It's been a strange weekend, in the sense that I am not better physically, but such positive things are happening with the new business, it's definitely put me in a good mood. (I suspect that the medicine is working, but it's a 16 day thing and I'm only on day 5.)
The partner and Carl talked -- he's buying enough stuff to rig out two complete "units" for a start, because between what Carl already knows he can land as a client and what this guy knows he can land, it's more than enough work to make a nice profit. He's the kind of guy that has so often gone beyond the imagination when it comes to taking care of those friends he loves, that he's always more than fair, so ironically, I -- the uber worrier when it comes to money -- have not even sat down with him to discuss some of this. Instincts -- I know what he's offered to do so many times in the past, and he's the one putting up all of the money, so if he wants to do that, I figured he would want the split, after costs, to be somewhere around 70/30 or so, because hey -- he's putting up all the money. We are in no way obligated to pay him a penny if the whole thing goes belly up. Well, he called Carl today and told Carl he wanted to meet with the both of us because while he wants Carl happy, he definitely never wanted to "tangle" with me. (Which is just so funny, because this guy is shrewd -- and old enough to be my dad, easily.) So that was a nice thing, and then the next thing he said was that he wanted to split the profits and the company 50/50. With us still not owing him a penny if it flops. He's that convinced that this is a true money-making venture.
He's already invested (by ordering some equipment we need today) -- a half-a-million. I very nearly had a heart attack, but that's what the set-up costs and I know that's why there isn't any real competition out there -- there's just not a lot of people who know about this or who would put up that kind of money. And success is possible as much because of who we've built as a client base all of these year and our reputation with them.
He said he figures the business will operate at a loss for an entire year and if we wanted to completely stop the construction company, he'd pay us what our living expenses are out of the start-up capitol because he wanted to make sure we weren't in a bind while the company grew. Of course, we'll still be doing some of the construction work, but it will hit a point where we cannot do both and if that business isn't in the black yet, we would need that sort of cushion. (I keep saying "we" -- but seriously, while I may help with some client sale prep in the very beginning, it's something I wouldn't have to work for.)
Tomorrow, I'm going to talk to the national office person for our biggest client. The local district guy has already said we can certify all of his items (which is about 100), and we already have our little secondary client lined up with his items (he has about 30)... which means we have more than enough to just about break even on the first year before we start. But the national office has somewhere along the lines of 1000 items, and the local manager guy seemed to think they may want to do a national contract -- like a five-year thing.
I'm not going to keep boring y'all with all of the details in future entries until it's something concrete - particularly since I can't name the item because there aren't may google hits to be found with that search string and I don't want to pop up on it yet, but it's a reality that we're going to be giving this a shot.
It's clear to me that our life is about to radically change over the next few months. I don't know if this opportunity will work (for certain -- I think I'm sure, but you never know the guerilla warfare that can go on behind the scenes of a business until you're in the jungle)... but I think it's the first time in our lives we have a legitmate "big" opportunity. That so rarely comes along. And, we're not going to shut down the construction company until it's clear the other one has already taken off, so no worries there about losing both and then being screwed.
My dad, ever the devil's advocate, wondered what was in it for the partner, but when we sat down and looked through all the expenses, how it would be paid back and the time-frame, it's a no-brainer. He's going to make good money without actually working... he'll just finance it. And the work for Carl will be about a hundred times easier than what he's ever done.
Can it fail? Certainly. We could not land the biggest contract of all and have to scramble to pick up each client independently (which the competition is doing successfully now, and we can under-price / provide better service than they can)... I don't know. But I'm amazed at the opportunity.
Anyway, very odd weekend.
Posted by toni at April 25, 2004 11:35 PM