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Failed again, need a shoulder, advice,and a pep talk

Jcrew2Jcrew2 subscriber Posts: 3
edited July 2007 in Thought Leadership
This is a long post, but I`m going thru a lot right now and the only thing I can think to do is lay it all out there and see what comes back. So here goes.
I have always had good organizational skills, creativity, ambition and the desire to run my own business. I thought it would be something involving entertainment early on, because of my interest there. However later, I made what I thought was a smart decision to try my hand at the building industry since I had a friend with skills in various trades, that also needed my help financially. I figured I would get back into the entertainment industry once I was successful at this. At the time it seemed more stable, and provided more to fall back on in the event things didn`t work out. In retrospect all of that may have been just a way to not go at it alone.
During the last 15 years or so, I have worked a job to support both of us while we tried various businesses such as woodworking/custom cabinet making, remodeling, and new home construction. My primary role in these businessess was been the organizational side and finance, but I did hands on work as well. My friend is the primary person in charge of the actual building or construction of our products. We have tried to the official and unofficial versions of business, meaning with business cards, insurance etc, and without. Off and on, we have had some good opportunities along the way, but like many small business start ups, we lacked enough funds to make a real go of it on some occasions, other times we just couldn`t complete the jobs in enough time to make any money with such a small crew and low rates. Being in a small town, you can`t charge a lot of money for some things and there is always someone around to do it cheap. Some of our problems came from a lack of knowledge about what it would actually take to complete a task. The ability was there but...anyway, you live, you try, you learn. I can estimate a lot better now that`s for sure.
Fast forward to the last few years. We decided to skip the small stuff and go for the whole product a few years back and get into new home construction. Mainly spec building, but looking for opportunities to build for others as well. The market in our area seemed as though it would support it especially since we were just going to build a couple of houses or so per year. I made enough at work to finance the first venture out of pocket even though I was taking additional risk by delaying my tax payments and using some credit accounts for some financing but here was my plan.
My friend had some family land. Phase 1 of the plan was to build a house on his property out of pocket. He would do the majority of the construction and we would hire a few guys to help when needed for cheap labor rates. Once completed, we could borrow money against the house to: A-payback money I owe in taxes and credit cards, B- help to finance the next project. Now, speaking of the next project. I purchased 2 lots across town from a guy I know for a good price. Phase 2 of the plan was to build homes on each of the 2 lots purchased and sell them. I obtained construction loans for each of the 2 houses to help finance the costs, combined with the money from the equity loan, we should have enough money to cover costs. What about the cost of the equity loan you ask? Well my partner was to pay that note since he and his family would live in the house, and with the construction loan and the combined equity money, we finally have enough money to pay him a decent salary. I would make my money on the back end. I had insurance, licenses, and even a couple of prospective buyers lined up.
Now comes the problems. The first problem is that it was time to start construction on the 2 new homes but we began having problems finishing his house. We are about 80% complete now. Of course no money can be borrowed against it until it is done. The second problem is that the deadline to complete the 2 homes across town is October of this year and it is now July. The third problem is that without the money from the equity loan, I don`t have enough to finish either house based on the amount the banks would loan me. The fourth problem is that I have run out of time and the money I owe in taxes and other bills is due. And the 5th problem is that my job situation has changed I can`t afford to pay the money that is due or pay for the rest of the construction costs to complete the first house.
So here I am, phone ringing with bill collectors on the other end, hoping I can find a job soon and that maybe the government will let me make payments on the money I owe and not throw me in jail. Construction insurance policies cancelled because I couldn`t make payments. Somewhat debating whether to take the last $5000 I have and ration it out on my familys mortgage and another bill or two, or combine it with some of my own sweat to try and finish the house even though it still would leave me short by $4000 according to my calculations. Sometimes I`m mad at my friend for not doing everything he could to help out and keep me from going under. Then I realize that is just pointing the finger at someone instead of taking responsibility for my own decisions which is what a leader has to do.
I`m losing everything. All the time I went with bad credit after the early endeavors, to finally get back in good shape, to see it go down again. I`m trying to hold it together but, I just don`t know...I took all these risks, and not even for a big payday, this was just to get off the ground. I was more than willing to wait for my time to get paid. Breaking even and paying my debts would have greatly satisfied me. But instead it looks like all I will get to walk away with is debt. I sacrificed everything, money, time with my family, worked 80hrs a week for who knows how long at a job I`m sick of. Supported my family, his family, guys who helped out. I thought when I finally came home from working on the road I would be able to justify being gone so long to my family, and even though they`re just happy for me to be home, I`m just trying not to lose it, because I feel like such a failure. To top it off, I haven`t been able to find a job (a job that I`m sick of) and I need two of them to try and make ends meet. The only good thing is that whenever the house gets finished, I`ll be able to get some money to go towards this mountain I created. Even though by then it`ll be too late.  
Well thanks in advance for reading/listening/commenting/advising.
 Jcrew22007-7-9 19:25:4


  • NuevolutionNuevolution subscriber Posts: 30 Bronze Level Member
    Jcrew2,Seems like you put all your eggs in one basket. After reading your post, I can somehow relate to you. I think, one of your biggest problem was not "PLANNING", no one plans to fail, "people fail because they don`t plan", with projects of that size, did it ever occur to you to use some sord of project management tool like Microsoft Project? that helps you budget and details all the tasks for you?Secondly, I think you`ve just been to helpful to other people[your friend] and not getting anything in return. For the sake of your family and yours, with the last 5,000 pay your taxes, the rest will all fall into place.
  • Jcrew2Jcrew2 subscriber Posts: 3
    First I want to say thanks again to everyone for responding. As an entre-poor-nuer of many years, I know many of the things you guys said. But I still needed to hear them from some other people just to try and pick myself up. You know the drill, I`m feeling low right now...way low. Confused about decisions I made and those I need to make right now.
    I`m going to try and address some of the comments/concepts mentioned and by all means keep the feedback going. It`s the one thing I`m looking forward to right now. Everything helps.
    CampSteve and Steve W.
    I can sell the other 2 lots that I own, but not until I close out the bank loans that are now associated with them. I`ve been delaying my decision to do that until the last minute, hoping that I might get the first one done, get the equity money and still be able to salvage the plan. That`s why I`m considering using the last 5 grand to try and finish. Actually 4 grand, set aside 1000 for next months mortgage, and since I can`t find a job anyway, roll up my sleeves, put on my boots and start painiting.
    I haven`t asked, this time at least, but I wouldn`t expect to be able to borrow funds from family and friends based on their "work a job, don`t spend your money attitude". Plus I  know they will continue to think I`m crazy for this latest effort. To be honest, I feel too embarassed to ask anyone for money because it all sounds so foolish. To go into this much debt, take this much risk, especially tax debt. I know that`s the life we lead as entreprenuers, one of high risk, high debt, but that`s why many of us go it alone. It`s hard enough to step out onto that limb, who needs ridicule and "warnings" when you already know you`re taking a chance.We just believe we can do it. Others just aren`t cut from the same cloth as us. But when it doesn`t go right, it ain`t just the grass that looks greener on the other side, it`s the cloth too. 
    I don`t know who else to ask for money. Especially with low to no profit margin to start. I considered "Prosper", the peer to peer lending network.  But I`m not sure about putting my social and other information out there like that. Anyone ever used them? Any other ideas? Banks are out at this point for sure, credit standing is on the decline plus they don`t give construction loans on homes that are more than 60% complete.
    I did plan, and I even used some Microsoft products like Office and Excel. However, it seems to me that a part of venturing into this world of entrepoorneurism involves constantly doing things that don`t fit into or weren`t part of  "the plan" or don`t meet "the schedule". I say this because, when you think about "planning",  you think of things that add up in the traditional sense. Like you said, no one plans to fail. But in this thing we do, a lot of times you choose to do things in ways that are abstract and unconventional. Hence, you may easily not hit your target calendar date, yet you may still be following the path according to your plan, therefore it still seems to be working or still have a chance to work. You have to constantly improvise, keep trying, don`t give up...you know all the stuff that we`ve said here.
    Steve W. and Tikki50:
    I know that I should look at the positives of my efforts, but thats difficult to see with all the negatives surrounding me. "At least I tried" just isn`t too much of a motivator right now. I do have tools and equipment I purchased that can be used if I start to subcontract, but that`s like starting another business, and one thing I`ve learned is that it takes two things to start a business,  time and money. Right now I don`t have either.
    Craig L.
    Thanks for your post. I was actually looking forward to it after reading some of your others, but I`ve got to say...you lost me on this one. The universe? The closest I could come to understanding what you meant is that you are saying...care or don`t care, choose one. Help me out here. I did get the part about people being much worse off than me though. I work in a hospital, and I have learned to count my blessings, because I know that my problems are nothing in comparison to some.
    Thanks again everyone. Keep em coming.
  • Jcrew2Jcrew2 subscriber Posts: 3
    Hey thanks again guys. It`s been a couple of weeks since I posted. I`ve been job hunting, and thinking, but to tell you the truth, I have also been enjoying spending time with my son. I`ve been working on the road for so long, and this is the first time in years I have spent day after day after day just hanging out with him. He is 9 years old, and I`ve been reading with him, playing video games, going to pee wee football practice, swimming. I`ve been cooking at home so my wife doesn`t have to. Family Bar-b-ques. Enjoying life a little. The clock is ticking though and I have to make a move soon. Either take my last few dollars and some sweat and try to finish, or focus more on trying to get a job and keep the bills paid until my partner calls me with the news that he is done which could be a while. My credit is going down the drain in the meantime because I haven`t paid several bills, choosing instead to just sit on the money while I figure out what to do. But hey it`s credit right, it goes up, it goes down, it can go back up right? I have also asked a few people in the construction biz for advice/money. No money but a little advice. I learned a few things. Nothing that will bail me out of this situation yet, but still some good info. Thanks for your support guys. Keep that advice and info coming. What do you think about the choice of paying the bills or using the money to get as much done on my house as possible? 
  • Jcrew2Jcrew2 subscriber Posts: 3
    Ok, sounds like a plan to me. I am sizing up where I am right now. My partner has made some progress and I have the money for the mortgage this month so I think I am going to nickle and dime the creditors with some $50 to $100 payments and some phone calls. In the meantime, try to wrap this thing up. It`s my biggest asset and really the only way I can get out of this situation. Plus, having the time to hang out with my son, along with the job market woes, helps me to realize the very reason I was so willing to take the risk in the first place. Thanks guys, I`ll keep you posted.
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