Boss Life Page 32

  $13.50/hr: A worker on the training path will get a raise to this level as a reward for reliability, hard work, and increasing skills.

  $15/hr: Starting wage for someone fresh out of woodworking school. Most training programs emphasize skills that are, in my shop, obsolete. We rarely work with hand tools and our equipment is much more sophisticated than that found in schools. These green workers will still need very significant training, and we’ll also need to determine whether they have “good hands” and a good work ethic.

  $18/hr: A worker who has had both schooling and some work experience, or whose skills and work ethic have been vouched for by their former boss. I still need to see whether this person can reach our required level of speed and accuracy, much higher than the industry average.

  $20/hr: A worker who has been with me long enough to learn our procedures and can do most tasks without error. I will keep a worker in this wage range until he can do a very wide range of items without a problem. This might take a while—some pieces only get built now and then. Also, at this level, a worker shouldn’t need constant attention from management.

  $25/hr: This person should have mastered every aspect of his job. He should be able to manage a helper and contribute ideas that improve our operations. This is also where I would start a worker with previous experience doing work very similar to ours.

  $30/hr: This is foreman pay, for complete mastery of both our particular skills and the wider demands of the trade. This worker should also be an energetic, innovative leader who can monitor all shop activity and provide direction to other workers. He/she will also drive innovation in our procedures and work closely with me and the office staff. In my experience, at this level, a person works a lot of overtime. I pay OT, instead of putting the foreman on salary, to reward that effort.

  —

  SO THAT’S MY WAGE SCALE. For the first ten dollars an hour, I get reliability; the second ten, a worker with skills adequate for our regular production; and the third ten, all the old-style hand skills. We’re custom makers, so we often need to do something that could be done by machine, but will require a large investment in programming and tooling. That’s when the master-level workers shine. They can jump in and do something tricky, quickly, and keep moving.

  Mike listens to all that and tells me that he might be able to bump three guys to thirteen dollars an hour after New Year’s. He won’t be paying a Christmas bonus. Maybe he’ll take his people to dinner, but that’s all he can afford.

  After Mike leaves, I consider whether my guys deserve Christmas bonuses. Will Krieger and Dave Violi have been putting in huge hours, but they’re getting overtime for that. As for the rest of the crew? Nobody else has come close to the hours that Dave and Will have put in, or put much effort into improving shop operations. Dan and Nick have not resisted the new sales methods, but they didn’t think them up, either. I know who really deserves one: me. I’m the one who, in response to the crisis of falling sales, tried everything I could think of to save us. I swallowed my pride and asked for help, and then looked at how I’ve run the company for a quarter century and realized that it wasn’t good enough. I made hard choices and lived with the consequences. And I’m the one who hasn’t had a paycheck since April.

  The next eleven working days, leading up to Christmas, are remarkable: nothing bad happens. Will Krieger keeps the shop running smoothly. There are no machine failures, no employee misbehavior, and we are beating our time estimates. Dan and Nick close six deals worth $98,388. We’re amassing cash: the remaining military payments arrive, and we get money from new customers and completed projects. Two new buyers pay their entire bill up front to get the cash off their books before the year ends. From the beginning of the month to Christmas Eve, we take in $233,170 and spend $150,897. The net gain, $82,273, takes me past my starting balance at the beginning of the year. By Monday the twenty-fourth, I’ve got $147,111 in the bank.

  Monday, Christmas Eve. Twelve of the fifteen employees have shown up to work. At the meeting, I tell them that our annual sales will be very close to last year’s totals. We finished 2011 with $2,138,572 in new orders, and as of today, we stand at $2,066,064. I expect a few more jobs in the last days of the year, as bosses with extra cash rush to spend some of it and reduce their tax load.

  Ron Dedrick raises his hand: “How about our bonus? We have money, and sales are back where they were last year. And you gave us a big bonus then. Are you going to do it again?”

  It’s the question I’ve been dreading. I swallow and deliver my answer: “Maybe. I’m not comfortable with our cash cushion. We’re positive, but we’ve been negative most of the year. Bonuses are expensive. Do you remember what you got last year?” I had been very generous, giving the lowest-paid workers fifteen hundred dollars, and the higher-paid guys four thousand dollars each.

  “You guys got a nice surprise. Well, that added up to forty-eight thousand dollars, not including payroll taxes. But we also had a lot more cash, so I could afford it. A year ago, I had $280,000 in the bank. Today I have half that.” Stony looks from the crowd. “I’ll tell you what. Next Monday, New Year’s Eve, is the last payday of the year. I’ll make a decision then, based on our cash position. But I’ll tell you right now, it won’t be anything like last year. I just don’t have the money.” Unhappy looks all around, which I find a little bit disgusting. All year, I’ve paid them on time and in full, even when it was a struggle. I resent the implication that they are entitled to a bonus after such a bad year. I’m tempted to point to the donuts and say, “There’s your bonus, gentlemen,” but I restrain myself. Instead, I end the meeting and walk back to my office.

  I’m back in at nine a.m. on the day after Christmas. In 2013, I’d like a lot more data on our customers. I decide to start tracking both our inquiries and sales by client type. Not what kind of company they work for, but whether they are a big boss, the assistant to the boss, a corporate buyer, or one of the dozen other categories that I identify and add to FileMaker. I suspect that the types we call “low-level assistant” never lead to a sale. I can’t prove it, but next year I’ll know for sure.

  On Thursday, we get a call. Surprise, surprise, it’s the CEO of Brand Advantage, Mark Jones. They still owe me $7,448. Is he going to pay?

  “Paul, I’d love to pay you. But I don’t think it’s gonna happen. We’re shutting down after the New Year. I’m sorry it turned out this way. I just wanted to call you, not leave you hanging.”

  I give him half-hearted thanks for his consideration. He takes this as his cue to explain how Brand Advantage flamed out. He’d been in advertising for years and became a specialist in promoting brands at sporting events. Then he headed out on his own, figuring he’d be getting the big bucks. He opened his doors in April and persuaded some clients to sponsor a series of events in the fall. We walked into the middle of an unending disaster. None of his clients renewed their contracts, and some haven’t paid him. He’s going to shut down and go back to being an employee.

  I make sympathetic noises, wish him luck, and hang up. Maybe he’s lying to get out of paying me what he owes. Maybe he was never cut out to be a boss. Or maybe he’s just unlucky. Like Mike Vogel, his business model required a lot of things to go right from the beginning.

  —

  ON FRIDAY, Will and I have our last meeting of the year. We share chuckles over incidents that weren’t so funny at the time; then I ask if he has any New Year’s resolutions. He does:

  “I want to move us to something more like a production line. When we have everyone building their own tables, it’s a mess. A bunch of guys always end up needing one of the machines at the same time, and everything is out of adjustment. And the guys are walking all over the shop all day. It’s a huge waste. I want to get all that under control.”

  I think about this for a minute and then point out that the older guys aren’t going to like it much. They’ve got Heroic Solitary Craftsman ba
ked into them at this point. I don’t know whether they’ll tolerate that kind of change. We agree to give it a try and see how it works out. But not until next year.

  —

  MONDAY, DECEMBER 31. Everyone’s here on New Year’s Eve, I presume to hear my decision about bonuses. I give them the numbers. Dan sold two jobs last week worth $35,749. That brings our total for December to $184,333, and our total for the year to $2,102,261. We also picked up more cash last week—we’ve had positive cash flow for the entire month. My bank balance stands at $217,427. Because of that, everyone will each see an extra five hundred dollars in their paychecks. This news prompts some smiles, but everyone remembers the much larger bonus they got last year. Too bad. There won’t be any bonus for me. I want plenty of cash on hand for 2013.

  Before I go, I shake their hands, thanking them for their work during the year. I’m especially grateful for Dave Violi, who put in 360 hours of overtime, and Will Krieger, who rose to my challenge and did a superb job. I’m delighted to thank Andy Stahl, who kept pace with the shop, and to congratulate Dan and Nick for beating their 2011 sales totals. I thank Emma for all her help with my Middle East trip and for keeping the office running smoothly. I thank Bob Foote for keeping the work moving out the door and managing the helpers. I thank Ron Dedrick for his good craftsmanship and cheerful attitude; Sean Slovinski, Tyler Powell, and Kristian Scheld for working hard and doing a nice job. And I steel myself and walk over to the corner of the shop where Steve Maturin is smoking a cigarette. “Thanks, Steve. I appreciate your hard work.” He shakes my hand, but, as usual, says nothing. Just a nod.

  On the way home I think about the problems I’ve left unsolved. Steve Maturin is gloomy all the time now, even though his work is still impeccable. Dan is doing better as a result of Bob Waks’s training, but he’s still not consistently hitting my targets. He ended up with $647,056 this year. Nick sold $1,034,273. I ended up with $420,932. I’m not sure how I’ll be able to retire from sales and get to $2,400,000 next year without a different salesman.

  I haven’t heard anything from Dubai since I sent the last proposal in September, but we shipped Eurofurn’s November order and we’ve been paid. I think Will’s vision for more specialization on the shop floor and a streamlined production process has much more potential than any adventures on foreign shores. If we can keep the shop busy with orders, anyway.

  I’ll start 2013 with $178,948 on hand. I’m up $41,794 from the beginning of 2012. When I come back to the office on Wednesday, I’ll reset all the sales and production numbers to zero, start my twenty-seventh year, and see what happens.

  Postscript

  FEBRUARY 2015

  As I write these words, I’m starting my twenty-ninth year as a boss. They were all challenging and kept me very busy. And except for 2012, they lacked a narrative arc. So what do my very eventful year and the other years have in common? This: I never knew what the next day would bring. I still don’t. That’s what I was trying to get across in this book: the unpredictable nature of running a small company. The way that ordinary duties interact with randomly occurring events, and the way big decisions need to be made with incomplete information. More than anything else, I’ve had to be flexible and ready to respond to any challenge. And that’s been fascinating. I suppose if my business had become successful and had grown to the point where I could hire people to do all the day-to-day stuff, I might grow bored. I’m not there yet. I still go into the office every day, say hello to Nick and Dan (who are doing very well), and walk around the shop floor to see what’s happening. And that’s a great gift. Despite vast economic forces arrayed against us, my little workshop is still alive, still putting out high-quality work for happy clients.

  I swore in the Introduction that I wouldn’t be giving you any lessons. Now you know why. I’m sure that many of you, more experienced in financial, managerial, or legal matters, were appalled at the errors I made. Fair enough. There’s only one thing that I know will work for everyone. Get help. Find someone who knows you, knows your business, and who is willing to consult with you frequently. It’s preferable to have more than one mentor, just in case your preferred source of advice is wrong. Running a business can be a very lonely experience. I assure you, nobody’s troubles are unique. And fellow business owners are happy to share what they know.

  In my years writing for The New York Times, I exchanged e-mails with hundreds of readers. It was fascinating, and I’ve missed that exchange of ideas. If you think my advice can be useful, please write to me at paul.c.downs@gmail.com. I’ll do my best to help.

  One last thing: thank you for reading my story.

  ACKNOWLEDGMENTS

  In December 2009, I came to the conclusion that my business was about to fail. I turned to the Internet to see if I could prepare for the experience of closing my doors, and found no useful information. I wrote to Loren Feldman, then an editor at The New York Times, and offered to document my experience. His invitation to write for the Times started my second career as a writer. I’d like to thank him for his guidance, support, and friendship.

  This book would not exist without encouragement from Paul Lucas, my agent. In September 2012, he asked me whether I had ever considered writing a book. Not really, I replied, but I would be happy to give it a shot. I don’t think he was picturing the story you just read, but he patiently helped me complete my first draft, and has been my champion in the publishing world.

  My business would never have survived its early years without the unflagging support of my father, Anthony Downs, and my brother, Tony Downs.

  And I’d like to conclude with thanks to my wife, Nancy Bea Miller, and my children, Hugh, Henry, and Peter. Even when I exposed our private lives and finances to the world, they have stood with me.

  ABOUT THE AUTHOR

  Paul Downs founded his business in 1986, fresh out of college. He’s been at it ever since, and has no plans to shift gears.

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