When I left at 10:30 am Geoff was still sleeping. Alice went to get her hair done so we left the keys to Alice's car for him so he could get out of the house and drive around. We gave him the GPS and it had home pre-programmed so if he got lost he would find his way back to our place. I told him I told the yearbook guys I'm in with then but am truthfully undecided. This meeting with Wayne was critical, I needed to get a read on whether or not he's committed to fund losses and for how long before getting out of the book business.
On the drive to work I was speaking with Al and we were discussing the Yearbook versus AG opportunity. I was filling him in on some of the compensation numbers based on the budget I prepared and they were in the $450,000 range if I hit my budget next year. On the low end it will be around $350,000.
My meeting didn't start until around noon with Wayne. He's often late for meetings. It's becoming standard fare. It worked out okay as Chris, Andrea and I had a meeting to discuss the demo of the software we saw yesterday. It looked really good from the admin side, according to them. I didn't look at it, I was busy budgeting during the demo.
Wayne arrived and he sat down with me in my office before the meeting. When I look in his eyes and body language he really likes, values and seems to trust me. He's very welcoming when he sees me. We talked briefly and I mentioned I have a guy from Winnipeg in and I'm talking to him about printing and potential with AG and was hoping we could finish by 2 pm. All bullshit. I just want to get out and hang out with Geoff. He was cool with it and wasn't thinking the meeting was going to go on too long.
In the meeting was me, Chris and Wayne. The first thing I did was pull out my projections and we started the discussions. Wayne explained to Chris and I that they had looked at the financials and the operation has lost approximately $400,000 in the last 10 months not counting the 5% Royalty they need to pay to Embassy as part of the purchase agreement.
Chris brought up that he doesn't think we are getting enough money for what we do. That was his primary position. My position is that we don't know that to be certain and at a current volumes we are losing money and if we double sales will be still be losing or will it be enough to cover all the overheads and be profitable, or at what sales level will the operation become profitable or can it ever be and before I agree with anything on pricing being too high or too low I want to see the financial picture based on my sales projections with Chris making the production & staffing requirements. Wayne's position was questioning Chris about whether we are being most efficient and is there areas that we can cut costs. Wayne did it in a very positive way and the more I deal with him the more impressed I am and think he's very smart and I really like his style. He's a real gentleman and very stable. He can talk about sensitive subjects and keep it positive.
It was a very productive meeting. Everything got put on the table and most of it was Wayne asking questions of Chris. The next result was having Chris put together what costs he thinks he would have to produce the level of work that I"m projecting and from that we'll be able to find out if the operation can be profitable. Chris kept coming back to that we need to charge more and I said that I don't want to shoot myself in the foot to fight the battle of getting a price increase without knowing that the 10% will not make us profitable at low volume and at higher volumes may not be necessary if it shows we can become very profitable. I don't want to shoot myself in the foot and lose a client if I put the gun to the head without knowing if it makes sense.
In the end, Chris understood my position and so did Wayne and most importantly Wayne agreed. I was most impressed that Wayne continued to discuss how we could cut costs. He reminded me of my old partner Abe Simkin, a very successful businessman. They both know that you can't control sales per see but you can control expenses immediately. We also found out that we may now be able to get an extension from our landlord so we don't have to move for 12 - 18 months. I feel more comfortable about that because by first to second quarter of next year we will have a really accurate assessment of whether or not the business is going to hit the numbers and whether our clients are going to grow to their projections.
Unfortunately I'm no wiser after that meeting as to what direction Wayne is leaning other than at this time he's still committed. In terms of raising money for the Yearbook division I don't think I can do it in Toronto. Ari, a partner in AG is a very well known Venture Capitalist in Ontario. His family is dripping with money. I went online and saw that Ari's house is for sale for $5.4 million. He's a good guy and we went for a ride together last year and I like him. I'm so concerned that if I float my proposal out to guys in Toronto it may get back to him and then that may jeopardize my employment with AG. There is a part of me that wants to bring the opportunity to Wayne and perhaps him and Ari would be interested in investing in it. I'm not sure how I would do that or what the potential negative fall out could be.
My brother got back to me today on the proposal and had some really good input. I could see him being highly successful as a business broker. He thought the business plan was excellent and had some ideas for structuring it. I spoke to him on the phone and had him on speaker phone when Alice was in the car listening too and I thought I was speaking to one hell of a great business broker / consultant. It blew me away. I could see him making a lot of money in the brokering business. I told my brother I'm going to set up a conference call with Tom and myself early next week for him to get answers to questions I couldn't answer and perhaps help us come up with a better structure.
I got home from the meeting just after 2 pm and Geoff, Alice and I headed over to Jamie's to help him build his Foosball table. We got there and we woke him from his slumber and then helped him move the box from the garage and build it. It was actually fun, some good laughs as none of us can build shit. Afterwards we sat in the backyard shooting the shit and having beers. Jamie and Barbs backyard is so nice and relaxing to sit in. It was also confirmed today that the House of Payne Beer Run is going on the road this year and will be head at Jamie's place. It seems that every second year it's going on the road. The last road trip was at John Barclay's house.
We left Jamie's and we all headed over to the Tin Cup for dinner. It was an awesome day, whether great and their nothing better than Tin Cup's grilled calamari and sitting outside on the patio eating and drinking beer. The timing was perfect, after Alice and I drove Geoff to the airport to catch his flight.
On the way Geoff was saying that he thought the fun time at the Pig & Whistle 6 years ago was an anomaly. Now he realizes that we live that life all the time, he loved it and said that he's going to start coming back her to visit 3 or 4 times a year. He said he used to visit his parents in Vancouver before they passed away and liked the break. Now he's thinking of coming here. He was laughing because the whole trip on points and a cab ride was under $150. He said he spends that going out for a night in Winnipeg. I told him we'd love to have him visit regularly. He's like a brother, easy to be around, it's no work or effort. He also LOVES the kegerator and says he's getting one when he gets home. I know the feeling that's how I felt after the first time I tried Jamie's Kegerator.
After dropping Geoff off, Alice and I sat around in the backyard and then moved into the Pig & Whistle. It was another late night and I'm so sick of snacking on Munchies. For the past few days that's all that's been around the Pig & Whistle as we drink beer. I'm also looking forward to seeing how my legs feel during tomorrows training. I also need to tighten up my diet with more nutrition and no cigars from now until IMLP is over which is next Sunday.
On the family front, we got our birth certificates and marriage license. Now I'm just waiting for my parents stuff and we'll be apply for our Italian citizenship. I also found out that Alyssa and Reid are going to Winnipeg to see my parents and my mom has rented a cottage at the Lake. They are going Aug 3rd for 11 days. It' is going to be very weird without them at home. Just Alice and I, I can't remember the last time just the two of us didn't have the kids around. It's already quiet with Reid away this week, with Alyssa gone it will even be quieter. I was thinking Alice and should take off somewhere for a few days. Maybe Vegas???
No Training.
2 comments:
Great post. Loved Geoff's comments on the P&W.
Oh man, I hope Jamie realizes the debauchery that will ensue ;)
Will the beer bong make the road trip to Jamie's as well?
M, thanks. Beer bong will be post Jamies.
B
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