For the first time I've realized the benefit of having LA fitness only 4 minutes from my house. I went for a swim this morning when I wouldn't have been able to in the past. I was pressed for time and the short commute made it work.
The training plan is to taper and only do a swim today. The plan is to do nothing for the next two days and that's going to work well with an old buddy of mine, Geoff (Jeff), coming from Winnipeg to visit today and tomorrow.
It just so happens that I have meetings today and tomorrow. I'm actually a little busy or at least busier than I normally am. I was thinking that when Geoff came I wouldn't even go into work. Unfortunately I had no choice. Today I have an important webex demo on some photo book building software and tomorrow I have a meeting with Wayne to discuss strategy, focus, space and forecasts for the book division.
I managed to get swim done and get to work just in time for our demo. We all watched it from our office and truthfully I didn't even see one screen. I was there more for team player support, it was questions that were very technical on the admistration side of the software and not stuff that I cared about, so instead of watching, I prepared my sales forecast projections for tomorrow's meeting with Wayne.
The call lasted a couple hour and it was the perfect amount of time to do the projections. I finished right when the call ended and no one was the wiser.
Once the numbers were done, I started to figure out what my commissions would be. They were huge. It is possible that based on the numbers I could make $450,000 in 2012 if the customer projections are correct. When I saw that number I really started having second thoughts about starting a Yearbook Business. I'm back on the fence and now moving my legs from the yearbook side back to the photo book side.
Just as I was working on my commissions, Geoff showed up. He cabbed it from the airport to my office. Geoff is in the printing industry and owns a small $2.5 million dollar print shop in Winnipeg. He had emailed me a couple weeks ago saying that he wanted to come see me to discuss his business, he's not sure what direction he should take and wanted to get my input. When he first emailed I thought he wasn't really serious, just small talk, then the next week he sends me his itinerary.
I gave Geoff a tour of our plant and then we took off to my place. Geoff was laughing that he showed up with dress pants and a shirt and I'm in my shorts and flip flops. He was debating if he should wear jeans or not and went for the not. On the way to my place Geoff hinted that he was looking forward to not having too late of a night as he assumed I'm in training. Last time Geoff was here we finished at 4 am and he had a flight to catch the following morning and was drunk / hungover on the plane home.
When we got home I took him down to the Pig & Whistle and my most prized possession, the Kegerator. Geoff was here about 5 years ago and I didn't have it then. We had a pull and then we didn't stop pulling until 2 am. So much for his idea of me under strict training rules.
Geoff and I met when I was 19 years old and I just got into the business, he was 26 years old. I worked for Image Color and Geoff worked for Image Graphics. They were two separate businesses side by side in the same business park mall, we even had an inside door between the two businesses.
At one time Geoff's dad was a partner in both business and then sold Image Graphics to Geoff. Geoff was a customer of Image Color and I was in production helping with his orders and that's how we met. We then developed a best friend style relationship. I was doing Ironman's back then and we'd go swimming together, we did running relay races together and I can't even count how many movies we went to. Back then I didn't even drink. From 19 year old to 26 years old I didn't touch alcohol.
I posted some old photos, one is him sitting in the kitchen of our 600 sq ft one bedroom house, he was probably around 27 years old. I have a photo of the Cargil Relay race we were in. The photo has Geoff Middle), me (far left) and my brother Bob (second from right) and my first boss Dick Thomas (Far right). I also posted a photo of me and Geoff on his first trip here about 6 years ago when I was still fat and we were partying in the Pig & Whistle.
Geoff also got Alice into the printing business by hiring and training her to be a Lithographic stripper. Which was a very skilled and high paying job. This was before desktop publishing and Mac computers.
I wasn't happy at Image Color and Geoff and I had discussions of me leaving and coming to work with him and his partner as a partner and things never worked out. Instead I started my own business at 24 yrs old and that's were our relationship ended for a period of about 10 or more years. At that time because I started a business that was in competition with Geoff and Winnipeg business people having a very personal emotional attachment their business, it wasn't friendly competition, it was war. And now I was the enemy. Geoff let Alice go, she came to work for me and it was game on and our friendship all but ended. It was sad. In a bigger City like Toronto that would never have happened, it would have just been friendly competition.
Geoff is at a crossroads with his business. He has all sorts of issues. He knows he has to downsize and has many long term employees and the severance costs are huge. He doesn't know if he should buy new equipment and what would he buy and what markets would he go after and what does the future of print look like?
I think the trip was very worthwhile for him. I opened his eyes to some things that he could do that I did and he was unaware of doing. I told him that in the last year of my business our operation lost $400,000 and I was still about to sell the business for $2.7 million dollars and have the new purchasers assume all the employees and remove my severage liabilitie obgligations.
I told him that business evaluations mean nothing. Getting an accounting firm to look at your financials and calculate EBIDTA and multiples is a waste of time. Even when I had a beer yesterday with Glenn, the business broker than helped sell my business, he told me that the last 10 deals after mine had nothing to do with the financials and he made a recommendation to the President that they don't waste there time with traditional evaluations anymore, he though the money would be better spent in marketing and presentation materials for their clients opportunities. I agree. He had once told me that the way I sold my business was something they were not used to and I actually taught them something and now they are running with it for other businesses.
I suggested to Geoff that he prepare the business to be sold as a tuck in. That he find a company that can absorb his business into their building and they would essentially be buying his sales, not his business as a going concern. In doing that you don't even show financials. You just show the account list and sales revenues, any equipment and let them make an assessement of what those sales would do to their bottom line. With the yearbook division I had, I had sales of $2.7 million and sold that division for $1.9 million cash plus they took my people. I told Geoff that if he found the right buyer I wouldn't be surprised if he could get $1.2 million. He would jump at that and he liked the idea of not showing financials. He's not the type of guy that likes opening his Kamono. He's very old school that way.
I then suggested that he has to act like he's super successful and rich and really doesn't need to sell, however he has so many other very profitable interests that he's sell if he could find the right fit for the business and his employees. I did that when I sold. They all thought I had a billion dollars in the bank. I was in meetings with all the purchasers with my T-shirt, jeans and sneakers on the table or relaxed on a chair as I discussed the business with the suits from the other companies. I call it the sell anti-sell. Unfortunately for Geoff he has a limited market of buyers in Winnipeg as oppossed to Toronto.
The one good thing about selling his business is printers are desperate for sales. There is no new business, clients are moving and the cost to hire sales people to acquire new business is extremely expensive. To get $2.5 million in sales a printer would probably have to spend $250,000 per year and it would take about 5 - 7 years to get the sales people to get to that level and even that's a big maybe. If a business could buy $2.5 million of sales and tuck it into the existing building and overheads it's not unreasonable that $500 - $800,000 could flow right to the bottom line. Even if they paid $1.2 million the payback would be less than two years. This train of thought was something that Geoff hadn't thought about before.
Aside from the business discussions we had personal discussions and I brought him up to speed about my dad and all that train wreck stuff. Geoff's like a brother and at one time he disclosed to me some very personal stuff about his first wife and himself which blew my mind, I did the same for him discussing a little about my childhood. He knows my dad and my family and had no idea and wouldn't have even guessed it. I also brought him up to speed about my being diagnosed as bipolar. It was a good discussion.
We got to bed at 2 am. I wasn't too bad and wasn't in hangover the next morning territory. I did have to be somewhat lucid for my meeting with Wayne tomorrow.
Swim - 1:04:48 / 3100 meters
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