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Origins Story #1 How did I get here?

So it might be time for me to revisit how I got here. I was working about 60 miles north of Long Beach for an e-commerce company (we used to call these guys mail-order companies). My mother lives in Long Beach and as we moved out from Arizona we all settled into her house. We were looking for a place closer to where my work was when I called into the office and told my services were no longer needed. You never get an honest answer as to why, so I cut the owner off and just said thanks and that was it. Now I had moved from AZ and even though we were secure in my mother’s house we didn’t know what we were going to do next.

My mother had been using this store called the Postal Annex. She used them to print off her church newsletter because they had the cheapest color copies in town. She had heard that they were selling the store. She suggested I buy the store. Where else would she get her copies if I didn’t buy it. I didn’t know anything about buying a business. I actually had Kim go in and ask them about it. They told here they didn’t know anything about selling a business and that they had contracted a broker. She got the broker’s information and gave it to me. I called him just to check it out. Now this broker was in the business of selling businesses. He didn’t make any money if someone didn’t buy the business. He put me on the train and I never got off.

The first thing the broker got me to do was to give him a check for $5000. His logic was that once I made an offer (with a non-refundable deposit) then I would be in the driver’s seat. This is true. So I gave him the check and offered them their asking price of $89K. They accepted the offer. Supposedly I was now in the driver’s seat. The reality was that the broker was in the driver’s seat. Before I made the offer the only information I had was that their adjusted net was $90K per year. I now know that number is meaningless. It is true that I couldn’t get more information until they had accepted my offer.

As a side note I was not aware of BizBen.com. It is a site where business are listed for sale. In fact this business had been listed there. Here is where you can find similar listings. All of the information there is debatable. What you are getting is the price the owner is asking. Adjusted Net can mean anything from gross profit (sales – sales cost) to actual profit. Most likely it does not include the cost of employees. To assume anything other about that number is worthless. Now I would want to know the price the seller is asking, their gross sales, and their total rental expense. That is not enough information to make a solid decision, but if you know the business a little you can make guesses about the rest. Other than that you make an offer and then dig into the finances.

The first red flag should have been that the current owner did not have good finances. Simple questions like “How much did you pay for shipping last month?” were beyond his comprehension. “I pay the bill when it comes in” was his response. I found out later he paid the bills when he had the money. They were going out of business slowly.

The Postal Annex is a franchise. There is good and bad with that. I gave them $18,000 last year. Did I get that value back? I think so, but that is another discussion. The key is that the government requires certain cooling off periods for signing contracts with franchises. That is a good thing in my value system. I didn’t really understand all of that, but the effect was that the broker told me that some things needed to happen pretty quickly. He was in full control of this process. The franchise had to get me some paperwork and I had to sign that I got the paperwork by a certain date. There were two things the broker was pushing for, first he wanted me to get paperwork done in time to attend the franchise’s training. I couldn’t attend until I had the paperwork for a certain period of time. I hadn’t signed anything except that I had received their paperwork, second the broker was pushing me to get in the store for the December rush. He claimed (not without reason) that December cash flow and profitability was the greatest and that I did not want to miss that but dawdling.

I can’t remember why I agreed, but I paid for and attended the franchise training in San Diego. Now that I have had the store for 2 years I can see that the training was a good thing. In my mind I hadn’t decided to go through with buying the store. I kind of learned about the business that I was getting into, but some things they said I didn’t like and I still don’t follow. For example they recommended that every customer sign a release of liability before we shipped anything for them. I know that the franchise sees all of the bad stuff that happens. I thought it was a real bad customer experience and we probably never do that. Another thing they recommended was that we pay the employees who do notaries a bonus of $2 every time they do a notary. I questioned them why a store owner would do that. They kind of just said that it was customary. Well I have never done it and that is about $5000 in my pocket. There are other things, but that too will be another story.

In short I signed the documents and I never got off the train. We closed the deal and now I own the store. I still feel like it was a good deal, but lets look at the downsides. I lost money the first year and I just made $60k last year. I still live with my kids at my mother’s place. Is this store going to get me out of my mother’s house? Not if I don’t do something drastic. That $60K has to be north of $100k just for me to think it is possible to live here in LA. I like the work, I really do, but it is 13 hours a day 6 days a week.

Here are some intangibles. The store is across the street from the High School where 3 of our kids go to school. After school they come here and hang out in the back with their friends. Priceless. Yesterday Kim and I went and visited a store in Pasadena to see what we liked about what they were doing. In the middle of the day Kim and I were gone for about 5 hours (ok we got lunch and saw a movie too). That was nice. When I taught HS Math for two years I never thought about the fact that I could not just get up and go to the bathroom whenever I wanted to. It never occurred to me. Soon after working in a bank I got up to go to the bathroom and it dawned on me how incredible that was. I don’t appreciate that anymore, but I do remember that moment when it seemed incredible. I am trying to enjoy those moments that are special about owning this store.

Are you profitable?

That is a great question without an answer. Or at least not an real good answer. You would think, hey you got some money and you paid your bills if there is anything left then you are profitable. I don’t want to get to technical, but it is a lot more complicated than that. I didn’t understand the complexity of answering that question before I started. Today is February 17th. Here are my numbers from the beginning of the year, about a month and a half.

Sales: $ 43,253
Expenses: $ 41,743
Profit: $ 1,509

OK so at this very basic level we are profitable. BUT! There is more. Included in the expenses are $3,000 in “distributions” essentially money I paid myself. So I guess we have made $4,500 in a month and a half month. That works out to $36,000 per year or roughly $18 per hour. That is not enough to live in LA. I went back and looked at last year’s numbers for the same time period.

Sales: $ 41,206
Expenses: $ 38,271
Profit: $ 2,934

And I took out $2,151 so you might say that I made $5,000 last year during the same time period. Well that is worrisome. Why am I making less?

I used to work at Hi-Tech and Finance companies. I am too analytical. One thing I preached all the time was analytics was only useful if it helped make a decision. I believe it is important to have the business decision that needs to be made before the analytics are reviewed. I want to make more money. So what am I willing to do about that. I either need more sales or less expenses (or is it fewer expenses?) Sales were a little higher. Do I need more customers? (Advertising/Marketing) Let’s see last year during the time period I had 1,987 customers and this year I had 2,063 customers. So that is improving but only by 3%. Maybe that is where I need to focus. Expenses as a percentage of sales did grow, but I am pretty sure I know why. Last year we raised our rates on our mailboxes and we gave everyone an opportunity to pay as far as a year in advance at the old rate until March. Mailboxes are highly profitable so even though our sales are up our sales of Mailbox service is down.

Mailbox Service Sales
2015: $10,321
2016: $7,997

Now looking at the bigger picture whether the number is $4,500 or $5,000 both numbers are way too low. We are making progress, but I need a much bigger jump in sales, like double. I need to buy out some local competitors. That will have to be another post.

Fired!

I didn’t think it was going to happen, but it did. I was fired today. I will try and document more later. I am still processing what this means. Of course the first thing that it means is that I don’t have a job. I can always return to McDonalds.

New Boss

So things have changed at work. (It is just a job) Usually when there are job changes a job opening is posted and people who want the job express interest and then if they are chosen they move into the new job. Well this morning my boss calls me and then tells me that I have new job. (It is just a job) Later that afternoon after all the announcements and after I had talked to my new manager he calls me worried that I live in France and that may be a problem. I think he is worried that it will reflect badly on him and he is trying to cover his tail. Trying to look on the bright side of things I don’t work for him anymore. I told my new boss, “I live in France” He didn’t seem to have an issue with it. I guess he figured that if I lived in France before I came on board that it must be ok. I figure I have a few more months of hiding out if I need to. Worse case I go home early. Whatever it is just a job. I am well paid ($123K according to BofA. That includes $2K for a pension $3K for 401K matching, and $8K for health benefits) I don’t need more money. I like the hours here in France. I work a lot more than I should because it is easy. I don’t see making that extra effort in AZ. I figure 8-5 is good enough. I am a little miffed by this whole thing, but I think it will be ok. Can you believe they didn’t even ask me if I wanted to do this new job? My boss was so bad at communicating that I often thought he was just looking for a way to get rid of me. That stress is gone for now. I figure it will take them a year just to figure out what they expect me to do and whether I have done it or not. This has to be the least fulfilling job I have ever had. I am determined to stick it out. I am in a pretty bad mood now. We have school tomorrow and I am not even looking forward to that. Typical of the way I do things I just had to go in and do the dishes. That made me feel better. We had the missionaries over so there were a lot of dishes. I didn’t do that great of a job so I am still in a rotten mood. It isn’t helping that I haven’t drank any Diet Coke today and I may be having withdrawals. Did I even mention that we got a notice that we are not allowed to recommend people on Linkdin. That is an official company policy. Can they even do that? They probably can’t, but just telling people they can’t will stopped it anyway. (It is just a job) I hope that I will have more interesting and positive things to say next time.

All in one post

Sometimes people can express better than I how I feel about things. John Stewart captures very nicely how I feel about what has happened this last week in AZ. I don’t know if it is might be more disturbing that people here in France are not surprised. They view it as something we are used to in the US. They assume everybody has a gun and that shootings occur regularly. Thankfully they do not. I don’t think there is a way to completely stop these things from happening without becoming a country I do not want to become. The idea of America is more powerful than the reality. I think our goal is to become a more perfect country and though we disagree on how to do that we can agree we should try. At the same time I do believe that as much as 30 second spots on TV can influence us to buy so can 30 minutes of vitriol or 30 seconds of lasciviousness persuade us towards the worse behavior in each of us. Because we are the country we are, the idea of America is that we are a free people, free to disagree and free to be wrong. But let us also be a country that can recognize that wrong in order to become a more perfect union.

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Arizona Shootings Reaction
www.thedailyshow.com
Daily Show Full Episodes Political Humor & Satire Blog</a> The Daily Show on Facebook

It almost seems inappropriate to post some pictures in the same post, but I was in the middle of creating this blog and if I want anything to be true it is that crazy does not win.

We all went to a local carnival and even though it was raining we had some fun. Afterward we at kebab. Great night.

Jenny and Patrice are finally leaving. We got to have dinner with Jenny one last time.

French is Hard

I had an interesting day yesterday. First it was snowing still. It seems that everywhere we move the weather is not what it used to be. When we were in Iowa people there claimed that it was the most mild winter they had ever seen. When we moved to AZ somehow it rained more than they ever remembered. Now we are in France and funny thing it never snows this early. Second, I don’t know if the snow had anything to do with it, we lost our connection to the Internet for the entire day. Our Internet connection went down and I tried everything to get it back. I did not call tech support because I was afraid to do so. The missionaries came to dinner and I had them call and they told me that there was a recording saying that there was a general problem in the area. I went over to McDonald’s to try and use the Internet there, but theirs was down too. Now I cannot work without the Internet. I cannot email, I cannot call. If I were in the US I could call someone and tell them that I would be out the rest of the day. So I was a little worried, but decided to relax and not worry about something over which I had no control. So I skipped work. When I logged back into work today I found out there was a big meeting where big changes were announced at work. I don’t know if that took the focus off the fact that I was out, but it really seems to be a non-issue. I am so tired of the lameness of work.

Speaking French is hard. I know we are making progress. If we ever get to a point where we claim fluency I want to remember that it was hard. We heard that it would be easy for kids to pick up the language. It may be easier for them, but never easy. According to our French friends CK speaks like a French child (I speak like a Spaniard) so the fluency for children may be more apparent in the accent, but understanding and speaking are hard. The class we are in uses the European standard for evaluating proficiency. There are 6 levels. A1, A2, B1, B2, C1, C3. Our teaching told us it takes a year to pass A2, and then another year to pass just B1. Of course I want to turn this into a math problem (study x hours learn y number of words means z proficiency). We go to class 6 hours per week for a total of 80 hours. According to some you need 75 hours to pass A1 and 225 to pass A2. I asked Antoine if he could remember any missionary being mistaken for a native speaker. He said that there were none. He said the best they could do would be confused with someone from Belgium.

I want to write more on language acquisition as I am in the middle of it. All I can say is that Kim and I are trying to speak more at home and the kids don’t seem to mind, because they understand the utility of what we are doing. This is one advantage to being here. It focuses you more on the task. Of course Dakota will look us straight in the face and say, “I don’t understand French” Even after we say something she should know. We are not ready for a French film and good news Harry Potter will have two showings in VO (English) so we are going Saturday night. Yahoo!

Kids went out playing in the snow before school.

We decided to walk the kids to school. It was cold and slippery.

Later we went into town to check out the Christmas market. Overpriced and not very interesting. The only thing interesting was the way people (especially kids) dress. Dang they all make us feel like vagabonds. The French may spend way too much on clothes, but they do look fabulous. We just learned that there are government regulated sale days in Jan and July. We are going to have to catch those.

We caught a kebab later. Very popular here. From Turkey.

More

I am still trying to figure out how to get the videos off my work computer so that I can post them here. No luck so far. I wish I had not put them on there now. Although it has been over a week since our trip to Germany I haven’t posted a lot of pictures. I may have over done it here. One of the main events for going to Germany was to visit Neuschweinstein. The visit came on our last day. It did not disappoint. They do not let you take pictures inside the castle so I included a few shots from the outside.

Because I am cheap and I thought it would be better, we walked up to the castle. The visit actually is two castles. It cost 34 Euros for Kim and me. The kids were free. The first castle is where King Ludwig grew up and from where he could watch the building of his dream castle.

We went on guided tours of both castles. I don’t think there is another option. The inside is absolutely fabulous. He had it designed in the style of an old medieval castle even though it was built just a hundred years ago.

King Ludwig became King at the age of 18 when his father died in 1864. He died before this castle was finished and the castle was open to the public immediately afterward.

The castle is one of the most visited tourist spots in Europe. King Ludwig had fanciful ideas and the castle is built more like a real life stage set than a real castle.

A real medieval castle was built over hundreds of years and therefore buildings seemed built on buildings and styles seem to clash. King Ludwig created that look by design from the start. He spent almost all of his money and borrowed even more to finance the construction. He was being removed as King when he died under mysterious circumstances.

Although King Ludwig lived there for about 6 months the castle was never finished enough to accommodate the 200 guests it was supposed to. He never intended on letting the public roam about. Now more than a million people a year visit the castle.

Although built like a medieval castle its construction was very modern. The throne room used steel to support some of the structure. In this courtyard where we are taking pictures there was supposed to be a chapel, but of course was never realized.

Because of its remote location the castle was spared any damage from WWII. The Nazis kept a lot of plundered art in the castle and at one time had a stash of gold that was part of the mysterious Nazi Gold.

We were told not to take any pictures inside the castle. We were able to take this one picture from inside facing out towards the other castle.