Many of you know I shut the shop down at the end of 2006. Most of you don't know why. I need advice. I fully expect a few assholes to bash me as they all do when anyone shows weakness here, but honestly, I'm looking for advice. We were building a lot of T-buckets last year. Unfortunately we had a HUGE accounting error. We figured out the cars "build cost" in sections. Unfortunately, somehow the biggest section got left off and I didn't catch it till we were knee deep in shit,,,,, the motor/trans section. This includes all bolt on, headers, dress up, EVERYTHING. Also towards the final quarter of the year we had a "customer from hell". He added everything, every option, made changes, and being a "car guy" as oppossed to a "businessman" I allowed the changes on "a handshake". Well, once the time frame came around this guy wanted his car RIGHT THEN, not allowing me anything for the extras he added. Being that his "time frame" was on paper and my "addidtions" were not, I was screwed. He sued, no biggie. He called EVERY city service he could and essentually "shut down the shop". I had the police and fire department in my shop DAILY, even though most was pure bs reporting. Well, with the accounting error, the MOST we made on any of the cars was $2000, and rent/utilities/overhead was around $3500, not including living expenses. Rather then doing what many small shops do and file bankruptcy, I am building my ass off at home, eating the loss, and working another job to help make up the loss. We are even selling our house to get the equity in case others want to back out. This is why you have seen so much of my parts for sale, just trying to clean up to move, and make some money to help. No car will have taken more then 18 months start to finish. Most of the T's were in the $13k to $15k range and that includes a NEW GM crate motor. I have one guy from Tucson trying to file fraud charges, although I can show reciepts for everything. I just need time to finish them up. I never asked for more money,,,,, just TIME. I lost my ass on that shop (about $75k total). I'm willing to (an am) selling my HOME I lived in for the past 18 years. I have sold (and still selling) many of my prized hot rod parts collection, to help. None of that seems to matter to most guys. I ask you HAMBERS for any advice, either here or in private. Please keep the bashing down to a minimum, as you never know when you need MY help. Ask ANY AZ guy that knows me, I give my right arm to help people when I can. I just feel I have nowhere to turn now. I get to go now, Mesa cops are at my gate.
WOW. It sounds like you plan on trying to get back on your feet and in the same business owning your own shop again, and that in itself is admirable. The toughest lessons are the hardest learned. Handshakes don't mean what they used to as I'm sure you now know. Let your work speak for itself. Have your friends in the Tuscon area give you references for future projects. You're obviously going to take the hit (I'm surprised and impressed that you didn't file for bankruptcy) I hope that it doesn't effect your family too badly - always keep them in mind. When you do get your ne shop up and running someday, enlist the services of an attorney to draw up ironclad contracts for EVERY customer to sign and consider also enlisting the services of a part time accountant. I'm sorry I can't offer any more advice, but it sounds like you're playing the best hand with the cards you've been dealt. Good luck, Hombre.
No, will never open up shop again. Maybe just go back to building cars on my dime and selling them, but never again will I open doors to a comercial shop. As for filing bankruptcy, those guys bought a car built for them in good faith, so I think filing and leaving them hanging out the money is pure chickenshit.
Sorry for the loss brother. The man upstairs will get you on-track again you just gotta have faith. And yeah, very admirable to know you plan to continue what you are doing even from your "home shop". Keep strong and Good Luck!!!!
Good things come to good people.....it seems rough now, but it will surely work out in the end. Nothing worth having or doing is free..... stick with it and continue to keep your head up and pride first!
Seems like the good guys, that try to make a honest living, and stand up to do the right thing, are always the ones that get screwed. I'm slow I know, but why are the cops envolved?
man wish you closer i would help you in what ever capacity i could. from a distance all i can do is give you my best wishes, and remeber you in prayer. i would like to think being a stand up guy and fulfilling your contracts, even at your own expense, would make your clients happy.
Can't think of anything bad to tell ya bro. You're gold to me. Uh we got room in the basement, with a little we can make you guys a nice apartment. The weather sucks but maybe a change of address is in order. It'll give you a chance to catch up. I'd offer to rent you our other place but you don't wanna live in that neighborhood.
bro, it sounds like you're already doing what's best for you and the mrs., working your ass off to dig out of that hole. i would HIGHLY reccommend that you NOT file bankruptcy! being thirty or sixty days late on credit cards or loans is waaay better than a bankruptcy on your credit. a li'l hard work never killed anyone, and god knows, you're no stranger to hard work. you know, or you should, that if you guys need a place to stay for a while, even though it's not too close to lake havasu, casa del tred is always available to you. and like i've told you a million times before, if you need help moving or what not, just call me. whatever i can do, i'll do. hell, once i get a couple more bucks in my pocket, maybe i can act as a pawn broker and buy some of your prized possessions, then sell 'em back to you when you're ready... but like i said, it sounds like you're doing exactly what you should do. tred.
That isn't what you would be doing unless you do it. All it would do is get everyone off your back. You can still finish their cars.
I also had a 5500 sq-ft shop, but with all the hassles it just wasn't worth it. I now buy my own projects, build them and sell them as a private party, no BS to deal with. best of luck. Dave
I'm truly sorry for your problems and really admire you for wanting to build your way out of it. As a small businessman, I appreciate your predicament and we've been to the edge sevral times, just haven't quite fallen over yet. I am not sure how many cars you are still committed to. However, I would write each person a detailed letter outling where you are,what you owe them and a reasonable time they can expect their job to be completed. Then,depending on whether they owe you money,or you owe them having collected their money, they can either claim what you have done so far or wait for their product. Either way, an honest car guy would appreciate your sincerity and, while disappointed in the time line, give you an opportunity to make good. There's no need for any one here on the HAMB to bash you. We all sympathize with your position,admire what you're trying to do and know what idiots some folks can be. Best of luck.
I'm super sorry dude... that sucks... I'd try to not sell the house though, any customers still breathing down your neck I'd try mediation or arbitration with. Good luck man....
I agree 100% with this--file! That keeps anyone who wants to be a jerk from suing and crushing you the rest of the way; finishing and delivering anyway covers what is important to you, honestly delivering on your commitments. You deserve a bit of shelter and protection as you finish up.
Unfortunately I have heard that same kind of story from a number of honest hard-working guys that just wanted to do what they love. They even got squeezed by family and friends who ordered up all kinds of mods and crazy ideas and then balked at the price, couldn't pay, or expected "the hookup." And yeah, then there are the "clients from hell." I guess I'm not sure what kind of advice you're asking for, but I admire your resolve to deliver the cars you promised and not leave people hanging in the breeze. I think it's too bad that you are going to let this kill your desire to run a shop. Why not take this as "The Price of an Education" and do it better next time with the knowledge you gained this time around. Remember, Harland Sanders had about a hundred business ventures go bad before he opened a little restaurant selling fried chicken. Or not. You would know better than I do what's good for you. Either way, sorry to hear about your luck, and I wish you the best in whatever you decide to do.
Add to the letter that the alternative is bankruptcy which neither you, nor they, want. They don't need to know that you're not really contemplating it. Good luck...you sound like you could use some. And I admire your openness...
Instead of selling your house, can you refinance and cash out the difference? Many of these places are offering home equity loans of up to 125% of the current value, and that might be an alternative to selling the homestead and adding more problems to the overall mix. I agree with what you're doing as far as doing your best to fulfill your orders - that shows a ton of integrity. I'd help if'n I were closer, but as the others have said, our wishes are with you. Good luck, and be careful. I wonder if you could start the paperwork for the bankruptcy, but not completely file it - just in case some asshole attempts to come after you for it all. This way you can still do your best to fulfill the orders, but have an umbrella to hide under if necessary.
I closed up my shop about three years ago because of dumbass customers who couldn't decide what they wanted untill After I was half done with their car. They would change their mind every week and assume I would eat the cost of whatever they decided they didn't want anymore. I build what I want now and sell it. If you don't like it , don't buy it. Life is soo much better without customers......
Did you pre-sell these cars? As in, you took deposits and/or payment and now everytime one is built you loose $3-4,000? I just want to understand your situation. Not figuring the engine and tranny costs is a major mistake on a T. Anyhow, second question, is the house paid for? If so, how about an equity loan to pay some bills? Third question, do you have a homestead act in your state where by you can gain protection from creditors? If so, file as soon as possible if you haven't already. What I'm getting at is trying to avoid the sale of the property. You have to have some place to work and live. I guess the only thing you need a lot of right now is time. I been there and the only way to get out of a rut is to start digging. Good luck.
The name of the post is asking advice......hire a lawyer...I know you don't want to be a dishonest asshole who tries to duck out on your commitments, but by the same token you need to protect yourself....talk to a lawyer ,there may be a way to protect your home and paycheck. You don't want to find out the hard way what a jerk or two can do to ruin you forever. I am not a lawyer, nor in love with one, but good sound legal advice saved my ass!
You get mad props for stepping up to finish, and honoring your commitments. If you're asking about how to make the hanging customers happy, here's advice. I deal with similar situations at work all the time, we buy tons of parts, and vendors let us down frequently. First, be brutally honest about your situation, because like it or not, any customer who has paid is in this with you. Second, develop a plan timeline to finish each car, and it better be 100% accurate. Deliver timelines to the customers and stand firm that you'll adhere to it, and won't pull theirs forward at another customer's expense. Robbing Peter to pay Paul timewise is a common failure. Even if it seems to make the customer happy, it erodes the relationship because it teaches them that complaining louder works. And thus they complain louder Third, keep your customers updated showing progress. Emails with pictures are GREAT. You want em off your back, it's gonna take extra communication effort on your part. If they're in line behind others, send pics of each car you finish to show that work is happening, and they're moving up the list. Some thing with progress pics of their actual car. No customer email? Get a polaroid and a book of stamps. Updates need to be at least weekly, if not twice a week, and preferably adhere to a regular schedule. Basically, you've got to treat it like they're paying you by the hour, instead of by the car. But above all else, do not make one single commitment you cannot honor 110%. Because no matter how small the commitment is, if you don't honor it, then the trust level is back to zero. Generally, police and lawyers only come in after trust is lost. Don't let it sour your future business plans. Most successful businesses are built on the ashes of an unsuccessful one. Best of luck to you.
Dude you know you can call me if ever you need an extra set of hands to help with the labor. For all the knowledge and direction you help me with I can at least help out with the return of my work. you know the number.
Thanks to each and everyone of you. The cops were here, because one guy wants a complete refund right this second, or a completed car right this second. His car will be done and drivable on the 25th. As for his money it's all tied up in the CAR. Yes, AZ is a homestead state, but I just would rather be done with everything in 2-3 months then screw up(even more then it is) credit for another 7 years. I own enough of my house to buy out all the cars, plus leave with about $20k to start over. As for a refi, working for yourself and all the financial bs that goes with closing a shop, kindof kills that idea.
I thought about this some more on the way home and I really don't think selling your house is the answer. The housing market, in general, is crumbling. I spoke with a realitor yesterday who said she was selling 6-7 houses a month up to the about three months ago and now she's lucky to sell two and South Texas is a growing market, or was. Your going to get hosed trying to sell this house in a hurry, in a down market. You can expect to lose 30% of your equity if you do an as is quick sale. You are already losing money don't make it worse. Another reason to hang onto the house is your mental well being. I went through some real hard times back in the 80's when the oil industry went to shit so I know what I'm talking about. Discuss the bankruptcy options with an attorney. The federal bankruptcy laws have changed recently and makes it harder to file. I wouldn't spend another cent until I paid the attorney. It will be worth it. I'm sorry to see any business go down like this and maybe everyone should check themselves to be sure that you are set up as an LLC or other corporate entity if you are building cars for a living. For those of you who don't know, the LLC makes all the difference in the world when something like this happens. It allows you to draw a legal line in the sand when it comes to credit protection. It doesn't cost that much and everyone in the car building business should be listed as such because it is a high risk business. If there is anything I can help you with please let me know. Wish I was there to help you out with a few hours labor, if nothing else. Good luck!
s.r.i. ,it sure sounds to me like you are a real stand up guy. most buisness men in your situation would turn tail and run and hide behind the bankrupt wall.i admire the fact you are trying to make good anyway you can , it just seems unfair that your family has to take the heat with you. i hope your reputation helps get you back on track soon,god bless and good luck. best wishes , mike.
I'd be thrilled to call you a friend. It's when shit goes bad do we REALLY see one's character. Your character speak volumes. Keep on truckin'!!!!!
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