Humpty Dumpty is back to together
You hear all the time how expensive turnover is - really in any size business - but how especially in small companies that are busy, talented, and run at full capacity. I’m only now realizing the full extent of the cost of my project manager/designer/assistant/designer/draftsperson/client concierge/receiver/shipper/office manager leaving in February.
I’m realizing it because I finally put the band together again, and this time I actually put it together in a reasonable fashion, with reasonable expectations, and reasonable chances of success. In the last year I took a position one person handled for 8 years - building 15-20 homes a year - and teased it out into 3 positions, all with a specific lane, all with cross-training and cross-participation in the company - ie, redundancy.
But I literally lost a year of my life doing it. One morning started like any other, and by the end of the day my world was turned upside down in terms of lay in store for me. Mind you, I can’t say I was hands off, but I definitely wasn’t in the weeds. I soon was, way in the weeds, and I can say unequivocally that was exactly what the company needed. I was exposed to every process, relationship, excess, scarcity - no one and nothing could hide from me, and what I realized was how many of our partners were phoning it in. Nothing against them, but the previous employee just let this slow creep of other people letting her do their work, organize them, baby them. That was the first thing that changed - as most of our vendors largest customer, each and everyone of them is giving us 2x if not more what they gave us 10 months ago - i.e., they are doing their job, doing it better, doing it with more foresight.
Also, and I’ve mentioned this before - I have good relationships with my partners/vendors/suppliers, but it was a little hands off. Not now. Now I’m in there, solving problems with them. And I’m an expert. Everyone benefits from my participation. Everyone benefits from my intrusive and curious knowledge of each job.
But, as I started this thread, I’m only now adding up the costs. I’m realizing it because now that I have an executive advisor (sort of like executive assistant but more, much more), on-staff designer/architect, a person dedicated to scheduling, ordering and receiving, a finance person and a backup book-keeper, and I’m booking business like nobody’s business. Selling houses, signing deals, buying land, planning for the future - using my full set of newly honed and insightful skills in meaningful ways. I bet this turnover cost me $500,000. Not in lost revenue, but in lost profit, it was that disruptive.
But there’s an old saying in politics that you should never let a ‘good crisis go to waste’ a similar thing holds true in business - when in chaos, take care of all the things you need to because the incremental chaos is marginal - when things are going well, you hate to rock the boat. When the shit hits the fan, keep throwing more shit at the fan until it washes itself clean.
We are cleaned up, ready to roll, and I’m excited about it.
I’m also on vacation in NM/Utah/Arizona/California, and I’m just starting to hit my vaca vibe. First stop Santa Fe, which I now love.
Vacation
An early Saturday after wrapping up work, and now I’m off for 2 weeks of a seriously earned and seriously needed vacation out in the Southwest US, after 2 night in the NYC.
I’ve been having some bad luck with my big city timing and hotels - Jacksonville, for the Georgia/Florida annual party/football game, the hotel prices were off the charts, partly because I thought the game was in Gainsville and thus had to book the hotel late after I figured it out. I happened to be in Kansas City when Taylor Swift was in town and normal $125 room was $700 (though I was in town for the beginning of the Kelce/Swift romance), and now going into NYC today, and the marathon is happening tomorrow, meaning rates are top tier.
Took my son to the Fl/Georgia game for his 15th birthday - left on a Friday and came back on a Sunday. All in, over $5000 for plane tickets, parking, hotel, game day tickets (sure we were in the 10 row), eating, souvenirs, river ferry, etc… Not sure when I became the guy who can lay down $5k for a birthday weekend for my first and only son, but I am he. It’s not as gross as it seems - I literally haven’t been on vacation since sometime last year, and our annual sojourn to far off destinations didn’t happen this summer because Lucas wanted to stay local and hang with his friends - so in terms of actual vaca spend, we are well below our average. Hope to correct that forthwith.
Just put away the Van life camper for the winter. Unhooking the hoses from the exterior faucets, putting the plows on the trucks, just getting ready for a winter of unknown ferocity that may or may not be right around the corner.
We listed our first mini micro cottage yesterday and got several offers within hours. That was encouraging, and takes me back to 2007 when these small homes filled a market need. It’s fun revisiting them, tweaking them, making them fun and alive. Unique to the marketplace for sure. Sought after for sure.
We remain busy. I leave the office for 2 weeks after spending most of 2023 restructuring the company which took several effort and several tries, all stressful and time-consuming. But each one resulted in a little more information about what I was trying to achieve. In the end, I more than doubled our office staff with high caliber individuals which should create a better client experience, and create a level of redundancy that was sorely needed. It should also open up some capacity for chasing more leads that we previously let slip through our fingers. It’s also expensive, so need to keep booking business.
So here I come Santa Fe, Durango, Monument Valley, road tripping, and finally Palm Springs CA, filled with spa days, reading works for fiction, hiking, and recharging.
Healthcare
Watching as we see our government prioritizing Israel and Ukraine before healthcare for me and my neighbors is really salt in the wound, especially for a small business, where healthcare benefits are both necessary and an existential threat to the bottomline and business viability. I’m not sure whose business grows at a predictable enough clip in order to pay for healthcare premiums that double every 4 years but if my predicament is any fair sampling, it doesn’t pave the way for restful night’s sleep. It’s frankly ridiculous.
I inhabit, and work in, a rarified space of affluence and wealth, which I have no regrets or guilt about - I know I’ve worked my tail off to get my share and have taken gigantic risks to achieve it. I’m pretty sure my clients haven’t been handed their wealth either. That being said, I also inhabit and work in a space where people struggle with health care, rents, gas, college, homeownership - and frankly, these people are being suffocated by the American Experience. The economic and opportunity boot is squarely on their necks. That’s not the way it used to be.\
Which brings me around to something I noticed with my healthcare now that I’ve used it for the first time the past two years. By ‘used’ meaning I had $6k-$10k of healthcare expenses - last year for my son’s elbow surgery, and this year for my shoulder surgery. 1, it worked pretty well, the mechanics of it, the doctors, the experience. 2, might be a coincidence, or maybe not, but both of these run-ins with the healthcare industry and my health care plan ran up charges that ate up all my deductible, and ate up all my out of pocket, and stopped just short of actually having $1 paid by the insurance company. $8200 - just under, for each of them. And they happened in separate years, so the cost of one didn’t overlap with the cost of the other. In the future, I’m going to try overlap our medical needs more strategically!
Call me paranoid, but it’s hard to think this isn’t somehow a rigged game.
Small homes
We like our small houses, in fact, was ahead of the curve back in 2007 when we came out with our 2 bedroom, counter-intuitive cottage series. Back then, height of the boom, bigger was better. Bigger house, bigger mortgage (lower downpayment!) - bigger bigger bigger. But in Sullivan County, where we only built back then, the sweet spot for pricing was $300k-ish, and so with some savvy market insights that have served me well from day 1 of this entrepreneurial journey, I thought I saw what no one else was seeing - that our NYC clientele didn’t need a big house, in fact, given their druthers, wouldn’t actually want a big house - and nothing right-sized was being built or available.
So, with the help of the Sears Roebuck catalouge of the 1920’s, as well as some studies of other small homes, we came up with some good looking 1300 sq ft homes that we could sell for the $300’s. They were a hit and carried us right through the international real estate collapse of 2009. Our Cottages -
On one of our favorite roads in the Catskills is Lake Ridge Road in Narrowsburg. It used to be lake front lots, but the damn broke back in the 60’s or something so the lake went away. But the lots remained. The challenge of the lots is that they have minimum road frontage - 200’ - meaning an ill-planned house can quickly overwhelm the lot and encroach on neighbors - bad for everyone, bad for values.
So we’ve always stayed modest on our home sizes up there, and no better time than now to reintroduce our mini-cottage homes. Part of the secret of our small homes is we don't skimp on the land, or the components and products we put in the homes - they are smaller yes, but they maintain the same level of care and finish as any of our homes.
Will be interesting to see how the market reacts to these homes - it's been very eye-opening to price these homes, since at lower sales prices you need to be pretty careful about pricing or you can lose your knickers - shit is just so expensive - these homes are literally costing me $75k more to build - or 35% more than the last time I built them.
