Latest and Greatest Nemo’s News

Well, we have been extremely busy for the last week or two, even by our standards. Here’s the scoop:

1. Rental House
Our buyer was not able to get funding, so our original contract fell through. She was pre-qualified with a major national bank, but they cancelled the loan program she was qualified for several days before our closing. We went under contract at about $30,000 less than market value with the house ‘as-is.’ The intent is for someone else to complete the remodel projects and gain the equity for their efforts. She asked us to fix 14 things noted on the home inspection, even though it was an ‘as-is’ deal. Wanting this sell to go through, I spent approx $1000 to complete some minor electrical repairs, minor plumbing repairs, had the furnace cleaned/inspected/serviced, replaced the back porch steps, etc. Her failure to secure a loan caused me to also have to make another mortgage payment, another month of utilities, another month of homeowner’s insurance and property taxes, etc. Overall, she cost us an extra $2200 or so… I felt that her earnest money should go to pay for the repairs she requested on an ‘as-is’ transaction, and towards the monthly payments. Our realtor disagreed and gave it back to her.
Well, the house went back on the market officially the next morning (Tuesday April 1). We had four showings that day and went under contract again that night. We are currently scheduled to close on April 18. The new buyers are (legal) immigrants from Panama and are in a state assisted first time home buyer program. They get $10,000 from the state towards a home purchase, but the house has to meet specific inspection criteria in order to qualify. Several of the remodel projects in progress violate the terms of the program. The buyers asked us to finish those projects, and we said no. The house is offered at a discount so that they can do the work. We gave them a key and they have spent the last week scraping and painting the gutters and outside trim, painting the garage door, installing the kitchen cabinet doors and new hardware, painting some upstairs rooms, etc, etc. They are willing to put the efforts into the house in order to qualify for their program. If it all falls through, then a few items on the overall list got done and are finished.
I put a huge dent in moving equipment, tools, and materials from the wood shop up to our house. I still have a huge amount of work to do, and only this weekend to finish it. Wish me luck!

2. What do you do when you get sick?
Tracy was sick last week and had to go to the doctor. She stayed home in bed on Thursday and Friday. She has been at the shop six days a week for 49 weeks straight, without missing a single day. She typically works from 4:30am until 3:00pm. She has put so much of herself into the shop, and that is really what drives our success. Tracy is a stickler for product quality and in the end, that is what keeps people coming back. We realized very quickly that her not being there is a huge challenge with regard to staffing and with how much prep work she does in the morning from 4:30 to 6:00am. Tracy’s mom worked some shifts, and I worked from 4:00 until 10:00am on Thursday and from 4:00am until 8:00am on Friday (plus the Ft Carson day job until 5:00pm and the Intel water chemistry scope from 7:00pm to 3:00am). In all of the months I’ve been working Ft Carson and Intel, and helping with the shop and doing a little photography, I have never felt like it was too much to handle. I nearly fell asleep driving from Ft Carson to the kids’ school Friday afternoon, which is the first time I have felt sleepy when I shouldn’t through this whole process. We made it through, but it was difficult. I can’t even begin to say how much help Barb (Tracy’s mom) has been. We also had our employees coming in earlier than normal and even called Angie (our neighbor and ex-employee) to come and help. We made it through this rough time, and Tracy is feeling much better. Sometimes someone has to be missing before you truly grasp how much they do. We didn’t have the same proficiency that Tracy has, and we made do for the short term. Filling Tracy’s shoes is a very difficult task!

3. Sales Performance
Sales bounced back from Spring Break week to just at the break even threshold. We are so very close to going profitable, I can almost taste it! Two years of planning, construction, and start-up, and we are right on the edge of being rewarded (not very much, but that will grow over time). It is exciting to be at such an important milestone. I just hope the trend continues. With all of the doom and gloom economy news, it is a scary time to be teetering between success and failure!

Our merchandising refrigerator quit working sometime Friday night. Tracy got there Saturday morning and it was maintaining a nice, crisp temperature of 81F! That is hotter than the room was at 70F. Apparently, it switched from a merchandising cooler to a merchandising heater overnight. We bought it brand new and paid more for a ‘better’ brand. The thing cost $2700 and I expect something like that to work for decades! It is under warranty and they have it fixed, but why doesn’t anything ever work anymore? Why do we pay thousands of dollars for things that don’t work? If you are going to open a shop, I would suggest buying used equipment. We have a mix of new and used. Here are the differences:

1. Used equipment costs pennies on the dollar, but does not have that new, shiny look. It might even have a dent or a few scratches. New equipment costs full price, loses that new, shiny look in a few months, and winds up with a dent or a scratch in a few weeks.
2. Used equipment sometimes requires service, and it might cost $150 or so. New equipment also needs to be serviced, but if you are lucky, it will still be under warranty. You still paid for the service by paying full price for the equipment, if you want to look at it that way.
3. If you buy new equipment, it is only new for a short time. After a few months, it is actually classified as used, and is subject to failure just as much as the used stuff.
4. Did I mention that used equipment costs pennies on the dollar?
5. Used equipment costs less, and gets delivered and installed by the local restaurant equipment supply house that you dealt with. Finding a screaming deal on the internet (www.bigtray.com) might save your $600, but you have to figure out how to uncrate and move an 800 pound item into your store. The bumper sticker “Yes I have a truck, and no I’m not helping you move” comes to mind. Besides, my truck does not fit inside my store.
6. If you open a used refrigerator or freezer at the restaurant equipment supply house, you will notice that it smells funny. If you open the door on a brand new piece of equipment, you will notice that it smells like industrial adhesives and chemical plastic. If you open the new equipment three months later (technically used now), you will notice that it smells like the equipment in the used section of the restaurant equipment supply house. You will also notice that neither of them smells funny at 35F. They really need to be turned off and warm to smell funny.
7. Used equipment sometimes has stickers on it, or worse, left over sticker adhesive. New equipment looks good until your kids put stickers all over it.
8. Did I mention that used equipment costs pennies on the dollar, and someone in a blue shirt that says “Joe” or “Dave” on the front will do all of the heavy lifting??
9. Used sink faucets tend to leak a little. New faucets tend to work perfect for a few months before they start leaking. After they start leaking, they are just like a used faucet, except you paid double or triple the price for it!
10. All equipment requires maintenance, and that is where you save money in the long run. New equipment might run longer before failing if you don’t do any maintenance. So what? When it finally fails, and impacts your business, and costs $300 to fix, it is the same as used equipment.
11. If you can’t tell, I am recommending that you purchase used equipment. But, do your research, know what you are buying and how it rates for reliability and longevity, and try to negotiate a warranty instead of buying it as is. You should be able to get 30 days without any problems. 90 or 180 days is harder, but not impossible.
12. Make friends with the local restaurant supply house folks. You will absolutely need their help at some point. If you were a jerk to them during the purchase or move it, they will probably remember (I never had that experience; I was nice to them).
13. Do not accept “free” equipment from one of your product vendors, in exchange for using their products. You will probably get a poorly maintained, used piece of equipment, and you will be stuck using their product, even if you end up not liking it (the product and/or the equipment). Product quality depends on the product and the equipment used to prepare/serve it. Don’t compromise either of those things in order to “get a deal.”

We have live music Friday night at the shop! It is a local folk/bluegrass band called Heirloom. Sorry, no photos to post. I’ll try and take some photos Friday night while they are there…

Gotta run.
JD