In this episode, Keaton Turner delves into a listener's struggles with a Tennessee rock quarry contract, highlighting financial strains from unpaid invoices and litigation. He discusses challenges with payroll, vendor payments, and dwindling savings, sharing personal stories of business hardships. Keaton emphasizes avoiding risky customers, understanding contract details, and knowing when to halt work. He explores monitoring customer payment reliability and avoiding unhealthy business relationships. The conversation includes steps to move forward, the importance of transparency, managing finances, and considering equity sales, while stressing self-awareness and resilience.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
What's up, Keaton?
I appreciate the, the shout out on my lastvideo I sent you.
I've been wanting to send you this video for awhile.
Been a little hesitant on doing so.
Getting a little personal, but you've beenrequesting everybody kinda send the send in
questions or just just anything anything aboutmaybe your insight on some stuff, your input.
(00:28):
It's a little little background.
I've been in business going on eight years.
Last year, I had about 30 employees.
I had three three utility crews and a coupledirt crews.
Now I'm down to about just under 20 employees,one utility crew, and three three side work
(00:52):
crews.
September 2024, I came in contact with a guy inTennessee who had just bought an old rock
quarry that he was looking at looking atgetting back back running and selling rock out
of.
So we signed the contract and agreed to stripoverburden and crush rock for this guy.
(01:18):
It's private on quarry.
Nothing nothing crazy.
It is in in Eastern Tennessee.
Long story short, I'm sorry if this gets longwinded, but it's it's kind of a long story.
We get up there in September 24, go to work.
(01:40):
And keep in mind, this is three or four hoursaway from home for us.
So this is this is a big this is a big, bigleap for us.
So we get up there.
We we're up there, you know, two to three weeksat a time until December.
We're we're stripping over burden.
We're helping him, you know, build build anaccess road, this, that, and the other.
(02:03):
While we're gone on the weekends, he's takingadvantage of equipment we have on-site, using
it for his own benefit, using our fuel.
Eventually, I pull I a meeting together withhim and kinda let him know where we stand and
that there will be an amendment to thecontract.
(02:25):
And keep in mind, this whole time, this isthree, four months going by.
We have not seen a penny.
And he still has not got his scale house done.
His scale is not operational.
He has not sold not one ton of rock out of thisquarry.
And I've invested a couple $100,000.
And keep in mind, I'm a I'm a 5,000,000 lastyear, was a $5,000,000 company.
(02:50):
$413,000 is what this man owes me.
And I'm sure you can guess how much that has aneffect on on a on a $5,000,000 a year company.
Anyways, we're we're I've hired a lawyer.
It's it's it's going into litigation, tryingtrying to get something trying to get this guy
(03:15):
to settle, get something out of it.
But it has taken a huge huge toll on on thecompany financially and me mentally.
But I've got to the point now where I've kickedthe can down the down the road long enough
where, man, I'm struggling to make payrollevery week.
(03:37):
And with close to 20 guys, that's anywhere from20 to $30,000 a week depending on depending on
how many hours we got and everything.
But I I don't know, man.
It's just getting to point where the guys aresensing, you know, a sense of insecurity
(03:58):
because, you know, vendors or we're maxed outwith vendors.
I'm doing what I can, trying to catch up onthem, but, you know, we're we're ninety plus
days out on them.
And it's just it's hard trying to keepeverybody happy, keep everybody paid up,
keeping the fuel bill paid, keeping the keepingthe vendors where we can still get material and
(04:18):
everything from them, just keep the job moving.
But at this point, man, like, I'm I'm goingthrough my savings, my personal savings, my the
my business savings, everything I've saved up,and everything I've built for the last eight
years.
It's like I'm I'm watching it I'm watching itslip out of my my my grip, and and this it's
killing me, man.
I I don't I'm at a loss.
(04:38):
I'm at a I don't know what to do.
Obviously, I've got receivables coming in, butyou know how it is.
GCs, they don't wanna pay no sooner than sixtydays.
I'm not in a position where I can float moneyfor for three months.
(05:00):
I don't know, man.
I'm just I'm running out of options, and I'mnot one to give up.
I've taken full responsibility and andaccountability on on everything that's
happened.
It was my decision to go up and work for thisguy.
I should've known better, but I I mean, it iswhat it is.
(05:20):
It's my fault.
I made a decision to go up there and to investall this money.
Yeah.
And I gotta live with that.
And I gotta figure out how to make sure my guyshere are taken care of.
And without them, I can't I can't do much on myown.
(05:47):
Heck, I got probably five or six active jobsgoing on right now.
Yeah.
Don't know, man.
I I just would like your your insight.
And I've I've called a lot of vendors and andnegotiated negotiated payment terms with them,
(06:08):
but it's just a matter of I'm down to justpraying to God I can make payroll every week at
this point.
Trying to sell off some stuff, trying to cut,trim fat where I can.
Got a lot of equipment that we bought, youknow, that whenever used equipment prices were
(06:29):
super high because we we really needed it.
And now that I'm trying to trim some fat andget rid of some stuff, I just I don't have the
equity and the equipment that I need.
So yeah, man.
Things are tough.
I don't know.
I I just what what are your what are yourthoughts on this?
(06:51):
I mean, I'm praying to God that something comesabout with this lawsuit on this guy, and I can
at least settle on something.
I mean, it's tough spot to be in.
You know, I spent eight years spent eight yearsbusting my butt and giving everything I got
(07:11):
into building a company.
And I don't know, man.
I just I I feel like it's almost it's almostover, and I don't I don't know what else to do.
So I don't know.
Even if if you ain't got nothing for me, it wasit was it was high stuff.
Unload that.
So, yeah, you miss out.
(07:31):
Thanks.
(07:58):
And this, folks, this is exactly why I say thethings I say on this podcast.
This is exactly the kind of story that I try toprotect so many young aspirational dudes from.
This this this life experience right here, thisbrother's going through, this is the thing that
(08:27):
I talk about when I say do not start abusiness.
Do not start a business.
It's for this right here.
You you can't see the video.
I'm gonna try to share as much of that as I canon social media.
Obviously, it's a long video.
And and, man, thank you so much for sharing it.
(08:52):
But I'll just tell you that this can only befully understood when you go through it, and
that's that's only gonna make sense to peoplethat have that have gone through something
similar to this.
This has happened to me.
Unfortunately, this has happened to me morethan one time.
(09:15):
Not to compare numbers or or say who's biggeror badder or dumber in in in our situation
here.
I think I am probably dumber.
But I got one of these outstanding.
It's a $3,000,000 suit.
And and I don't know if we'll ever see a pennyof it.
My dad always said, you know, good lucksqueezing blood from a turnip.
(09:38):
Just because it's red doesn't mean you'regetting any blood out of it.
Just because the company has money or the guyhas money doesn't mean you're gonna get any
money out of him.
And you may end up just wasting more money andtime and energy with with attorney's fees than
you will ever see a dime out of yourreceivable.
This this is heartbreaking.
(10:00):
It's heartbreaking to watch not only listen tothose words.
I mean, some of you guys can can feel that inhis voice and can feel that in the words.
It's heartbreaking to watch a guy walk aroundhis lay down yard and be just completely
mentally drained.
(10:24):
Like, feel like there's no gas left in thetank.
Feel like it's all that you can do just to makepayroll every week.
It's heartbreaking.
The the only thing worse than sitting where Isit watching those videos and listening to that
(10:48):
is sitting where I sit going through thatmyself.
That's the only thing worse, is going throughthat yourself.
There's some really tough things I'm gonna sayabout this, but there is some really good news.
There's some positivity.
I have something for it.
I'm not just gonna I'm not just gonna make funof you and make fun of me and make fun of other
(11:14):
Delberts like us for making these kind ofmistakes in business.
It's easy to just make fun of ourselves and saywe should have known better.
We shouldn't have taken the customer.
We should have had a rock solid contract.
We should have had some money up front.
It's easy to say what if.
It's easy to go backwards, play Monday morningquarterback, and talk about the game that
happened on Friday or Saturday.
(11:37):
What's hard is to move forward.
And so I've got some things that I think aregonna help move forward.
But first, I think it's important to talk abouthow guys like this guy and guys like me find
ourselves you know, we're good at our craft.
Right?
He's probably great at his craft.
They probably got awesome pipe crews.
He's probably got some awesome employees,twenty, thirty employees, doing $5,000,000 a
(12:00):
year in business.
Like, as a young dude, by all accounts, he'skilling it.
Like, by all accounts, he's a legend in themaking.
How do guys like that, guys like me, findourself in a deep, dark position where it
didn't work out the way we thought?
How do we find ourselves in a spot where we canbarely make payroll?
(12:26):
How do we find ourselves in a spot where we'reso at odds with the customer that we have to
eventually walk away from the customer and thensue them to get a dime out of them.
How do we find ourselves in that spot?
I've talked about this a little bit, but beforewe talk about the good news and the go forward
and and and how we how we move forward, it'simportant to figure out how did we get here.
(12:53):
I've thought about this a ton in my deep, darkmoments, and I've had multiple scenarios.
I told you guys two of them.
I've had multiple scenarios where we've haddeep, dark moments, and I got us into a
position very similar to what this guy isdescribing.
I got us into a customer who from day one wastrying to bend us over, take advantage of us,
(13:20):
and bleed us dry.
It's a dog eat dog world out there.
And what we do in the construction space, inthe mining space, in the contractor space,
you're either going to eat or you're going toget eaten.
(13:41):
Now I say that because I really wanna I reallytransform.
I know this is a big bold statement.
I really wanna transform the industry to bemore partnerships and less master slave
relationships, but we we get in this spot wherewe can't make payroll.
We can't pay vendors.
We have a 400 or $500,000 receivable that we'renever going to actually get paid on.
(14:03):
We get in this spot because we don't payattention to the small details.
And when you don't pay attention to the smalldetails, you end up finding yourself in a
situation where you are a slave working for amaster and you have no leverage.
You you have have no remedies.
(14:24):
When the contract goes south, you don't haveany remedies.
Sure.
You can lawyer up and sue them, but that takesforever.
I mean, we all know how this goes.
Even if it I mean, may your best case scenariois you settle or he settles with you for 50¢ on
the dollar.
So if he owes you 400, you're getting paid 200.
Means you're writing 200 k off on the year.
(14:47):
That might have been your profits for the year.
That is your best case scenario.
Your worst case scenario is it takes two years.
You guys finally decide to go litigate becauseyou won't give up and he won't give up.
You incur all these lawyer fees, and at the endof it, the judge says you're both idiots.
Both of you guys walk away, and and you'rewalking with nothing.
(15:08):
You actually dug yourself a deeper hole becauseof the energy, the time, and the money you
spent chasing this bad receivable.
How do you find yourself in this situation?
You find yourself in these situations by notpaying attention to the small details.
Every time I've had this happen to me, and it'shappened to few, I look back and I'm like, how
(15:33):
did we get here?
Well, we got here.
Again, this this goes back to like life'sdouble bogey moment.
Right?
We didn't vet the customer to begin with.
Is it a good customer or not?
Does this customer have money to pay us?
Is this customer giving us some sort of hollowpromise?
Because what you don't want, you don't want thecustomer's risk with their business to then
(15:57):
become your risk.
And in this situation, this guy was trying toopen up a quarry.
Well, that guy's risk is that he can't make afinished product in spec.
And then his next risk is even if he does makea finished product that's in spec, he can't
sell the finished product.
He doesn't have a customer base.
(16:18):
You don't wanna make his risks your risks.
If he can't make a finished product in spec andhe can't sell it to customers, he has no money.
And if he has no money, you don't get paid.
This is a tough lesson to learn.
We all think when we land a contract,especially young dumb guys like me, when we
(16:42):
land a contract, cool.
I'm gonna make money.
This is backlog.
This is good.
This is a big job.
We just took the next step, the next level.
We just got a big customer.
They're promising all these things.
What happens is if you don't pay attention tothe small details, you don't realize the
customer doesn't have any money.
The customer has a bunch of risks in theirbusiness that we should be aware of because if
(17:07):
those risks come true, the customer won't getany money.
And so, again, small details matter.
So that's that's one step.
The next step is then let's pretend for onesecond the customer does have money.
Let's say he is a loaded multimillionaire withall kinds of collateral, and he's got plenty of
(17:32):
money.
He's got customer trucks stacked out the door,and you feel good that you're gonna get paid
for your service.
Let's just pretend that's the case for asecond.
Okay.
Great.
What does your contract say?
Is it clear?
Is it vague?
Is it detailed?
Is it just a four or five page summary of whatyou both shook hands on?
(17:57):
Because this has absolutely burned me.
Absolutely.
I have lost not one, not two, not three, notfour or five.
I have lost millions of dollars that otherwisewe would have earned if our contracts would
have been a little bit tighter, a little bitcleaner, a little bit less vague, a little more
(18:21):
wordy.
There's one example.
I am missing one sentence, one sentence in a 40page contract.
I'm missing one sentence, and it cost us$2,000,000.
These little details matter.
Contracts it's funny.
I don't think I've ever said this, but I'mgonna call every single person out that listens
(18:41):
to this, including myself, by the way.
It's funny how we we all call ourselvescontractors, but most of us don't even know
what our contracts say.
Like, you know what it says in the grand schemeof of the scope of work you're gonna go do.
You know what it says like, hey.
This is the schedule.
This is the quantity.
This is what we're going to do, but you don'tknow what the contract says.
(19:06):
You don't know.
So many young guys, they get so amped up to gomake a sale and put ink on the paper.
They just sign the first volley of the contractover from the customer.
They don't review it.
They don't redline it.
They don't strike things out.
A lot of people don't even have a outsidecounsel to take a look at it.
They're like, oh, why am I gonna spend 4 or$500 with a lawyer?
(19:29):
I'll just do this myself.
You don't know what you don't know.
And if you're a young, dumb contractor, you aregoing to get killed by contract language that's
not in your favor.
Killed.
It's what puts a lot of people out of business,to be honest with you.
It's not the scope change.
(19:49):
It's not, this guy didn't pay us on titan.
It's you don't have the protections in theagreement you signed.
That's what puts a ton of people out ofbusiness.
So I made this mistake.
I have I have screwed this one up, and I havelearned so many lessons by getting the contract
(20:11):
language right.
We had a quick story.
We had a huge contract one time.
It was the one that was gonna really put us onthe map about five years ago.
So we are, you know, roughly four years inbusiness at this point.
And maybe this was four years ago.
We win this big contract with a gold goldproducer.
(20:34):
It was it was a gold mine, and they had plentyof money.
The guy who is the chairman and mainshareholder of the company is a
multibillionaire.
He owns multiple companies.
Just started a copper company a couple yearsago, and he's killing it.
So they had plenty of money.
It was an operating gold mine, big volumes, andit was gonna be roughly a 150 to $200,000,000
(20:58):
contract for us.
It was the one that was going to put us on themap years ago.
We had recently been burned by some by somecontract language, and so we get down to the
wire.
We've been selected.
We've been verbally awarded the job.
Two or three other competitors got told they'renot gonna get awarded the job.
So we're like, hey.
We got this in the bag.
(21:19):
We're negotiating equipment purchases withCaterpillar, $20,000,000 or $30,000,000 fleet,
and we get down to two parts of the contractlanguage that we couldn't agree to.
And I'll never forget it.
I I remember Gant and I looking around at eachother like, are we really because because they
(21:40):
were gonna die on the hill of these two thingsthey wanted in the contract.
We were gonna die on the hill of the two thingswe did not want in the contract.
They were not part of the RFQ process.
No one ever mentioned it.
They tried to slide it in.
You know, they tried to slide it in at the lastmoment, hope we didn't see it.
We caught it.
Thank god.
(22:01):
Gant and I looked at each other, and we'relike, we're not gonna do it.
We're not gonna sign this contract.
It was our biggest contract by far at the time.
We didn't agree to it.
They said, well, if you don't agree to it, youdon't get the contract.
We're gonna pull it.
We'll give it to somebody else.
And some other some other company agreed totheir terms, they took it.
(22:25):
Didn't work out very well for them.
I know exactly what happened, and it it wasn'ta great contract for the other folks.
You only learn by going through this stuff.
But when you do not pay attention to the smalldetails, they will kill you.
This is why I gave the example the other day ofwhy there needs to be so many layers of
(22:47):
management when you can afford to, put layersof management in place.
Because if you're the owner, you're theoperator, you're the guy managing the crews,
you're not paying attention to the smalldetails.
Contract language, handbooks, policies, likethe little things that will trip you up and
kill you, you can't miss them.
(23:12):
The next thing that happens in this series ofevents that leads us down this path of throwing
us into Death Valley because again, remember, adouble bogey is one bad shot followed by
multiple bad decisions.
And so you made a bad shot.
You picked a customer.
You thought you thought you had the rightcustomer.
(23:34):
It ended up being the wrong customer.
Then you proceed to make multiple poordecisions that further exacerbate your issue.
And so the next decision after you see thingskind of going off the rails is you wait too
long to stop working.
(23:55):
You wait too long.
This is this is one that, in my previous life,almost killed us.
We did work for six months, eight months.
We knew there was an issue.
We knew we we knew the customer and us were ondifferent pages with what we were interpreting
from the contract, from the pricing, from thescope of work.
(24:15):
We're like, ah, we'll we'll figure it out.
Well, week goes into week, month goes intomonth, and next thing you know, we get done
with the job, and the issue is still notresolved.
We're still kinda hemming and hawing, talkingabout it.
They're telling us, oh, it's fine.
We'll we'll make it right.
We'll get the right approvals.
We're at the same time saying, we can't affordto stop working because then I got people
(24:36):
sitting around, equipment sitting around.
I I'd have to lay them off.
We'd have to send the equipment back.
Like, it causes us other issues.
So what do we do?
We just keep working.
This will kill you.
There's a lot of things in business that willkill you, but continuing to work when you know
in your gut something is wrong, it will killyou.
(24:59):
And so to me, I think, again, another hugelesson I've had to learn to avoid getting
myself in these terrible situations is stop.
Stop digging.
Not only stop digging literally on-site, stopdigging yourself a financial hole.
How could we have taken this thing from being a4 or $500,000 receivable to a 1 or $200,000
(25:24):
receivable?
A lot less painful.
The second you realize you have a problem, thesecond they miss their first scheduled pay
date.
The if they're gonna let me just say this.
If your new customer is going to miss theirfirst check run, their first pay date, your
(25:45):
first invoice is due, and they miss the firstpayday, it's not gonna work.
You need to stop working immediately.
Don't work another month and let them miss asecond payday or a third month.
You have to stop immediately.
(26:05):
Have to.
We've taken on some I don't wanna say sketchycustomers because they're big customers, but
they're in volatile regions with a volatileproduct that has volatile pricing, and and we
we won a big contract.
And I told my CFO, I said, I want you to watchtheir receivables like a hawk.
If they miss pay dates, you have to let meknow, especially early on in the relationship.
(26:30):
Once they, you know, once they hit pay datesand pay on time religiously for a while, we'll
cut them some slack.
But if they miss one of the first few paydates, they slip a few days, even just a few
days, that's a huge red flag.
Huge red flag.
That's not a beige flag.
That's a red flag.
And so that's another detail you have to paysuper close attention to.
(26:52):
That's what gets you in this situation.
It wasn't that you picked customer.
That's a bad shot.
No big deal.
We can get out of we can we can get out of it.
We can correct course.
It wasn't that you missed some things in thecontract terms.
No.
Not not the end of the world.
It's that you kept going, and you listened tothe guy that was promising he was gonna make it
(27:15):
right.
Second he's running your equipment withoutauthorization, the second he's stealing from
you and your fuel, it's an immediate stop.
An immediate stop.
And I know this is tough because we wanna be,you know, contractors, guys like me.
We wanna serve the customer.
We wanna put the customer first.
We wanna give the customer the benefit of thedoubt and say, oh, he's.
(27:38):
It's fine, dude.
No big deal.
Run the skid steer over the weekend.
Yeah.
Use a couple $100 in fuel.
We want to defend the customer, but we can't doit to our own detriment.
Can't do it to your own detriment.
It's a partnership, not a master slaverelationship.
(27:59):
Slaves serve a master to their own detriment.
You do not wanna be in a master slaverelationship.
And then I think lastly so so you've made a badshot, pick a bad customer, bad decision with
the contract language, bad decision to keepworking, and then you get to the point where
(28:22):
you are ready to stop work.
You don't have any leverage other than stoppingwork at this point.
He's got no income because he hasn't sold anyproduct, or he's holding you over the barrel to
some scope of work things or whatever.
He's not paying you.
The only leverage you have at this point is tostop work.
(28:42):
So now what do we do?
There is some steps we can take forward.
Some of them are really hard.
Some of them are a little bit easier, butstill, you know, in the grand scheme of the
whole picture, really hard.
But there's a silver lining at the end, and youmay hate the silver lining.
(29:05):
That's okay.
I'm gonna give you my perspective as someonewho's been there.
Cause again, I'm doing I'm dealing with thisright now.
We had a project end over a year ago, year anda half ago.
$3,000,000 receivable.
Never been paid a dime for it.
We we we were in a long term contract.
There's a lot of details there that I can'ttalk about yet.
(29:26):
But I'm currently going through this, and Ihave gone through versions of this many, many
times now.
And and it's why I even that's why I even amable to frame it up this way.
So now what do we do?
Well, now that job's over with.
That guy's gone.
You let the lawyers figure out what the lawyerscan figure out.
Try to get him to settle for something.
(29:46):
There's a whole different strategy.
Maybe there's a whole different podcast episodeon that that we'll do someday.
But what do you do as the leader now?
I think first and foremost, transparency wins.
Transparency wins.
And you've been transparent just sitting inthis video, so that's a great start.
I think you get the crew together, all theemployees, and you say, look, guys.
(30:12):
I screwed up.
I made a double bogey.
I picked a customer that I thought was gonnaput us on the map and be great, long term
thing, and it backfired, shot us right in theface.
I got 4 or $500,000 sitting out there.
I've got hard costs below that that arealready, you know, paid out, money out of the
(30:34):
bank.
We're gonna have to tighten our belts for awhile.
But here's the thing, and this is what I wouldtell my own people if and when I ever find
myself in this situation.
The only way we get out of this is by, a,starting today, making every decision a good
(30:54):
decision.
The way to get out of a double bogey is by makeyour next shot a good shot.
B, we do it together all on the same page.
We all know where we are.
We all know what our goals are.
And c, we have to produce margin at the projectlevel.
(31:17):
Revenue can hide a lot of sins.
Adding a new job can hide a lot of sins.
Like, you could pick up the next big job andmoney comes in the door.
Margin is what you need.
The quickest way to forget about the $400,000receivable that you might not ever get paid on,
the quickest way to forget it is to make 400 kin margin, like profit.
(31:44):
Don't go don't go chase some revenue that'sjust gonna keep your guys working and busy, and
you may have to do the hard thing and lay acouple people off because they're doing a job
that's not making any margin or they're doing ajob that's losing money.
But I think being transparent with where youare and how you got there, first and foremost,
with the employees.
(32:04):
Second, making sure everyone knows we're gonnaget out of this together because this is just
part of the ride.
Remember, this is part of the ride building acompany from scratch.
This is a prerequisite.
You have to go through this stuff to learnthese lessons the hard way.
But then but then c, or three, we have toproduce margin.
(32:29):
Our work, our efforts at the project level,we've gotta be profitable.
Profitability is the thing that will get youout of the current situation.
Now it won't come quick.
It won't come easy making profits, especiallyin the markets that we're in now with, you
know, construction and the industry being softand equipment.
(32:51):
I would say most people that have boughtequipment in the last five years are underwater
on their equipment equity.
They don't have positive equity in theirequipment.
You gotta use what you've got for a while.
I totally get this.
I'm underwater on some machines, and I'mlooking back like, what?
What?
Why do we do that?
Why did we pay premium post COVID pricing whenpricing has now come back down to earth?
(33:14):
If your whole fleet's underwater, you don'thave a choice.
You gotta make do with what you got, and you'vegotta figure out a way to go make profit.
Now there are some little things you can do onthe side.
Right?
A, never waste a crisis.
Okay?
Never waste a crisis.
(33:35):
Get rid of all the things that are not makingyou money.
If you've got money or equity sitting in aditch, you know, a ditch witch or a skid steer
or bedding boxes, whatever, if you have moneysitting in things that is not producing revenue
for your company, get rid of it.
(33:57):
Never waste a crisis.
Don't be now more than ever, you cannot affordto be fat, especially if you're borrowing
money.
The interest is killing you.
So stop borrowing money.
If you've got things sitting out in the yard,even if you gotta sell them for 50¢ on the
dollar, get rid of them.
Put the cash back in your pocket.
Sounds like you're already doing some of this.
(34:19):
There are some games to play.
Some of these games get really expensive reallyfast.
I'm not a fan of factoring invoices.
I'm not a fan of taking out second lines onequipment that you've already got financed.
Some people do that.
I'm not a fan of like loan sharks that aregonna come in and, you know, give you a cash
infusion at at 20% interest or 25% interest.
(34:43):
I'm I'm not a fan of those things, becausenormally, it is a short term drug that
ultimately ends up bleeding you dry, and it'sreally hard to get off of short term drugs.
What you might consider is similar similaradvice I gave somebody else here recently.
(35:07):
Find someone that believes in you, whether it'sa customer, whether it is someone in the
industry, find someone that's got a little bitof money.
Maybe maybe it's not a lot of money, it's got alittle bit of money and wants to buy into your
company, wants to buy in some equity.
Maybe it's a 100 k.
Maybe it's a few 100 k.
They wanna pay you cash to own a piece of yourbusiness.
(35:30):
This is an option.
I know it's not a great one.
Everyone wants to hold all the equity, But whenyour back is up against the wall and you have
nowhere else to turn, you've sold everythingyou can sell, your projects aren't profitable,
I think you have two options.
One, sell a chunk of equity to someone thatbelieves in you.
(35:50):
Bring them in as a partner.
It infuses a little bit of cash into yourbusiness.
It hopefully, there's someone that if theyalready had some money laying around, they're
good with money and can help you become goodwith money.
That's that's option one.
And then option two is the not fun one.
Option two is becoming self aware.
(36:15):
Option two is understanding we got where we arebecause of the decision we made or multiple
decisions we've made.
Life is hard.
This business is making it even harder.
I don't want to sell part of my company.
(36:37):
I want to go down with the ship, and you grityour teeth, and you fight until someone forces
you to stop fighting.
And usually, what that looks like when someoneforces you to stop fighting is they force you
into bankruptcy.
I'm gonna say this.
(36:57):
Okay?
This is I'm gonna get people calling me and andsend me messages.
I have watched very and and very closely, bythe way.
I I say these things.
I think people roll their eyes like, there's noway he's seen this.
I have watched people that owe money multipletimes over what their company is worth.
(37:19):
So so let's pretend for a second your company'sworth $5,000,000.
I've seen people that owe $20.25, $30,000,000in debt on assets because of projects going
south, contracts going south, owners notpaying, and they never get forced into
bankruptcy.
(37:40):
You know who wins when a contractor that owns abunch of hard assets you know who wins when
when a bank forces them into bankruptcy andthey liquidate the assets, especially in
today's equipped used equipment market?
You know who wins?
The people who win in that scenario are theguys that buy cheap equipment from a bankruptcy
(38:02):
sale at an auction.
Nobody else wins.
The bank doesn't win.
They gotta write off a bunch of this stuff thatthey had loan values on the books for.
The contractor doesn't win because now he's outof business.
Banks want to see you stay in business.
A lot of people get this wrong.
They're like, ah, dude.
The bank's gonna try to take everything thefirst first chance they get.
(38:23):
The bank doesn't want your stuff.
They're a bank.
They want your money.
They don't want your stuff.
If they get your stuff, they gotta go sell it.
They gotta pay someone to sell it, a, first andforemost.
They gotta pay someone to appraise it, and thenthey gotta pay to write down whatever it sells
for because current state, no one's buying usedequipment at premium prices.
(38:43):
So they're not the bank's not making any money99% of the time by forcing you into bankruptcy.
I think you have a lot longer pathway torecover this little double bogey than you
realize.
Every time I've gotten through this, becauseI've thought my life was over, my business
(39:03):
life, not my actual life, I've thought mybusiness life was over multiple times.
Multiple times I've thought, oh, it's over.
This is the one that's gonna kill us.
When you get through it, you realize, well,that was just one hole.
I got all I got 18 holes left to play.
I double bogeyed the first hole.
(39:24):
No big deal.
We got through it.
Yeah.
We had to stretch some vendors out.
Yeah.
We had some employees quit or leave or yeah.
I didn't get to put I didn't get to pay bonusesout this year the way everybody wanted.
But man, it's a long journey.
And just because you've got one double bogey onthe scorecard doesn't mean you can't go have a
great round.
Doesn't mean you can't go have another greathole the next time.
(39:48):
You have a lot more runway than you think whenyou're going through Death Valley.
Death Valley feels like it's the longest,darkest, deepest hole ever.
It feels that way when you're going through it,but you got a long runway to get out of it.
And if somebody like me can take a company outof it, and and some other guys that I've talked
(40:10):
to who have been through it can get out of it,I think anybody can get out of it.
You gotta have faith.
You gotta have a plan.
You gotta be transparent.
You have to produce profit.
And you just do that day after day, week afterweek, month after month, and you wake up and
then you're like, woah.
400 k?
(40:31):
That ain't no big deal.
Yeah.
It sucked.
Got stung.
Ain't no big deal.
It feels like a big deal when you're goingthrough it.
It feels like you can just barely get by.
You can just barely make payroll when you'regoing through it.
But when you get to the other side, I knowpeople hate hearing this.
(40:54):
I know they get tired.
They roll their eyes.
When you get to the other side, you are betterfor it.
You're better for going through this.
You're a tougher mining, construction, HVAC.
You're a tougher CEO.
You're a tougher president.
You're a tougher project manager.
(41:15):
You're just a tougher human being, havingalmost died in business but rising out of the
ashes like a phoenix.
You're tougher for it.
It's a blessing.
This is the part that I said you're gonna hate.
This is the silver lining.
What you're going through currently is thegreatest gift you could ever be given in
business, I believe.
It sounds terrible saying that because I knowI'm gonna have this in my life.
(41:38):
I'm I'm I'm only 36, so I got a lot of yearsleft of business.
The biggest, hardest, nastiest problems, theworst years in business are actually the
greatest gifts.
That's what teaches us the most.
That's what teaches us how to be scrappy.
That's what teaches us how to be resilient.
(42:00):
As my good friend, Justin Holmberg says, that'swhat gives us the testicular fortitude to smile
the next time we go through it.
That's what builds this layer of scar tissuethat then becomes your shield.
(42:21):
No dude that's ever made it in business tobecome successful, to be the fat old guy riding
around the Lincoln smoking the cigar, no guyever got to the top on an easy path.
He got there by going through this exactscenario, almost getting killed multiple times
(42:43):
in business, but figuring out a way.
Putting his head down, making money, payingpeople back when he can.
If you're transparent with your vendors, yourvendors will wait as long as they believe you.
(43:03):
They'll wait.
They're not pumped about it.
No vendor likes to get stretched out on paymentterms, but they'd rather get their money
someday than never get their money.
And if you're transparent with them and yousay, hey, look, man, I I got caught in a
pickle.
I made a bad decision.
I'm learning from it.
(43:23):
I'm a young dude.
I'm honest.
I'm trustworthy.
I'm trying to build something.
I just need you to be a little bit more patientand you'll get paid in full, plus whatever
finance charges you wanna charge me.
I don't nah.
I don't like paying finance charges.
But but this is a reality.
If they believe in you, maybe you gotta go sitdown at their corporate office and kiss the
(43:45):
ring and and bow to the guy that, you know, isholding this account over your head.
But if they believe in you, they will help you.
They will not crucify you.
99% of the time, the vendor wants to see youwin because that means they get paid.
(44:05):
If the vendor forces you to lose, well, theyknow they're never gonna get paid.
Same thing with the bank.
They don't wanna see you lose.
So for me, some key takeaways are one, this youcan get through this.
There are there are people that have had it wayworse.
(44:27):
I've I just trust me on this.
There are people that it way worse that havegotten through it and built a successful thing.
They applied the lessons learned.
They went and made money.
They added revenue because revenue for a periodof time can hide a lot of sense.
They then skinnied up their operations and gotreally profitable.
They never got fat or lazy.
(44:50):
But there are people that have really run outof money and still figured out a way to win.
This might be a great time to consider apartner.
If you've never considered it before, maybeGod's trying to tell you something and it's
like, hey, dude.
You're out over your skis.
(45:11):
You need someone with some financial acumen tocome in here and help you get this right.
Sell a chunk of this thing off to someone thatbelieves in you, that wants to come in here and
be your partner, your CFO, your whatever.
May maybe that's what's going on.
I don't know all the details, so I can't giveyou all the best insight.
(45:33):
But I'm just telling you, man, it is ablessing.
And and someday, I know it doesn't feel like itnow, and you're probably punch in the steering
wheel.
Listen to this.
Someday, you're gonna realize how much betteryou are for living through what you're living
through.
I I just I I promise you.
(45:55):
Now for the rest of you guys that heard allthat, do you still wanna start a business?
You still wanna do this?
Because it looks cool on Instagram, the pickuptrucks, the the dozers.
You know, everyone's smiling with their shinyhard hats and vests.
Looks fun.
(46:20):
It's hard.
It is really hard.
And and I and I can guarantee you everybusiness owner that's on that's listening to
this episode right now, if they've been inbusiness long enough, they're shaking their
head saying, yep.
I remember when I went through my my momentwhere I took a customer I shouldn't have or I
(46:43):
got stiffed on a big receivable or I missedsome contract language and and the customer
bent me over with it.
Every everyone's been there.
Everyone's done it.
You you're not alone.
You you're actually, honestly, now just part ofthe club.
You guys have heard me tell the story of, youknow, my buddy who bought a Crotch Rocket.
(47:03):
I I was like, dude, you're not you're not awriter.
You're not a real writer until you lay it down.
And he literally went and laid it down rightafter that, not on purpose.
I don't think you're a real business owner.
Don't I think you're a real boss.
I don't think you're a real CEO until you gothrough something like this, until you get
these ball kickings and and till you build thisscar tissue, until you have this experience
(47:27):
under your belt.
And then when you do, man, you never forget it.
You never forget it.
The best lessons are learned by living throughthem and trying to sleep at night, not being
being able to sleep, not being able to, youknow, tell your wife, oh, man, things are
things are not as good as I thought they wouldbe running this business.
(47:50):
You you just don't forget those things.
So my feedback, to sum it all up, a, myfeedback is you have to have a positive
mindset.
You have to know you can get through it.
Don't think it's over.
Don't think life's over.
Don't think the business is over.
(48:10):
You got a lot more runway than you actuallythink.
I just I believe it.
I've lived through that that piece of it.
Two, or b, I forget how I number these thingssometimes, so forgive me.
The first thing was positive mindset.
That's one.
Two, make profit.
(48:33):
Profit is so critical.
And if you're not you don't have the data toshow whether you're making profit or not, or if
you don't trust the data, go spend some timediving into the data.
Be super transparent.
Number three, be super transparent with yourteammates.
Make them feel like owners in this.
Say, look, guys.
If we don't get this figured out, you're allfired because there's no company to pay for
(48:55):
you.
Or worse, you're all hired.
You're still working here.
You just don't get paid on Friday becausethere's no money in the account to make
payroll.
Be super transparent with them.
Make them feel like part of I know you'reprobably thinking, well, some of them are gonna
leave.
Right?
They're gonna get cold feet.
They're gonna say the ones that do stay, thoseare the ones you want anyway.
(49:17):
Those are the ones that are gonna help youfigure it out.
The ones that stay when it looks like thingsare dire, those are the ones you want.
The other ones that leave, they're not theythey they don't they don't feel bought in.
They're not the ones that are gonna help youmove the needle.
So even if you leave even if you lose half yourguys and you gotta you gotta shut a a project
(49:41):
down for a week or two while you rehire, like,man, you want the guys that that are gonna be
shoulder to shoulder in battle with the swords,ready to fight every single day because that's
how you make profit with guys that actuallycare, guys that not only care about the
company, but care about you personally as theguy, as the CEO.
(50:01):
So you gotta be super transparent with them.
I believe on top of all of that, I believe youwill look back someday.
The the 400 thousand's always gonna be 400,000.
It's it's real money.
I know it stings.
You will look back someday because you're ayoung guy, and you'll say, you know what?
(50:27):
Those lessons have made me way more than the400,000 cost me.
It's not gonna be next year.
It's not gonna be the year after.
It's gonna take a while for it all to come fullcircle.
But the only way our teams have ever gotten towhere we are is by the massive mistakes we
(50:51):
made, learning from them, applying thelearnings.
Like like, that's the only way.
That's that's why I always say I feel likewe're just in warm ups.
You know what warm ups are for?
Warm ups are for missed shots.
When you go on the golf course, you you'll hearthis all the time when you go hit balls before
a round.
(51:12):
You'll hear guys say, oh, glad to get that oneout of the system.
I'm gonna save my good shots for the round.
Like, guy will go up and hit a few drivers, hita few wedges.
He'll shank a couple in the woods.
Like, whoo.
Man, glad I'm hitting balls.
I got that out of my system.
Warm ups are for the missed shots.
Warm ups are for the screw ups.
(51:34):
Your first ten years in business, you're justgetting warmed up.
You're learning.
You're taking huge failures, huge ballkickings, punches in the mouth.
You're taking the missed shots because it'swarm ups.
Now what you do is you learn how to make theshots in the game once warm ups are over.
(51:55):
At some point in time, warm ups have to end,and it's now game time.
For us, I feel like for our business, we areright there.
We are like, maybe there's maybe there'sanother few seconds of warm ups going, but we
are we are playing in a stage now where it'sgame time.
We cannot afford missed shots anymore.
(52:17):
We cannot afford bad customers.
We cannot afford bad contract language.
We have to make shots in the game.
Not every shot.
We're still gonna screw up.
We're still gonna screw up for an employee.
We're gonna screw up for a customer or avendor.
That's part of it.
But we better make a lot more shots than whatwe miss when it's game time.
(52:41):
In warm ups, you just have to stay on thecourt.
You just have to stay in the game long enough.
Stay stay in the warm up line.
Miss your shots.
Hopefully, you make a few because you gotta payfor the missed shots.
But, man, the game hadn't even started.
If you're if you're this young in business andyou're and you're taking a big loss, a big
(53:05):
$400,000 mistake, like, it's it's warm ups.
And now you gotta apply the lessons that you'vejust lived through so that you don't live
through those things again.
Because there's a bunch of things that brokedown in the process to get you where you are.
It's not just, man, this customer stiffed me.
(53:27):
I I said this recently.
It's not the customer's fault, and you knowthat.
I could I can hear that in your voice.
You've already embraced that.
It's not the customer's fault you're in thesituation you're in.
It's it's it's the leader's fault.
It's it's never been the customer's fault thatwe didn't get paid on a receivable.
(53:49):
It's never been the customer's fault.
I'd love to blame the customer.
I used to blame the customer.
Was like, man, that customer, they're a bunchof deadbeats.
And then I look around.
I'm like, well, wait a second.
Who's the idiot that signed up to work withsome deadbeats?
That's whose fault it is.
So, man, I I hate it.
I I do.
I I wish I had some magic, potion, some magicpill, some silver bullet, some trick that I
(54:14):
knew to get you out of it.
But I think being transparent, asking forforgiveness from some vendors, asking for some
deferred pay terms, being transparent with youremployees and your team members, being
vulnerable.
I know it's tough for us tough guys to bevulnerable, us macho guys, be vulnerable with
them.
(54:35):
At the end of the day, you got a lot morerunway than you think.
I promise you.
You got a lot more.
Even if you don't have any money in theaccount, you got a lot more runway than you
think.
There are people that love and I don't know ifanybody on here if if if you're somebody that
listens to this podcast that wants to help thisyoung man, reach out to me on the Purdium
(54:57):
hotline.
I'll put you in contact.
There are people out there that love to helpfolks in your situation.
They love to finance.
They love to loan money.
Now be beware beware of the loan sharks.
There are people that love to invest in guysthat they believe in, young guys that that that
know they can produce results.
(55:18):
I just made a bad shot.
You have a lot more runway.
Now's the time.
Don't feel bad.
Don't feel sorry for yourself.
Now's the time to get creative.
Now's the time to be vengeful.
Go figure out who the next customer is, wherethe next gross margin's coming from, how to get
the right employees doing the right things toreally move the needle for your business.
(55:41):
Never waste a crisis.
You're living through a crisis?
Don't waste it.
This is where you really sharpen the pencil andget good at business.
And this is what, in my opinion, takescompanies that that are really a hobby.
You know?
If you if you're going from a hobby business toa legitimate organization, you do it in times
(56:01):
of crisis like this.
You figure out who you are.
Who are we?
How do we respond to this?
How do we get really good at running abusiness?
You're really good at your craft.
You can dig ditches and weld pipe and whatever.
How do you now become a really good business?
Well, you do it in times of crisis like this.
So that's what I got.
(56:22):
Man, I'm praying for you.
I I love getting your videos.
You've sent several.
I love them.
Praying for you.
I I hope you keep me updated on your path, onyour journey.
I hope if nothing else, this gives yousomething to think about.
It's a mindset shift.
And for the rest of you guys, I hope you'regetting your pretty in.
We'll do it again tomorrow.
What's up, Keaton?
I appreciate the, the shout out on my lastvideo I sent you.
I've been wanting to send you this video for awhile.
Been a little hesitant on doing so.
Getting a little personal, but you've beenrequesting everybody kinda send the send in
questions or just just anything anything aboutmaybe your insight on some stuff, your input.
(00:28):
It's a little little background.
I've been in business going on eight years.
Last year, I had about 30 employees.
I had three three utility crews and a coupledirt crews.
Now I'm down to about just under 20 employees,one utility crew, and three three side work
(00:52):
crews.
September 2024, I came in contact with a guy inTennessee who had just bought an old rock
quarry that he was looking at looking atgetting back back running and selling rock out
of.
So we signed the contract and agreed to stripoverburden and crush rock for this guy.
(01:18):
It's private on quarry.
Nothing nothing crazy.
It is in in Eastern Tennessee.
Long story short, I'm sorry if this gets longwinded, but it's it's kind of a long story.
We get up there in September 24, go to work.
(01:40):
And keep in mind, this is three or four hoursaway from home for us.
So this is this is a big this is a big, bigleap for us.
So we get up there.
We we're up there, you know, two to three weeksat a time until December.
We're we're stripping over burden.
We're helping him, you know, build build anaccess road, this, that, and the other.
(02:03):
While we're gone on the weekends, he's takingadvantage of equipment we have on-site, using
it for his own benefit, using our fuel.
Eventually, I pull I a meeting together withhim and kinda let him know where we stand and
that there will be an amendment to thecontract.
(02:25):
And keep in mind, this whole time, this isthree, four months going by.
We have not seen a penny.
And he still has not got his scale house done.
His scale is not operational.
He has not sold not one ton of rock out of thisquarry.
And I've invested a couple $100,000.
And keep in mind, I'm a I'm a 5,000,000 lastyear, was a $5,000,000 company.
(02:50):
$413,000 is what this man owes me.
And I'm sure you can guess how much that has aneffect on on a on a $5,000,000 a year company.
Anyways, we're we're I've hired a lawyer.
It's it's it's going into litigation, tryingtrying to get something trying to get this guy
(03:15):
to settle, get something out of it.
But it has taken a huge huge toll on on thecompany financially and me mentally.
But I've got to the point now where I've kickedthe can down the down the road long enough
where, man, I'm struggling to make payrollevery week.
(03:37):
And with close to 20 guys, that's anywhere from20 to $30,000 a week depending on depending on
how many hours we got and everything.
But I I don't know, man.
It's just getting to point where the guys aresensing, you know, a sense of insecurity
(03:58):
because, you know, vendors or we're maxed outwith vendors.
I'm doing what I can, trying to catch up onthem, but, you know, we're we're ninety plus
days out on them.
And it's just it's hard trying to keepeverybody happy, keep everybody paid up,
keeping the fuel bill paid, keeping the keepingthe vendors where we can still get material and
(04:18):
everything from them, just keep the job moving.
But at this point, man, like, I'm I'm goingthrough my savings, my personal savings, my the
my business savings, everything I've saved up,and everything I've built for the last eight
years.
It's like I'm I'm watching it I'm watching itslip out of my my my grip, and and this it's
killing me, man.
I I don't I'm at a loss.
(04:38):
I'm at a I don't know what to do.
Obviously, I've got receivables coming in, butyou know how it is.
GCs, they don't wanna pay no sooner than sixtydays.
I'm not in a position where I can float moneyfor for three months.
(05:00):
I don't know, man.
I'm just I'm running out of options, and I'mnot one to give up.
I've taken full responsibility and andaccountability on on everything that's
happened.
It was my decision to go up and work for thisguy.
I should've known better, but I I mean, it iswhat it is.
(05:20):
It's my fault.
I made a decision to go up there and to investall this money.
Yeah.
And I gotta live with that.
And I gotta figure out how to make sure my guyshere are taken care of.
And without them, I can't I can't do much on myown.
(05:47):
Heck, I got probably five or six active jobsgoing on right now.
Yeah.
Don't know, man.
I I just would like your your insight.
And I've I've called a lot of vendors and andnegotiated negotiated payment terms with them,
(06:08):
but it's just a matter of I'm down to justpraying to God I can make payroll every week at
this point.
Trying to sell off some stuff, trying to cut,trim fat where I can.
Got a lot of equipment that we bought, youknow, that whenever used equipment prices were
(06:29):
super high because we we really needed it.
And now that I'm trying to trim some fat andget rid of some stuff, I just I don't have the
equity and the equipment that I need.
So yeah, man.
Things are tough.
I don't know.
I I just what what are your what are yourthoughts on this?
(06:51):
I mean, I'm praying to God that something comesabout with this lawsuit on this guy, and I can
at least settle on something.
I mean, it's tough spot to be in.
You know, I spent eight years spent eight yearsbusting my butt and giving everything I got
(07:11):
into building a company.
And I don't know, man.
I just I I feel like it's almost it's almostover, and I don't I don't know what else to do.
So I don't know.
Even if if you ain't got nothing for me, it wasit was it was high stuff.
Unload that.
So, yeah, you miss out.
(07:31):
Thanks.
(07:58):
And this, folks, this is exactly why I say thethings I say on this podcast.
This is exactly the kind of story that I try toprotect so many young aspirational dudes from.
This this this life experience right here, thisbrother's going through, this is the thing that
(08:27):
I talk about when I say do not start abusiness.
Do not start a business.
It's for this right here.
You you can't see the video.
I'm gonna try to share as much of that as I canon social media.
Obviously, it's a long video.
And and, man, thank you so much for sharing it.
(08:52):
But I'll just tell you that this can only befully understood when you go through it, and
that's that's only gonna make sense to peoplethat have that have gone through something
similar to this.
This has happened to me.
Unfortunately, this has happened to me morethan one time.
(09:15):
Not to compare numbers or or say who's biggeror badder or dumber in in in our situation
here.
I think I am probably dumber.
But I got one of these outstanding.
It's a $3,000,000 suit.
And and I don't know if we'll ever see a pennyof it.
My dad always said, you know, good lucksqueezing blood from a turnip.
(09:38):
Just because it's red doesn't mean you'regetting any blood out of it.
Just because the company has money or the guyhas money doesn't mean you're gonna get any
money out of him.
And you may end up just wasting more money andtime and energy with with attorney's fees than
you will ever see a dime out of yourreceivable.
This this is heartbreaking.
(10:00):
It's heartbreaking to watch not only listen tothose words.
I mean, some of you guys can can feel that inhis voice and can feel that in the words.
It's heartbreaking to watch a guy walk aroundhis lay down yard and be just completely
mentally drained.
(10:24):
Like, feel like there's no gas left in thetank.
Feel like it's all that you can do just to makepayroll every week.
It's heartbreaking.
The the only thing worse than sitting where Isit watching those videos and listening to that
(10:48):
is sitting where I sit going through thatmyself.
That's the only thing worse, is going throughthat yourself.
There's some really tough things I'm gonna sayabout this, but there is some really good news.
There's some positivity.
I have something for it.
I'm not just gonna I'm not just gonna make funof you and make fun of me and make fun of other
(11:14):
Delberts like us for making these kind ofmistakes in business.
It's easy to just make fun of ourselves and saywe should have known better.
We shouldn't have taken the customer.
We should have had a rock solid contract.
We should have had some money up front.
It's easy to say what if.
It's easy to go backwards, play Monday morningquarterback, and talk about the game that
happened on Friday or Saturday.
(11:37):
What's hard is to move forward.
And so I've got some things that I think aregonna help move forward.
But first, I think it's important to talk abouthow guys like this guy and guys like me find
ourselves you know, we're good at our craft.
Right?
He's probably great at his craft.
They probably got awesome pipe crews.
He's probably got some awesome employees,twenty, thirty employees, doing $5,000,000 a
(12:00):
year in business.
Like, as a young dude, by all accounts, he'skilling it.
Like, by all accounts, he's a legend in themaking.
How do guys like that, guys like me, findourself in a deep, dark position where it
didn't work out the way we thought?
How do we find ourselves in a spot where we canbarely make payroll?
(12:26):
How do we find ourselves in a spot where we'reso at odds with the customer that we have to
eventually walk away from the customer and thensue them to get a dime out of them.
How do we find ourselves in that spot?
I've talked about this a little bit, but beforewe talk about the good news and the go forward
and and and how we how we move forward, it'simportant to figure out how did we get here.
(12:53):
I've thought about this a ton in my deep, darkmoments, and I've had multiple scenarios.
I told you guys two of them.
I've had multiple scenarios where we've haddeep, dark moments, and I got us into a
position very similar to what this guy isdescribing.
I got us into a customer who from day one wastrying to bend us over, take advantage of us,
(13:20):
and bleed us dry.
It's a dog eat dog world out there.
And what we do in the construction space, inthe mining space, in the contractor space,
you're either going to eat or you're going toget eaten.
(13:41):
Now I say that because I really wanna I reallytransform.
I know this is a big bold statement.
I really wanna transform the industry to bemore partnerships and less master slave
relationships, but we we get in this spot wherewe can't make payroll.
We can't pay vendors.
We have a 400 or $500,000 receivable that we'renever going to actually get paid on.
(14:03):
We get in this spot because we don't payattention to the small details.
And when you don't pay attention to the smalldetails, you end up finding yourself in a
situation where you are a slave working for amaster and you have no leverage.
You you have have no remedies.
(14:24):
When the contract goes south, you don't haveany remedies.
Sure.
You can lawyer up and sue them, but that takesforever.
I mean, we all know how this goes.
Even if it I mean, may your best case scenariois you settle or he settles with you for 50¢ on
the dollar.
So if he owes you 400, you're getting paid 200.
Means you're writing 200 k off on the year.
(14:47):
That might have been your profits for the year.
That is your best case scenario.
Your worst case scenario is it takes two years.
You guys finally decide to go litigate becauseyou won't give up and he won't give up.
You incur all these lawyer fees, and at the endof it, the judge says you're both idiots.
Both of you guys walk away, and and you'rewalking with nothing.
(15:08):
You actually dug yourself a deeper hole becauseof the energy, the time, and the money you
spent chasing this bad receivable.
How do you find yourself in this situation?
You find yourself in these situations by notpaying attention to the small details.
Every time I've had this happen to me, and it'shappened to few, I look back and I'm like, how
(15:33):
did we get here?
Well, we got here.
Again, this this goes back to like life'sdouble bogey moment.
Right?
We didn't vet the customer to begin with.
Is it a good customer or not?
Does this customer have money to pay us?
Is this customer giving us some sort of hollowpromise?
Because what you don't want, you don't want thecustomer's risk with their business to then
(15:57):
become your risk.
And in this situation, this guy was trying toopen up a quarry.
Well, that guy's risk is that he can't make afinished product in spec.
And then his next risk is even if he does makea finished product that's in spec, he can't
sell the finished product.
He doesn't have a customer base.
(16:18):
You don't wanna make his risks your risks.
If he can't make a finished product in spec andhe can't sell it to customers, he has no money.
And if he has no money, you don't get paid.
This is a tough lesson to learn.
We all think when we land a contract,especially young dumb guys like me, when we
(16:42):
land a contract, cool.
I'm gonna make money.
This is backlog.
This is good.
This is a big job.
We just took the next step, the next level.
We just got a big customer.
They're promising all these things.
What happens is if you don't pay attention tothe small details, you don't realize the
customer doesn't have any money.
The customer has a bunch of risks in theirbusiness that we should be aware of because if
(17:07):
those risks come true, the customer won't getany money.
And so, again, small details matter.
So that's that's one step.
The next step is then let's pretend for onesecond the customer does have money.
Let's say he is a loaded multimillionaire withall kinds of collateral, and he's got plenty of
(17:32):
money.
He's got customer trucks stacked out the door,and you feel good that you're gonna get paid
for your service.
Let's just pretend that's the case for asecond.
Okay.
Great.
What does your contract say?
Is it clear?
Is it vague?
Is it detailed?
Is it just a four or five page summary of whatyou both shook hands on?
(17:57):
Because this has absolutely burned me.
Absolutely.
I have lost not one, not two, not three, notfour or five.
I have lost millions of dollars that otherwisewe would have earned if our contracts would
have been a little bit tighter, a little bitcleaner, a little bit less vague, a little more
(18:21):
wordy.
There's one example.
I am missing one sentence, one sentence in a 40page contract.
I'm missing one sentence, and it cost us$2,000,000.
These little details matter.
Contracts it's funny.
I don't think I've ever said this, but I'mgonna call every single person out that listens
(18:41):
to this, including myself, by the way.
It's funny how we we all call ourselvescontractors, but most of us don't even know
what our contracts say.
Like, you know what it says in the grand schemeof of the scope of work you're gonna go do.
You know what it says like, hey.
This is the schedule.
This is the quantity.
This is what we're going to do, but you don'tknow what the contract says.
(19:06):
You don't know.
So many young guys, they get so amped up to gomake a sale and put ink on the paper.
They just sign the first volley of the contractover from the customer.
They don't review it.
They don't redline it.
They don't strike things out.
A lot of people don't even have a outsidecounsel to take a look at it.
They're like, oh, why am I gonna spend 4 or$500 with a lawyer?
(19:29):
I'll just do this myself.
You don't know what you don't know.
And if you're a young, dumb contractor, you aregoing to get killed by contract language that's
not in your favor.
Killed.
It's what puts a lot of people out of business,to be honest with you.
It's not the scope change.
(19:49):
It's not, this guy didn't pay us on titan.
It's you don't have the protections in theagreement you signed.
That's what puts a ton of people out ofbusiness.
So I made this mistake.
I have I have screwed this one up, and I havelearned so many lessons by getting the contract
(20:11):
language right.
We had a quick story.
We had a huge contract one time.
It was the one that was gonna really put us onthe map about five years ago.
So we are, you know, roughly four years inbusiness at this point.
And maybe this was four years ago.
We win this big contract with a gold goldproducer.
(20:34):
It was it was a gold mine, and they had plentyof money.
The guy who is the chairman and mainshareholder of the company is a
multibillionaire.
He owns multiple companies.
Just started a copper company a couple yearsago, and he's killing it.
So they had plenty of money.
It was an operating gold mine, big volumes, andit was gonna be roughly a 150 to $200,000,000
(20:58):
contract for us.
It was the one that was going to put us on themap years ago.
We had recently been burned by some by somecontract language, and so we get down to the
wire.
We've been selected.
We've been verbally awarded the job.
Two or three other competitors got told they'renot gonna get awarded the job.
So we're like, hey.
We got this in the bag.
(21:19):
We're negotiating equipment purchases withCaterpillar, $20,000,000 or $30,000,000 fleet,
and we get down to two parts of the contractlanguage that we couldn't agree to.
And I'll never forget it.
I I remember Gant and I looking around at eachother like, are we really because because they
(21:40):
were gonna die on the hill of these two thingsthey wanted in the contract.
We were gonna die on the hill of the two thingswe did not want in the contract.
They were not part of the RFQ process.
No one ever mentioned it.
They tried to slide it in.
You know, they tried to slide it in at the lastmoment, hope we didn't see it.
We caught it.
Thank god.
(22:01):
Gant and I looked at each other, and we'relike, we're not gonna do it.
We're not gonna sign this contract.
It was our biggest contract by far at the time.
We didn't agree to it.
They said, well, if you don't agree to it, youdon't get the contract.
We're gonna pull it.
We'll give it to somebody else.
And some other some other company agreed totheir terms, they took it.
(22:25):
Didn't work out very well for them.
I know exactly what happened, and it it wasn'ta great contract for the other folks.
You only learn by going through this stuff.
But when you do not pay attention to the smalldetails, they will kill you.
This is why I gave the example the other day ofwhy there needs to be so many layers of
(22:47):
management when you can afford to, put layersof management in place.
Because if you're the owner, you're theoperator, you're the guy managing the crews,
you're not paying attention to the smalldetails.
Contract language, handbooks, policies, likethe little things that will trip you up and
kill you, you can't miss them.
(23:12):
The next thing that happens in this series ofevents that leads us down this path of throwing
us into Death Valley because again, remember, adouble bogey is one bad shot followed by
multiple bad decisions.
And so you made a bad shot.
You picked a customer.
You thought you thought you had the rightcustomer.
(23:34):
It ended up being the wrong customer.
Then you proceed to make multiple poordecisions that further exacerbate your issue.
And so the next decision after you see thingskind of going off the rails is you wait too
long to stop working.
(23:55):
You wait too long.
This is this is one that, in my previous life,almost killed us.
We did work for six months, eight months.
We knew there was an issue.
We knew we we knew the customer and us were ondifferent pages with what we were interpreting
from the contract, from the pricing, from thescope of work.
(24:15):
We're like, ah, we'll we'll figure it out.
Well, week goes into week, month goes intomonth, and next thing you know, we get done
with the job, and the issue is still notresolved.
We're still kinda hemming and hawing, talkingabout it.
They're telling us, oh, it's fine.
We'll we'll make it right.
We'll get the right approvals.
We're at the same time saying, we can't affordto stop working because then I got people
(24:36):
sitting around, equipment sitting around.
I I'd have to lay them off.
We'd have to send the equipment back.
Like, it causes us other issues.
So what do we do?
We just keep working.
This will kill you.
There's a lot of things in business that willkill you, but continuing to work when you know
in your gut something is wrong, it will killyou.
(24:59):
And so to me, I think, again, another hugelesson I've had to learn to avoid getting
myself in these terrible situations is stop.
Stop digging.
Not only stop digging literally on-site, stopdigging yourself a financial hole.
How could we have taken this thing from being a4 or $500,000 receivable to a 1 or $200,000
(25:24):
receivable?
A lot less painful.
The second you realize you have a problem, thesecond they miss their first scheduled pay
date.
The if they're gonna let me just say this.
If your new customer is going to miss theirfirst check run, their first pay date, your
(25:45):
first invoice is due, and they miss the firstpayday, it's not gonna work.
You need to stop working immediately.
Don't work another month and let them miss asecond payday or a third month.
You have to stop immediately.
(26:05):
Have to.
We've taken on some I don't wanna say sketchycustomers because they're big customers, but
they're in volatile regions with a volatileproduct that has volatile pricing, and and we
we won a big contract.
And I told my CFO, I said, I want you to watchtheir receivables like a hawk.
If they miss pay dates, you have to let meknow, especially early on in the relationship.
(26:30):
Once they, you know, once they hit pay datesand pay on time religiously for a while, we'll
cut them some slack.
But if they miss one of the first few paydates, they slip a few days, even just a few
days, that's a huge red flag.
Huge red flag.
That's not a beige flag.
That's a red flag.
And so that's another detail you have to paysuper close attention to.
(26:52):
That's what gets you in this situation.
It wasn't that you picked customer.
That's a bad shot.
No big deal.
We can get out of we can we can get out of it.
We can correct course.
It wasn't that you missed some things in thecontract terms.
No.
Not not the end of the world.
It's that you kept going, and you listened tothe guy that was promising he was gonna make it
(27:15):
right.
Second he's running your equipment withoutauthorization, the second he's stealing from
you and your fuel, it's an immediate stop.
An immediate stop.
And I know this is tough because we wanna be,you know, contractors, guys like me.
We wanna serve the customer.
We wanna put the customer first.
We wanna give the customer the benefit of thedoubt and say, oh, he's.
(27:38):
It's fine, dude.
No big deal.
Run the skid steer over the weekend.
Yeah.
Use a couple $100 in fuel.
We want to defend the customer, but we can't doit to our own detriment.
Can't do it to your own detriment.
It's a partnership, not a master slaverelationship.
(27:59):
Slaves serve a master to their own detriment.
You do not wanna be in a master slaverelationship.
And then I think lastly so so you've made a badshot, pick a bad customer, bad decision with
the contract language, bad decision to keepworking, and then you get to the point where
(28:22):
you are ready to stop work.
You don't have any leverage other than stoppingwork at this point.
He's got no income because he hasn't sold anyproduct, or he's holding you over the barrel to
some scope of work things or whatever.
He's not paying you.
The only leverage you have at this point is tostop work.
(28:42):
So now what do we do?
There is some steps we can take forward.
Some of them are really hard.
Some of them are a little bit easier, butstill, you know, in the grand scheme of the
whole picture, really hard.
But there's a silver lining at the end, and youmay hate the silver lining.
(29:05):
That's okay.
I'm gonna give you my perspective as someonewho's been there.
Cause again, I'm doing I'm dealing with thisright now.
We had a project end over a year ago, year anda half ago.
$3,000,000 receivable.
Never been paid a dime for it.
We we we were in a long term contract.
There's a lot of details there that I can'ttalk about yet.
(29:26):
But I'm currently going through this, and Ihave gone through versions of this many, many
times now.
And and it's why I even that's why I even amable to frame it up this way.
So now what do we do?
Well, now that job's over with.
That guy's gone.
You let the lawyers figure out what the lawyerscan figure out.
Try to get him to settle for something.
(29:46):
There's a whole different strategy.
Maybe there's a whole different podcast episodeon that that we'll do someday.
But what do you do as the leader now?
I think first and foremost, transparency wins.
Transparency wins.
And you've been transparent just sitting inthis video, so that's a great start.
I think you get the crew together, all theemployees, and you say, look, guys.
(30:12):
I screwed up.
I made a double bogey.
I picked a customer that I thought was gonnaput us on the map and be great, long term
thing, and it backfired, shot us right in theface.
I got 4 or $500,000 sitting out there.
I've got hard costs below that that arealready, you know, paid out, money out of the
(30:34):
bank.
We're gonna have to tighten our belts for awhile.
But here's the thing, and this is what I wouldtell my own people if and when I ever find
myself in this situation.
The only way we get out of this is by, a,starting today, making every decision a good
(30:54):
decision.
The way to get out of a double bogey is by makeyour next shot a good shot.
B, we do it together all on the same page.
We all know where we are.
We all know what our goals are.
And c, we have to produce margin at the projectlevel.
(31:17):
Revenue can hide a lot of sins.
Adding a new job can hide a lot of sins.
Like, you could pick up the next big job andmoney comes in the door.
Margin is what you need.
The quickest way to forget about the $400,000receivable that you might not ever get paid on,
the quickest way to forget it is to make 400 kin margin, like profit.
(31:44):
Don't go don't go chase some revenue that'sjust gonna keep your guys working and busy, and
you may have to do the hard thing and lay acouple people off because they're doing a job
that's not making any margin or they're doing ajob that's losing money.
But I think being transparent with where youare and how you got there, first and foremost,
with the employees.
(32:04):
Second, making sure everyone knows we're gonnaget out of this together because this is just
part of the ride.
Remember, this is part of the ride building acompany from scratch.
This is a prerequisite.
You have to go through this stuff to learnthese lessons the hard way.
But then but then c, or three, we have toproduce margin.
(32:29):
Our work, our efforts at the project level,we've gotta be profitable.
Profitability is the thing that will get youout of the current situation.
Now it won't come quick.
It won't come easy making profits, especiallyin the markets that we're in now with, you
know, construction and the industry being softand equipment.
(32:51):
I would say most people that have boughtequipment in the last five years are underwater
on their equipment equity.
They don't have positive equity in theirequipment.
You gotta use what you've got for a while.
I totally get this.
I'm underwater on some machines, and I'mlooking back like, what?
What?
Why do we do that?
Why did we pay premium post COVID pricing whenpricing has now come back down to earth?
(33:14):
If your whole fleet's underwater, you don'thave a choice.
You gotta make do with what you got, and you'vegotta figure out a way to go make profit.
Now there are some little things you can do onthe side.
Right?
A, never waste a crisis.
Okay?
Never waste a crisis.
(33:35):
Get rid of all the things that are not makingyou money.
If you've got money or equity sitting in aditch, you know, a ditch witch or a skid steer
or bedding boxes, whatever, if you have moneysitting in things that is not producing revenue
for your company, get rid of it.
(33:57):
Never waste a crisis.
Don't be now more than ever, you cannot affordto be fat, especially if you're borrowing
money.
The interest is killing you.
So stop borrowing money.
If you've got things sitting out in the yard,even if you gotta sell them for 50¢ on the
dollar, get rid of them.
Put the cash back in your pocket.
Sounds like you're already doing some of this.
(34:19):
There are some games to play.
Some of these games get really expensive reallyfast.
I'm not a fan of factoring invoices.
I'm not a fan of taking out second lines onequipment that you've already got financed.
Some people do that.
I'm not a fan of like loan sharks that aregonna come in and, you know, give you a cash
infusion at at 20% interest or 25% interest.
(34:43):
I'm I'm not a fan of those things, becausenormally, it is a short term drug that
ultimately ends up bleeding you dry, and it'sreally hard to get off of short term drugs.
What you might consider is similar similaradvice I gave somebody else here recently.
(35:07):
Find someone that believes in you, whether it'sa customer, whether it is someone in the
industry, find someone that's got a little bitof money.
Maybe maybe it's not a lot of money, it's got alittle bit of money and wants to buy into your
company, wants to buy in some equity.
Maybe it's a 100 k.
Maybe it's a few 100 k.
They wanna pay you cash to own a piece of yourbusiness.
(35:30):
This is an option.
I know it's not a great one.
Everyone wants to hold all the equity, But whenyour back is up against the wall and you have
nowhere else to turn, you've sold everythingyou can sell, your projects aren't profitable,
I think you have two options.
One, sell a chunk of equity to someone thatbelieves in you.
(35:50):
Bring them in as a partner.
It infuses a little bit of cash into yourbusiness.
It hopefully, there's someone that if theyalready had some money laying around, they're
good with money and can help you become goodwith money.
That's that's option one.
And then option two is the not fun one.
Option two is becoming self aware.
(36:15):
Option two is understanding we got where we arebecause of the decision we made or multiple
decisions we've made.
Life is hard.
This business is making it even harder.
I don't want to sell part of my company.
(36:37):
I want to go down with the ship, and you grityour teeth, and you fight until someone forces
you to stop fighting.
And usually, what that looks like when someoneforces you to stop fighting is they force you
into bankruptcy.
I'm gonna say this.
(36:57):
Okay?
This is I'm gonna get people calling me and andsend me messages.
I have watched very and and very closely, bythe way.
I I say these things.
I think people roll their eyes like, there's noway he's seen this.
I have watched people that owe money multipletimes over what their company is worth.
(37:19):
So so let's pretend for a second your company'sworth $5,000,000.
I've seen people that owe $20.25, $30,000,000in debt on assets because of projects going
south, contracts going south, owners notpaying, and they never get forced into
bankruptcy.
(37:40):
You know who wins when a contractor that owns abunch of hard assets you know who wins when
when a bank forces them into bankruptcy andthey liquidate the assets, especially in
today's equipped used equipment market?
You know who wins?
The people who win in that scenario are theguys that buy cheap equipment from a bankruptcy
(38:02):
sale at an auction.
Nobody else wins.
The bank doesn't win.
They gotta write off a bunch of this stuff thatthey had loan values on the books for.
The contractor doesn't win because now he's outof business.
Banks want to see you stay in business.
A lot of people get this wrong.
They're like, ah, dude.
The bank's gonna try to take everything thefirst first chance they get.
(38:23):
The bank doesn't want your stuff.
They're a bank.
They want your money.
They don't want your stuff.
If they get your stuff, they gotta go sell it.
They gotta pay someone to sell it, a, first andforemost.
They gotta pay someone to appraise it, and thenthey gotta pay to write down whatever it sells
for because current state, no one's buying usedequipment at premium prices.
(38:43):
So they're not the bank's not making any money99% of the time by forcing you into bankruptcy.
I think you have a lot longer pathway torecover this little double bogey than you
realize.
Every time I've gotten through this, becauseI've thought my life was over, my business
(39:03):
life, not my actual life, I've thought mybusiness life was over multiple times.
Multiple times I've thought, oh, it's over.
This is the one that's gonna kill us.
When you get through it, you realize, well,that was just one hole.
I got all I got 18 holes left to play.
I double bogeyed the first hole.
(39:24):
No big deal.
We got through it.
Yeah.
We had to stretch some vendors out.
Yeah.
We had some employees quit or leave or yeah.
I didn't get to put I didn't get to pay bonusesout this year the way everybody wanted.
But man, it's a long journey.
And just because you've got one double bogey onthe scorecard doesn't mean you can't go have a
great round.
Doesn't mean you can't go have another greathole the next time.
(39:48):
You have a lot more runway than you think whenyou're going through Death Valley.
Death Valley feels like it's the longest,darkest, deepest hole ever.
It feels that way when you're going through it,but you got a long runway to get out of it.
And if somebody like me can take a company outof it, and and some other guys that I've talked
(40:10):
to who have been through it can get out of it,I think anybody can get out of it.
You gotta have faith.
You gotta have a plan.
You gotta be transparent.
You have to produce profit.
And you just do that day after day, week afterweek, month after month, and you wake up and
then you're like, woah.
400 k?
(40:31):
That ain't no big deal.
Yeah.
It sucked.
Got stung.
Ain't no big deal.
It feels like a big deal when you're goingthrough it.
It feels like you can just barely get by.
You can just barely make payroll when you'regoing through it.
But when you get to the other side, I knowpeople hate hearing this.
(40:54):
I know they get tired.
They roll their eyes.
When you get to the other side, you are betterfor it.
You're better for going through this.
You're a tougher mining, construction, HVAC.
You're a tougher CEO.
You're a tougher president.
You're a tougher project manager.
(41:15):
You're just a tougher human being, havingalmost died in business but rising out of the
ashes like a phoenix.
You're tougher for it.
It's a blessing.
This is the part that I said you're gonna hate.
This is the silver lining.
What you're going through currently is thegreatest gift you could ever be given in
business, I believe.
It sounds terrible saying that because I knowI'm gonna have this in my life.
(41:38):
I'm I'm I'm only 36, so I got a lot of yearsleft of business.
The biggest, hardest, nastiest problems, theworst years in business are actually the
greatest gifts.
That's what teaches us the most.
That's what teaches us how to be scrappy.
That's what teaches us how to be resilient.
(42:00):
As my good friend, Justin Holmberg says, that'swhat gives us the testicular fortitude to smile
the next time we go through it.
That's what builds this layer of scar tissuethat then becomes your shield.
(42:21):
No dude that's ever made it in business tobecome successful, to be the fat old guy riding
around the Lincoln smoking the cigar, no guyever got to the top on an easy path.
He got there by going through this exactscenario, almost getting killed multiple times
(42:43):
in business, but figuring out a way.
Putting his head down, making money, payingpeople back when he can.
If you're transparent with your vendors, yourvendors will wait as long as they believe you.
(43:03):
They'll wait.
They're not pumped about it.
No vendor likes to get stretched out on paymentterms, but they'd rather get their money
someday than never get their money.
And if you're transparent with them and yousay, hey, look, man, I I got caught in a
pickle.
I made a bad decision.
I'm learning from it.
(43:23):
I'm a young dude.
I'm honest.
I'm trustworthy.
I'm trying to build something.
I just need you to be a little bit more patientand you'll get paid in full, plus whatever
finance charges you wanna charge me.
I don't nah.
I don't like paying finance charges.
But but this is a reality.
If they believe in you, maybe you gotta go sitdown at their corporate office and kiss the
(43:45):
ring and and bow to the guy that, you know, isholding this account over your head.
But if they believe in you, they will help you.
They will not crucify you.
99% of the time, the vendor wants to see youwin because that means they get paid.
(44:05):
If the vendor forces you to lose, well, theyknow they're never gonna get paid.
Same thing with the bank.
They don't wanna see you lose.
So for me, some key takeaways are one, this youcan get through this.
There are there are people that have had it wayworse.
(44:27):
I've I just trust me on this.
There are people that it way worse that havegotten through it and built a successful thing.
They applied the lessons learned.
They went and made money.
They added revenue because revenue for a periodof time can hide a lot of sense.
They then skinnied up their operations and gotreally profitable.
They never got fat or lazy.
(44:50):
But there are people that have really run outof money and still figured out a way to win.
This might be a great time to consider apartner.
If you've never considered it before, maybeGod's trying to tell you something and it's
like, hey, dude.
You're out over your skis.
(45:11):
You need someone with some financial acumen tocome in here and help you get this right.
Sell a chunk of this thing off to someone thatbelieves in you, that wants to come in here and
be your partner, your CFO, your whatever.
May maybe that's what's going on.
I don't know all the details, so I can't giveyou all the best insight.
(45:33):
But I'm just telling you, man, it is ablessing.
And and someday, I know it doesn't feel like itnow, and you're probably punch in the steering
wheel.
Listen to this.
Someday, you're gonna realize how much betteryou are for living through what you're living
through.
I I just I I promise you.
(45:55):
Now for the rest of you guys that heard allthat, do you still wanna start a business?
You still wanna do this?
Because it looks cool on Instagram, the pickuptrucks, the the dozers.
You know, everyone's smiling with their shinyhard hats and vests.
Looks fun.
(46:20):
It's hard.
It is really hard.
And and I and I can guarantee you everybusiness owner that's on that's listening to
this episode right now, if they've been inbusiness long enough, they're shaking their
head saying, yep.
I remember when I went through my my momentwhere I took a customer I shouldn't have or I
(46:43):
got stiffed on a big receivable or I missedsome contract language and and the customer
bent me over with it.
Every everyone's been there.
Everyone's done it.
You you're not alone.
You you're actually, honestly, now just part ofthe club.
You guys have heard me tell the story of, youknow, my buddy who bought a Crotch Rocket.
(47:03):
I I was like, dude, you're not you're not awriter.
You're not a real writer until you lay it down.
And he literally went and laid it down rightafter that, not on purpose.
I don't think you're a real business owner.
Don't I think you're a real boss.
I don't think you're a real CEO until you gothrough something like this, until you get
these ball kickings and and till you build thisscar tissue, until you have this experience
(47:27):
under your belt.
And then when you do, man, you never forget it.
You never forget it.
The best lessons are learned by living throughthem and trying to sleep at night, not being
being able to sleep, not being able to, youknow, tell your wife, oh, man, things are
things are not as good as I thought they wouldbe running this business.
(47:50):
You you just don't forget those things.
So my feedback, to sum it all up, a, myfeedback is you have to have a positive
mindset.
You have to know you can get through it.
Don't think it's over.
Don't think life's over.
Don't think the business is over.
(48:10):
You got a lot more runway than you actuallythink.
I just I believe it.
I've lived through that that piece of it.
Two, or b, I forget how I number these thingssometimes, so forgive me.
The first thing was positive mindset.
That's one.
Two, make profit.
(48:33):
Profit is so critical.
And if you're not you don't have the data toshow whether you're making profit or not, or if
you don't trust the data, go spend some timediving into the data.
Be super transparent.
Number three, be super transparent with yourteammates.
Make them feel like owners in this.
Say, look, guys.
If we don't get this figured out, you're allfired because there's no company to pay for
(48:55):
you.
Or worse, you're all hired.
You're still working here.
You just don't get paid on Friday becausethere's no money in the account to make
payroll.
Be super transparent with them.
Make them feel like part of I know you'reprobably thinking, well, some of them are gonna
leave.
Right?
They're gonna get cold feet.
They're gonna say the ones that do stay, thoseare the ones you want anyway.
(49:17):
Those are the ones that are gonna help youfigure it out.
The ones that stay when it looks like thingsare dire, those are the ones you want.
The other ones that leave, they're not theythey they don't they don't feel bought in.
They're not the ones that are gonna help youmove the needle.
So even if you leave even if you lose half yourguys and you gotta you gotta shut a a project
(49:41):
down for a week or two while you rehire, like,man, you want the guys that that are gonna be
shoulder to shoulder in battle with the swords,ready to fight every single day because that's
how you make profit with guys that actuallycare, guys that not only care about the
company, but care about you personally as theguy, as the CEO.
(50:01):
So you gotta be super transparent with them.
I believe on top of all of that, I believe youwill look back someday.
The the 400 thousand's always gonna be 400,000.
It's it's real money.
I know it stings.
You will look back someday because you're ayoung guy, and you'll say, you know what?
(50:27):
Those lessons have made me way more than the400,000 cost me.
It's not gonna be next year.
It's not gonna be the year after.
It's gonna take a while for it all to come fullcircle.
But the only way our teams have ever gotten towhere we are is by the massive mistakes we
(50:51):
made, learning from them, applying thelearnings.
Like like, that's the only way.
That's that's why I always say I feel likewe're just in warm ups.
You know what warm ups are for?
Warm ups are for missed shots.
When you go on the golf course, you you'll hearthis all the time when you go hit balls before
a round.
(51:12):
You'll hear guys say, oh, glad to get that oneout of the system.
I'm gonna save my good shots for the round.
Like, guy will go up and hit a few drivers, hita few wedges.
He'll shank a couple in the woods.
Like, whoo.
Man, glad I'm hitting balls.
I got that out of my system.
Warm ups are for the missed shots.
Warm ups are for the screw ups.
(51:34):
Your first ten years in business, you're justgetting warmed up.
You're learning.
You're taking huge failures, huge ballkickings, punches in the mouth.
You're taking the missed shots because it'swarm ups.
Now what you do is you learn how to make theshots in the game once warm ups are over.
(51:55):
At some point in time, warm ups have to end,and it's now game time.
For us, I feel like for our business, we areright there.
We are like, maybe there's maybe there'sanother few seconds of warm ups going, but we
are we are playing in a stage now where it'sgame time.
We cannot afford missed shots anymore.
(52:17):
We cannot afford bad customers.
We cannot afford bad contract language.
We have to make shots in the game.
Not every shot.
We're still gonna screw up.
We're still gonna screw up for an employee.
We're gonna screw up for a customer or avendor.
That's part of it.
But we better make a lot more shots than whatwe miss when it's game time.
(52:41):
In warm ups, you just have to stay on thecourt.
You just have to stay in the game long enough.
Stay stay in the warm up line.
Miss your shots.
Hopefully, you make a few because you gotta payfor the missed shots.
But, man, the game hadn't even started.
If you're if you're this young in business andyou're and you're taking a big loss, a big
(53:05):
$400,000 mistake, like, it's it's warm ups.
And now you gotta apply the lessons that you'vejust lived through so that you don't live
through those things again.
Because there's a bunch of things that brokedown in the process to get you where you are.
It's not just, man, this customer stiffed me.
(53:27):
I I said this recently.
It's not the customer's fault, and you knowthat.
I could I can hear that in your voice.
You've already embraced that.
It's not the customer's fault you're in thesituation you're in.
It's it's it's the leader's fault.
It's it's never been the customer's fault thatwe didn't get paid on a receivable.
(53:49):
It's never been the customer's fault.
I'd love to blame the customer.
I used to blame the customer.
Was like, man, that customer, they're a bunchof deadbeats.
And then I look around.
I'm like, well, wait a second.
Who's the idiot that signed up to work withsome deadbeats?
That's whose fault it is.
So, man, I I hate it.
I I do.
I I wish I had some magic, potion, some magicpill, some silver bullet, some trick that I
(54:14):
knew to get you out of it.
But I think being transparent, asking forforgiveness from some vendors, asking for some
deferred pay terms, being transparent with youremployees and your team members, being
vulnerable.
I know it's tough for us tough guys to bevulnerable, us macho guys, be vulnerable with
them.
(54:35):
At the end of the day, you got a lot morerunway than you think.
I promise you.
You got a lot more.
Even if you don't have any money in theaccount, you got a lot more runway than you
think.
There are people that love and I don't know ifanybody on here if if if you're somebody that
listens to this podcast that wants to help thisyoung man, reach out to me on the Purdium
(54:57):
hotline.
I'll put you in contact.
There are people out there that love to helpfolks in your situation.
They love to finance.
They love to loan money.
Now be beware beware of the loan sharks.
There are people that love to invest in guysthat they believe in, young guys that that that
know they can produce results.
(55:18):
I just made a bad shot.
You have a lot more runway.
Now's the time.
Don't feel bad.
Don't feel sorry for yourself.
Now's the time to get creative.
Now's the time to be vengeful.
Go figure out who the next customer is, wherethe next gross margin's coming from, how to get
the right employees doing the right things toreally move the needle for your business.
(55:41):
Never waste a crisis.
You're living through a crisis?
Don't waste it.
This is where you really sharpen the pencil andget good at business.
And this is what, in my opinion, takescompanies that that are really a hobby.
You know?
If you if you're going from a hobby business toa legitimate organization, you do it in times
(56:01):
of crisis like this.
You figure out who you are.
Who are we?
How do we respond to this?
How do we get really good at running abusiness?
You're really good at your craft.
You can dig ditches and weld pipe and whatever.
How do you now become a really good business?
Well, you do it in times of crisis like this.
So that's what I got.
(56:22):
Man, I'm praying for you.
I I love getting your videos.
You've sent several.
I love them.
Praying for you.
I I hope you keep me updated on your path, onyour journey.
I hope if nothing else, this gives yousomething to think about.
It's a mindset shift.
And for the rest of you guys, I hope you'regetting your pretty in.
We'll do it again tomorrow.
Popular Podcasts
Law & Order: Criminal Justice System - Season 1 & Season 2
Season Two Out Now! Law & Order: Criminal Justice System tells the real stories behind the landmark cases that have shaped how the most dangerous and influential criminals in America are prosecuted. In its second season, the series tackles the threat of terrorism in the United States. From the rise of extremist political groups in the 60s to domestic lone wolves in the modern day, we explore how organizations like the FBI and Joint Terrorism Take Force have evolved to fight back against a multitude of terrorist threats.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
NFL Daily with Gregg Rosenthal
Gregg Rosenthal and a rotating crew of elite NFL Media co-hosts, including Patrick Claybon, Colleen Wolfe, Steve Wyche, Nick Shook and Jourdan Rodrigue of The Athletic get you caught up daily on all the NFL news and analysis you need to be smarter and funnier than your friends.