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Yesterday was not a fun day.


Perchoutofwater
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Yesterday we announced to our employees that we will effectively be closing our the doors to our business next Wednesday. Our business has been around for 65 years. It was a very hard decision to make, and while we were willing to take losses for the entire year, the outlook for later this year and next year does not look good. Rather than holding on and losing all that we've worked so hard for over the years we've decided to close up shop and cut our losses at $500,000 for this year. We will be keeping some of the office staff on a little bit longer to help wrap things up, and probably will not be completely closed down until the end of the year in order to take care of any warranty obligations that may arise, as well as to keep insurance available to our employees during that time.

 

I know that this is the right decision based on the current construction outlook in our area, though both pride in our family business and our affections for our employees (average length of employment 17 years) made it a very difficult decision. I'm not sure which was more difficult, telling my kids and grandfather of our intentions or telling the superintendent that has worked for us for 33 years. We will be offering all of our employees a nice severance package, and have contributed heavily to their 401ks, and have also promised them that we will do all that we can to try and help them find employment elsewhere.

 

Had it not been for Obamacare I'm sure that we would have had a profitable 2011, but honestly that probably would have only delayed this decision by a year to 18 months. We waited to see which local municipalities and school districts were going to hold bond elections in May, as the deadline to announce bond elections was March 15th, and there are only going to be 5 local bond elections totaling $75 Million. Most of the projects would take 6 months to plan and a year to 18 months to construct. I question if any of them would have passed, and even if they did, and we were fortunate enough to get them all they would only cover roughly 1/4 of our overhead during that time frame based on the fee rates that are being bid today. I don't see larger commercial construction in our area getting back to a healthy level until 2014 at the earliest.

 

So, I'm somewhat depressed, and have had quite a bit on my mind over the last month or two. I hope those that are in leagues with me, particularly in the dynasty leagues can forgive my inattentiveness. I think I've announced in all of my dynasty leagues my intentions of not returning next year. I do still plan to stay in my keeper leagues and redraft leagues.

 

I'll be fine financially as I've made some good money through the construction company over the last few years since I've started to buy my father out, as well as having been fortunate in other investments. I'm currently considering several opportunities. I probably will not be doing anything for the next month while I wait on a feasibility study to be done on something me and my brother are considering going into together. Based on the preliminary information we've received this would be more profitable for us 6 years from now than the construction company ever has been. The only concern with it, is it would require both me and my brother to basically put up our life savings to do. Assuming that the comprehensive study is as favorable as the preliminary study I'm going to be all for that, but I'm not sure how comfortable my brother who is more fiscally conservative than I am is going to be with it. Right now one day he says he is all for it, and the next day he is not so sure. If that doesn't work out I'm looking at about 5 or 6 other options of opening or buying different businesses, as well as possibly working for someone for the next four or five years and then when the construction market gets better opening a residential construction company or smaller commercial company that isn't as heavily regulated and scrutinized as our company.

 

I'm sad that we are closing the company down, both because of the family pride we have in it, and it is all I've known since I started working here when I was 13 during summers and school breaks. It is what I majored in when I went to college, and what I thought I would do until I decided to retire. I'll miss our employees, and working with family if me and my brother don't end up pursuing that opportunity mentioned above. At the same time I'm somewhat excited for the possible change. I was getting tired of trying to keep up with the ever changing regulations in the industry, as well as the ever increasing exposure to litigation and regulation that we were seeing due to the relatively high profile projects we were doing in our area and our presumed deep pockets. Frankly I was starting to get a little burned out, so a change in career is welcome, particularly since most of the things I'm considering have far less exposure and regulation associated with them.

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Wow, Perch, sorry to hear, man. I know it has been tough out there, such a damn shame.

 

Hope everything works out in the long run.

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One door closes, another one opens. Sounds like you are well-prepared financially, and are going into this transition with the right mindset. All the best to you, your family and your employees in their future endeavors.

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That stinks. Sorry to hear about that.

 

If it were me I'd probably be leaning towards this:

 

 

.... as well as possibly working for someone for the next four or five years and then when the construction market gets better opening a residential construction company or smaller commercial company that isn't as heavily regulated and scrutinized as our company.

 

 

Good luck. I hope everything works out for you and all those affected by the closing.

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That sucks hard, especially considering it has been a family run business for 65 years. Sorry to hear, but hopefully you'll be happier in one of your new ventures and you are young enough to grow and prosper in that new role. I also hope this wasn't coming out of nowhere for your employees as a week's notice to a hugh change like this for employees that average 17 years in your company could be devastating (not earthquake/tsunami/nuke Japan devastating, but you know).

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That sucks hard, especially considering it has been a family run business for 65 years. Sorry to hear, but hopefully you'll be happier in one of your new ventures and you are young enough to grow and prosper in that new role. I also hope this wasn't coming out of nowhere for your employees as a week's notice to a hugh change like this for employees that average 17 years in your company could be devastating (not earthquake/tsunami/nuke Japan devastating, but you know).

 

I think all of them saw the writing on the wall. They all know how bad the industry is right now. We talked to them last June or July as well as last November after the November bond elections and told them how bad it was getting, but that we hoped something would cause it to turn around. The employees are going to get a very good severance package equal to either 4 weeks pay or a percentage of their pay based on years experience, which ever is higher. The guy that has worked with us for 33 years would get 33% of his annual salary. Since we are still very solvent and don't need to sell the equipment right away, we told them that the could keep their trucks for as long as two months or until they get another job whichever comes first. We also told them that if they wanted to borrow any of the tools or equipment we have to do stuff around their houses they are welcome to use them until we get ready to sell them. When we do sell the trucks, tools, and equipment our employees will also be given the chance to match the best offer we receive on them. One of the guys already had is resume ready and has already been hired by one of our competitors. Another plans on starting his own residential roofing company with the idea of getting into commercial roofing in about 5 years when the commercial market picks up. There are really only two or three employees I'm really worried about primarily due to their age or financial circumstances.

Edited by Perchoutofwater
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+1

 

While you're a butthead on a couple occasions, I do know you are a man of conviction, and I can only imagine the drive and dedication you'll put into any new venture.

 

Best of luck to you and your family.

+1 :wacko:

 

Construction is a grind man, so you never know. You might look back and be really thankful you got out of this industry. Another option might be to stay in the same industry but move to an area with a better economy. Just a thought but I'm sure you guys have looked around. Good luck bro.

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Regulation can grind any entrepreneur into dust. Someday, I may tell my story...

 

As long as you hold your "things" loosely and are ok w/ a change in lifestyle, you have little to worry about. Its the people who hold onto their stuff and get all emotional about not having or being able to do "whatever" who have real emotional problems during these sorts of tumultuous moments.

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That sucks man. Making that kind of decision must have been extremely stressful. It seems that you have taken it upon yourselves to take care of your employees and I applaud you for that. It's getting rarer and rarer that this happens now-a-days. Loyalty to an employer/employee seems to have fallen by the wayside. I hope nothing but the best for you and it seems like you have a firm grasp on the future.

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Ditto on the previous sentiments. I have friends in the construction industry for North Texas and it hasn't been good for a few years now for them either. As a fellow business owner, I can imagine how painful and disappointing it is for you but it sounds like you guys are going above and beyond in doing the right thing and you should be very proud of everything you have done and are doing. Change is a part of life and it isn't always fun for sure but you're equipped to keep it positive regardless.

 

It gets better, bro...

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