner for a quick bite to eat. Thursday night is our night to attend an auction so she can stock her antique store. The auctioneer is rather slow (another blog posting should be coming about how he runs his business) and they had glass cases full of jewelry which she doesn’t buy, so we ducked out for an hour to eat. At the Diner the man who owns the company that built our swimming pool nine years ago saw us and came over for a visit.
Buddy is a big guy of about sixty who started digging in-ground pools for people twenty-nine years ago. During that time he has grown a small concern into quite a nice business with a fleet of service trucks, hundreds of satisfied customers with pools costing as much as one hundred thousand dollars, and a beautiful commercial building where you can buy supplies and see the latest in Spa equipment. He sells more than just recreation, he sells a comfort and life style product.
Each year he grew a little and as the economy boomed Buddy could take exotic trips, even to his photo safari in Africa, about the time we built our pool. I kidded him that we just needed a “swimming hole” not the wonderful landscaped, stone oval pool he put in for us. He was making people happy, and they were happy to pay for it. The entrepreneur who was never afraid to jump on the Bobcat and dig the hole, or climb down into the hole and bend the steel rods before hitting it with “shotcrete” to finish it off, deserved the success he was having, because he worked extremely hard to make it. His wife was always involved too. She answered the phones and works at the store day and night. Ahh, but the success was worth it.
About a year or two ago Buddy had an offer. A man wanted to buy Buddy out of his pool building and service business. The new commercial building was the final testament to Buddy’s success and the man making the offer wanted it for other purposes. The buyer would keep the pool building and service side of the business and change the way products were sold and Buddy would walk away with a rather large profit in his pocket. The big guy was getting tired of digging holes in the ground. His weight had ballooned like his bank account would, IF he had sold. He didn’t.
Buddy couldn’t face the prospect of seeing his company in someone else’s hands; his new building changed to a copy supply outlet and the trucks with his name prominently displayed going down the street under someone else’s ownership. Why would he sell when he had just hit his 27th consecutive year of growth?
Because the price offered was great. Because he could have spent the rest of his life enjoying those trips he loves with his wife. Because if he sold he would never have to dig another hole.
Last night Buddy told my wife and I that this year, his twenty-ninth year in business will be his worst year ever. WORST EVER. He will actually lose money and he never did that even in his first year of business. And that buyer is no longer interested because the banks won’t lend him anywhere near the price he was willing to pay eighteen months ago. My wife said Buddy looked tired. And scared. He should be looking at a work schedule full of orders to build new pools. He doesn’t have many on the board. He has laid off workers who never ran out of work until this season.
This is just the beginning folks. If a buyer is knocking on your door right now hang onto him like there will be no tomorrow. There will be fewer pools built this year. Fewer houses built. Fewer cars sold. But there will be many more people like Buddy wondering why they thought that the economy could only go up and never down.
AUCTION NOTE: YOU CAN GO TO WWW.COMLY.COM AND SEE THE HOUSE BEING AUCTIONED OFF ON 4/19 IN SWAINTON, NEW JERSEY…THE ADDRESS IS 25 LORD LANE.
- Posted: 11 April 2008
- Comments: 0
- Category: Business failure
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