Most times its the things you learn when you’re down that stick.
Having begun in business in 1985, I built a larger, viable commercial painting company that grew from nothing to 60 employees and $3 million in sales. We had systems, procedures, a good grasp on the market, and even bought land and constructed a 10,000sf office/warehouse.
Then the market tanked and T. L. Hart, Inc. was left holding the bag of considerable debt, declining sales, and a building that lost half its value. In 2010 the bank called all our loans, including our mortgage on the property.
The good news is, we survived the storm, averted bankruptcy, and came out the better for it. On top of that, I came away with some valuable lessons. Here is a summary of what I learned during tough times.
1) Your business model must fit the locality in which it is located. My son John, an investment banker, told me this many years ago—but I didn’t listen to him. My business model would have worked well in a large metropolitan area, like Chicago or Atlanta, but not Lansing, Michigan.
2) You have to have the ability to adapt to an ever-changing marketplace. The bigger the ship the longer it takes to turn it around. I had accumulated so much overhead that when sales dropped by 2/3’s, I couldn’t unload it fast enough. Times change, and you’ve got to be ready for change whenever it occurs.
3) Use credit wisely and pay your debts quickly. It is hard to avoid using credit in today’s world, but the mistake I made was to rely on it. Not only did I fork out tens of thousands of dollars in interest over the years, but when things got bad economically, I had a difficult time making payments. Currently, we have virtually no debt and pay cash for everything—and it feels great!
4) Choose your employees carefully. I look back over my 29 years with T. L. Hart and wonder how I hired some of the people I did. I once heard a reputable contractor say, “Your only as good as the people you work for.” It is equally true that you’re only as good as the people who work for you.
5) Pray and believe God for good things. This really should have been first, but it certainly proved valuable when going through the loss of everything I worked hard to earn. In fact, it was faith and prayer that got us through, and not just by the skin of our teeth, but victoriously!
6) Don’t give up. When our banking official advised me to file bankruptcy—and file it fast, I told him I didn’t believe in bankruptcy. Had I quit I would have owed the bank and others close to a million dollars. As it turned out, I not only didn’t file bankruptcy, 2010 was among the best years T. L. Hart ever had!
7) Always make a profit. My mentor, the late Jim Russell, used to tell me this all the time. I would always respond (in my heart—I didn’t say this to him!), “Yeah, but. . .” Well, he was right. You have to make a profit every single month, even if it is a dollar!
8) Be aware that seasonal aspects and fluctuations in the market can affect your business. I struggled with the ups and downs of business cycles for decades. Finally, I faced the reality that ski resorts and golf courses face: you make your money when you can, when the weather allows. There are seasonal cycles, construction cycles, economic cycles; you’ve just got to come to grips with it. And. . . make sure your business model compensates for it.
9) Don’t throw the baby out with the bathwater. This was a hard lesson! I made the mistake of casting aside even the good things we had going for us during our fight for survival. Now, four years into a great recovery, I’ve still not put back into place many policies and procedures that helped grow T. L. Hart to begin with.
There are likely more, but these are the things that stand out to me as being the most significant. I am grateful that God not only led us through and of out of those difficult 7 years, but He taught me some valuable principles in the process.