Do What Your Conscience Can Handle

I have not had many good experiences with contractors.  My first contractor experience came when I owned a house in the DC area.  An unexpected opportunity for a contract job developed while I was working an exercise in Korea as an Army Reservist.  The contract job required I be back in Korea ten days after returning to the States from the exercise.  I had ten days to get packed up, figure out what I would do with the house, and get back to Korea to start working.   I decided to put the house on the market to sell.  I knew a contractor from the gym who said he would be able to do the work needed to put the house on the market.  I wrote the guy a check for $5,300.  A couple days later I was on a plane going back to Korea.

The guy told me it was a simple job and would only take a week to put in new flooring on the main level and bathrooms.  A month passed and the guy never even started.  I asked him to refund my money so I could find someone else to do the work.  Instead of refunding my money, he ripped up the existing floors.  Two more months past and he did maybe $3,000 worth of work.  I was paying the mortgage and needed to get the house on the market to sell. I ended up paying another contractor to finish the job.  

I was in Korea during this entire process.  I contacted two lawyers and both told me their fees would be higher than any money I would be awarded and good luck actually getting any money from the guy.  The guy did about two-thirds of the job I hired him for.  I ate two mortgage payments due to the delays.  He never felt any need to refund any of my money.  Do what your conscience can handle.

I bought a house when I arrived in Colorado.  I wanted a garage built and found a contractor for the build.  A large reason I went with this contractor was because he said the garage would be finished by Thanksgiving.  I hired him the end of October.  It took them a month to demo the existing one car garage but he told me the job would be done by Christmas.  I didn’t have a garage until March.  The garage was well built.  I just don’t get why it took over four months.  I felt like I was in the Money Pit with the contractor telling me, “Two Weeks.”  Maybe I could have fired him and hired someone else but figured this would just result in more money and even more delays.  I was in a bad situation and the contractor knew it.  Do what your conscience can handle.

After about a three week delay getting engineer drawings, I have been trying to find a contractor for the build.  The first contractor walked through the space the week of 09 MAY.  Despite a reminder email, I never heard back from them.  I had two more contractors walk through the space on 17 MAY.  I also never heard back from one of them.  The other submitted a bid for over $200,000.  All the equipment and furniture are being paid for separately as well as the shelving, benches, and finishes.  $200,000 only covered putting in electrical, plumbing, mechanical, building the bar, and installing the other finishes that I already paid.  The space is 1000 sqft.  There is nothing structural being done.  The floor needs to be saw cut for plumbing.  We are putting in a panel and running exposed conduit for electrical.  I am amazed that this company is charging $200/sqft. 

I briefly looked into building a house.  I was told figure around $120/sqft based on what fixtures are going in the kitchen and bathrooms.  $120/sqft included a foundation and stick construction.  Again, I am amazed that this company is charging $200/sqft.  Are the guys swinging hammers and doing the work getting paid more?  Is the money going right to the company executives?  This is Ayn Rand capitalism - my only goal is to make as much money as possible.  Do what your conscience can handle.

Right now I’m looking into finding a GC to just pull permits.  I figure I will have much more control over the process if I am the one hiring the subs.  I don’t want to rip anybody off and take money off someone’s table.  I want to pay a fair price for honest work.  So far I have just been shocked by what people’s conscience can handle. 

Music for the Cafe?

I’m trying to decide what type of music to play in the cafe.  I think that time of day will also change the type of music.  Hopefully I’ll just hire someone with musical taste and default to them :) 

But until then … my ideas are below:

I think Tool could be good in the morning.

or maybe Nirvana unplugged could work.

I am thinking something like old Bob Dylan

or Neil Young later in the day

Would something like Beats Antique

or Mimosa work?  

I’m really open to the music as long as there is no profanity.  

Progress

Last Friday drawings were submitted to the building department.  There were some changes and the engineer is updating the mechanical, electrical, and plumbing (MEP) drawings.  Fortunately my architect has been able to walk the drawings through so it looks like we should have the permit by 01 JUN 16.  I have been meeting with contractors and should have bids coming in next week.  Build out starting in early June is realistic.  I’m still hopeful to be opened the end of June but with health department inspections, mid July may be more realistic.  We are getting there!!

I’m super happy with all the work Echo Architecture has done with the design.  I can’t wait to see the space developed.  The following pictures are what the space will look like.  The last picture in the series is our planned furniture.  

The window has an awesome view of Pikes Peak.  

And the green mound in the corner will be our simulated grassy knoll.  Galvanize in San Fran did something similar.  I think our knoll and swing chairs are going to be my favorite seats. 

The next pictures are of the bar area and bench seating on the opposite wall.

Below are our furniture selections.  I thought about getting all cork stools for the bar but am concerned about the cork staining … and customers carving their initials in them :)  But the chair looks so cool I had to get one and plan to put it behind the cash register.  

I also saw this.  I’m not sure if it will go in the cafe.  However I will have room for it at home.  How cool?!

Fear

I think everyone who starts a business has fear.  The probability of success is stacked against.  There are so many variables outside of one’s control.  I figure questioning the decision to go into business is pretty common.  I’d also be willing to bet, starting a business was not their first choice.  Investing your life savings into something with a low probability of success is not a rational decision. 

My first choice after the Army was to get a job with a private company that was doing something I believed in.  I thought Tesla Motors would be an amazing place to work.  I believe in Elon Musk and the passion he brings to the company.  A Model S with ludicrous speed is going to be my first major purchase once I start making money again!  My second choice was to get a government or contract job.  Neither of these choices came through - I have not been offered a job.

I could keep applying for jobs with the hope of getting hired.  I could do the retired thing and hang out the rest of my life.  Neither one of these options feels right.  Don’t start a business unless you can't think of anything else to do, or is it, don’t start a business unless you have nothing else to do?  I might be at the latter but I can’t see hanging out for the rest of my life or gambling my future on getting hired.  Lack of options is getting me over the hurdle of fear.  However fear is still there.  Some days of questioning and self doubt have been worse than others.  

My year in Iraq has so far been the worst time of my life.  I did get many lessons from that year.  I learned I am capable of working really long and hard hours.  Mostly, that year keeps everything in perspective.  Whenever I feel like I’m in bad place, I still always go back to that year and think of the last time I cried.  

My eyes have teared up several times since, but the last time I actually cried was 2009 soon after arriving in Iraq.  Nothing was going right.  We weren’t sleeping.  We were working ridiculous hours.  The food was making everyone sick.  I reached a break point.  I remember I went to the attic of the building where there would be no one around.  I put my head against a wall and started balling, full sobs, for I don’t know how long.  Every time since I have felt my eyes start to tear, I think back to that experience and stop.  I am not going to allow anything to be worse than that time of my life.  I was so miserable during that year, I think my heart actually stopped pumping blood.  

I’m sure what ever obstacles that come forth from the business will not be comparable to Iraq or other less enjoyable experiences I have already been through.  I have become proud of my ability to control what I am able to control and to keep trying towards objectives outside of my control.  This gives me confidence that I will figure out how to create a successful business.  Unfortunately I have also failed a lot and do have concern that one day I’ll lose the motivation and curiosity to keep trying.  What I know of the life of my grandmother’s one brother haunts the back of my thoughts.  

I have never felt like I have had much in common with my family.  My father was a physicist for the government and worked in the same office for over 35 years.  My other two grandfathers also retired from the government.  I don’t know much about my grandmother’s one brother.  He was almost never talked about.  

My grandmother had two other brothers.  One brother became a veterinarian.  Another brother owned a bakery and an egg farm.  They both did very well for themselves and had successful families.   

From hearing bits and pieces over the years, her third brother joined the Army to fight in WWII.  I’m pretty sure he fought in the European campaign.  I think he got out of the Army as a Captain.  He would have been my nearest relative to have gone to war.  My father received an educational deferment for Vietnam.  My one grandfather was drafted for WWII but remained Stateside.  My other grandfather was a biochemist who was conscripted to experiment with nerve gas.  

I’m not sure what happened to my grandmother’s third brother between returning from WWII and the end of his life.  At some point he became an alcoholic.  He was living in a shack on his one brother’s farm.  Sometime in his forties or fifties, he shot and killed himself.  I assume he came back from the war with PTSD as my grandmother hated the military and hated that I joined. 

What I don’t know is what happened to him between coming back from the war and becoming an alcoholic with no other options besides living in a shack on his brother’s farm, taking hand outs from family.  Did the transition from war to the shack happen immediately?  Did he first try to find a job or start a business?  Did he find a job or business that eventually failed because he was an alcoholic?  Did he become an alcoholic because he couldn’t find a job or because the business he started failed?  I’d like to know but there is no one left in my family to ask.  

What I do know of his life gives me fear that I may be going down the same path.  However, again, I have  become good at controlling things that I can control.  I don’t see myself turning into an alcoholic.  I don’t see myself committing suicide.  I see worse case scenario for starting the business as losing around $300K and then going back to school for a hard degree in something like computer science or accounting - something that is with in my scope to obtain and will guarantee a job.  Maybe I could even look into that med school in St. Kitts???  I also could see other opportunities I have never thought of arising as a result of starting the business.

I think starting a business might just be like the lead up to a fight.  Emotions and fears are spinning.  Once the fight starts, the fear goes away.  Jumping out of plane might be another analogy.  I have never felt fear after stepping out of a plane.  Leading up to the step out is a different story.  This is going to be a journey and I am looking forward to where this journey goes.  Worst case scenario is not that bad.  More so, I have a lot of confidence in that I have always been able to get back up by myself.  Hopefully this time I won’t need to get back up.  I’m trying to do everything I can to see this work and I really do want to have a positive impact on the world.  To the crazy ones :)

 

 

Looking To Do What Is Right

Several years ago I took a class on philosophy.  The professor asked the class, “If everyone acted this way, what would be the results?  Would the results be good for society or bad?”  He asked this question as a framework for determining right and wrong.  This question has stayed with me over the years and often times I try to step back and put myself on the “balcony” to look at the situation and determine what is right.  I have been accused of having a binary way of thinking, and I probably do because most situations, I believe there is a right and wrong.  

Recently I have been reading Buffett: The Making of an American Capitalist by Roger Lowenstein.  I recommend and have really enjoyed reading.  A repetitive theme in the book is how economical Buffet lived.  This is a lesson more Americans should heed.  I never understood profligate spending and see something inherently dishonest about living above one’s means.  Another repetitive theme in the book is on Buffet’s focus on profitability of a business.  Again, another lesson to remember.  A business that isn’t profitable will not remain in business.   

One of the chapters discusses Buffet’s acquisition of a newspaper in Buffalo, NY.  The other paper in town closes which results in a big win for Buffet.  The employees of the paper want a profit share.  The paragraph on this ends with, “The owners of the Buffalo Evening News had run very great risks.  Employees had not come forward during the dark years to share in the losses.   Nor, now, would they share in the gains” (Lowenstein 221).

I’m investing a significant portion of my life savings into the cafe.  I don’t really have a safety net if I fail.  I’m estimating that worse case scenario will be around a $300K loss.  I don’t see anyone being there to pick me up.  However, I do believe there is a high probability that starting the cafe will open doors to new opportunities.  I could just be out $300K when I start the new opportunity.

Best case scenario, we make an IPO or get acquired for a big buyout.  I can see the mentality behind the owners taking all the profit.  The owners are the ones taking all the risks while the employees are receiving a guaranteed paycheck.  This seems somewhat cynical.  

I want to find great employees that will grow the business and I want those employees to be rewarded.  The lesson I took from Atlas Shrugged is production needs to be rewarded.  I understand business does not succeed without the efforts of the employees.  I really hope that we will get to our best case scenario and I will reward the employees that made it possible.

Unfortunately it seems like too many people that make it turn into Scrooge McDuck and swim around in pool of gold coins.  My take away from Scrooge McDuck, he was by himself.  I don’t see honor in acquiring wealth from the backs of others.  More so, I don’t see how these actions are good for society.  

I like this below TED Talk.  I have concern over the wealth gap in America.  I am skeptical of how raising the minimum wage will affect.  The cynical side of me sees a further widening of the wealth gap and wealth being consolidated at the top as unemployment increases from: (1) large corporations automating and laying off employees, (2) mom and pops going out of business.  

Priorities

I knew the planets were not going to completely align with starting the business and there will be lots of arising problems and trade offs that will need to be made.  However, maybe I’m just feeling more cynical about things now.  I have had several recent disappointments.  One of the business related disappoints has come from not being able to find local vendors.  Some vendors I have contacted have been incredible.  Katrina from Vega, Tommy from Gnarly protein, Tyler from Equal Exchange, and Loren from Hammer Nutrition have all been awesome!  I have used their products for years and believe in the ethos of their companies.  Unfortunately I have had less luck finding local vendors for sourcing and larger vendors like Shamrock or US Foods have not responded to my requests.  

Right now sourcing chicken, eggs, or local honey is cheaper using Whole Foods retail prices.  This shouldn’t be this way.  I want to support local.  I want to put money into the local economy.  I need to maintain profit margins.  I can’t pay $.50 for an egg if I plan on selling eggs at $.50.  Maybe these local eggs are superior to the advertised free range eggs at Whole Foods.  I don’t know, but I do know, I can’t afford them.  

Finding a lawyer has been interesting.  First, I don’t understand the legal profession.  You have one set of lawyers that make everything so complicated, you need another set of lawyers to decipher.  This is great for job security, not sure how much value this adds to society.  The meeting I had with the first lawyer ended with a $600 estimate for a lease review.  I met with another lawyer.  I had more trust and confidence in this person and asked for them to proceed with the lease review.  The invoice for their work was considerably less than $600.  Was the quality of their work some degree less than $600?  I don't think so and hopefully they didn’t undercharge me.  They were the ones that gave me the price so I’m hoping it was a fair price.  I don’t want to take money away from anyone, but I can’t have anyone hook a vacuum up to my checking account.  

I know my website needs work and formatting.  Recently a local guy offered to assist.  I thought this was going to be great.  I figured it would be an hour or two of work to go through and change the aesthetics.  I was thinking around $50.  His price was $150.  I know nothing about web design and what a fair price would be.  I put some bids on eLance.  The bids on eLance came back for around $50.  Maybe this guy was going to do three times as good a job.  Maybe he was estimating the job to be more than one or two hours or maybe he values his time at $75 - $150/hour.  I don’t know, but I do know I can’t afford $150 for my website at this time.  

Soon I’ll be hiring contractors for the demo and build out.  I’m certain I’m going to run into the issues of wide price discrepancies that don’t necessarily correlate to quality.  It is almost instinctive to believe high price equals high quality.*  I’m not sure this is always the case as I believe some try to manipulate this instinct by charging more than a fair price.  I hope the people that are doing good quality work for lower prices are maintaining profitability because these are the business that I want to continue.  These are the businesses I want to find and support.  Again, I don't want to grind anyone on price and take money away from anyone, but I can’t have a vacuum hooked up to my checking account.  

These experiences have led me to reevaluate my priorities for the business and recognize trade offs will be needed.  I want to offer high quality products at reasonable prices.  I want to pay my employees well.  I want to put money into the local economy by local sourcing.  I think about that one rule of thumb for contracting - there is good, fast, and cheap.  You can only get two out of the three.  I have three priorities and right now it only looks like I will be able to support two.  

My priorities for the business are: (1) provide the customers with the highest quality product at a reasonable price, (2) take care of my employees and pay my employees well, (3) put money into the local economy by local sourcing.  Right now number three is going to be a distant third priority unless I can find other local vendors.  I really want to help out the other businesses in the community but I have to take care of my first two priorities first.  I will continue to reevaluate as I get actual numbers back from the business and determine profitability.   

Last point in this rambling stream of conscience, how much of a conscience do consumers actually have? Consumers want a high quality product at a reasonable price.  Does treatment of employees or community have bearing?  I just watched Steve Jobs: The Man in the Machine.  The movie went into some detail over the production factories in China.  The factory housing areas actually installed nets to catch people trying to commit suicide by jumping out of their quarters.  This doesn’t seem to weigh on consumer's conscience or at least it doesn’t seem to be a discriminator in choosing to buy Apple products.  I’m feeling guilty over not being able to buy from a local farm.  Hopefully I will never get to the point where I need to install suicide nets around my employee living quarters.  

*Robert Cialdini wrote about this principle in his book Influence.  I recommend reading.

15 Locations, 5 Years

I believe that you should always have goals.  I’m less sure if you should write down goals or tell others about your goals.  Watch this three minute Ted Talk if you adamantly believe in telling your goals to others.  From my experience, I tend to go about 50/50 on achieving my goals whether or not I talk about them.  

I first decided to take the MCAT in 2009.  I told many people.  I carried around MCAT prep books.  I finally sat for the test in April 2015 after I kept my mouth shut, signed up for the test, and took the test.  I found that by keeping this goal to myself, I was able to achieve this goal.  Unfortunately my scores allowed for the other ninety percent of the people that took the test.  Apparently the answer was not “C.” There was this one school in the Caribbean that was still interested but I did not pursue the opportunity.  

In my late twenties, I wrote myself a check for one million dollars.  I promised I would be able to cash that check by the time I was 35.  Even with the most generous valuation of the property I owned, I was well short of one million dollars when I turned 35, much less having a million dollars in my checking account.  Writing this now, I wonder what happened to that check?

When I went to grad school I set three goals for myself: (1) write my thesis on metrics, (2) start a gym, (3) find a good relationship.  I was able to write my thesis on metrics and graduate.  I started a gym and got the experience of owning my own business - with lots of lessons learned.  I found a relationship with a great woman.  We were together for three years until the Army sent me overseas for eight months followed by a year in Korea.  

When I was in command, I set another three goals: (1) every one that starts the rotation finishes the rotation, (2) improve the system of metrics, (3) renegotiate the housing contract for the headquarters element.  I was the first commander in over two years and one of only two out of six commanders that had no one thrown off mission for either gross incompetence or misconduct.  We continuously revised the system of metrics over the rotation to where we were getting closer to determining what effect we where having and why.  We moved past making red circles green.  Five years before I went forward, a housing contract was established in a not so good area, in not so good accommodations.  For five years, everyone complained about the living situation but every year the contract was renewed until I renegotiated.  I did have these goals written down.  I did tell others about these goals.  However I think it was my continuous thinking about these goals and taking action towards these goals that resulted in achieving them.  Meeting these three goals is one of my proudest moments.  

One of my goals for the business is to have 15 locations in five years.  My plan is to spend the first year with one location figuring out systems and processes to make a cafe profitable and replicable.  The second year we will open two additional locations and figure out the systems and process we need to be successful in multiple locations.  This is the year where we need to understand how supply and command and control will work outside of one cafe, in addition to determining what needs to be done for marketing multiple locations.  Year three is when we will begin setting the conditions for expansion and continue to refine the systems and processes for running multiple locations.  Years four and five will be when we get to 15 locations.  It’s one paragraph simple :)  

I'm starting to look for employees.  However, I don’t want to find employees but a core of individuals who will grow the company.  I really want to do something good.  I want to provide honorable employment.  I want to provide more nutritious food options.  I want to expand the business so we become a positive impact.

I want to get started and start working my idea.  Looking forward to moving into the future! 

Phase One Demo

We just began the first phase of demo.  The building is getting a sprinkler system.  The ceiling needed to be torn down to allow for the sprinkler install, and the ceiling needed to get torn down.  The elementary school acoustic panels were not giving the look I am after :)  Right now we have the ceiling torn down to the rafters.  I think we may be keeping the open rafters.  We are excited to see the design and begin buildout.

This week we met with Ryan and Courtney from Echo Architecture.  We love their vision and feel fortunate to be working with them.  We gave them wide parameters.  We suggested everything from polished concrete, to wood, to astro turf for the flooring.  We asked if there could be somewhere we could suspend a belay chair with climbing rope from the ceiling.  We want something simple.  We want something cool.  We want something different - Steve Jobs is a big inspiration for me :)

We are looking forward to getting the drawings, finishing demo, and getting the space prepped for buildout.  The health department will also begin their part with drawing review.  Placement of the hand washing sink is going to be paramount :)  

My neighbor and I did the demo of the ceiling.  I wanted to do it to save money but also get more connected to the business.  I think I’m going to want to look back and know that I was actively involved with the build out.  However, I will probably look to pay a crew for the rest of the demo.  I expect some block walls will be getting torn down.  Plumbing will be moved.  Electrical will be involved.  After almost bringing down the 30” HVAC vent - this made me think I probably should have paid the $700 for the building demo crew, but then I went back to thinking $700 was just way too much :) - I know I don’t have this skill set.  We are dealing with about 1000 square feet.  I’m currently looking to hire a demo crew.  I’m interested to see what cost estimates will be and trying to find a fair price.  I don’t want to take money away from anyone but I don’t want someone to hook a vacuum up to my bank account.  Like everything in life, I want what is fair.  

Moving forward!  Happy about moving forward!

In Business

“…I have looked in the mirror every morning and asked myself: ‘If today were the last day of my life, would I want to do what I’m about to do today?’  And whenever the answer has been, “no” for too many days in a row, I know I need to change something.” -Steve Jobs, Stanford Commencement Speech, 2005

I left the Army after about 15 years of active service.  There were many interesting experiences over the last several years and too many days in a row when my answer was “no.”  For the first time since I was 18, I have no commitments.  

How does the saying go, “Don’t start a business unless you can’t think of anything else to do?”  This is where I am.  

I just signed a five year lease for what I’m expecting to be our first location.  This is my first entrance into the retail food market.  I’m going to be entering a learning curve but am excited to see what we will do and what opportunities will present themselves along the way. 

I’d like to keep this blog going for memory of starting Red Point Smoothies.  Hopefully it will be interesting, even better if it provides value to others starting or looking to start a business.   Again, borrowing from Steve Jobs’ Stanford commencement speech, staying hungry, staying foolish, looking forward to where this journey takes me.