by Paul Downs
After the meeting, I ask Bob Foote about the mess in the shop. “Where’s Jésus? I didn’t see him at the meeting. Do you know what happened?” Bob was on vacation last week. He says, “He’s not in yet, but I don’t know why. Should I call Simba?”
Simba is the person who employs Jésus, who isn’t actually on our payroll. It’s an odd arrangement, driven by the fact it’s been much harder for me to hire low-wage workers than high-wage workers. My low-wage jobs are low-skilled, implying that many people should be available. But that pool of workers contains a lot of people with problems—and an even larger group of people who are capable of advancing to better jobs, who leave as soon as they can. Businesses that rely on low-skilled labor must have strong supervision and a rigid system of rules and oversight. And they need to hire and fire constantly. None of my skilled workers needs to be treated this way, so we don’t have such a system. In the absence of said system, the hiring and firing lands on me. And I hate it, and don’t have time for it. What I need is a low-skilled worker who is content to perform a simple, repetitive job, without much supervision, for years on end.
My previous sweepers have been of the “too smart for the job” variety. Bob Foote, for instance, started with a broom, and now he runs my shipping department. Eduardo was the sweeper for a couple of years, but I could see that he had potential and moved him to the bench. I have, on occasion, hired high school students, and they always end up leaving for an easier job or college, even when I pay them twelve or thirteen dollars an hour.
If we don’t have a sweeper, Steve Maturin has the whole crew clean the shop. This takes everyone thirty to forty-five minutes, a loss of at least six hundred dollars in production, three days a week. That’s $93,600 each year. A ten-dollar-per-hour worker costs me about $27,500 in wages and taxes each year and will clean every day. It’s a no-brainer.
Last fall, I tried a different route to filling the sweeper job. There’s a factory downstairs from us with about a hundred employees. A van pulls up to the building every morning and disgorges a load of workers, usually a mix of Asian ladies and Hispanic men. I asked the owner how she found her low-skilled staff, and she directed me to her shop manager, Carl. He introduced me to Simba, the van driver. A young Asian guy, he owns an employment service that leases workers. This is a common way to get temporary employees. Some businesses do this with all their workers, to avoid the complexity of HR and taxes.
Simba provides documentation that all his people are legally eligible to work in the United States, and in return he receives a cut of their wages. He’d be happy to set me up with a good worker, he said. He would charge me thirteen dollars an hour, including all taxes. What was I looking for? I told him that I wanted someone who is physically strong, works hard all day, has good English, and is smart. Simba promised to deliver this paragon the next morning. So that’s how we got Jésus. He didn’t actually speak English, but he did everything else on my list. He followed directions and was an incredibly hard worker. He seemed very happy to be working indoors for a company that treated him like a human being. I didn’t worry about him at all, and Bob Foote liked him a lot. He was perfect. Almost. Jésus has a tendency to disappear now and then, and we can never figure out when this will happen, or what causes it. Simba, when we call him, will say only that Jésus will be back soon and offers another worker if we need one immediately. We tried that once but didn’t like the new guy, and we told Simba that we’d rather wait for Jésus to reappear.
I told Bob Foote to call Simba, and he soon returns with the story. “I talked to Simba, and he said that Jésus is hurt or something and that he won’t be back for a while. Like, months. He didn’t say it happened here, so I guess it’s something else.” We’re both thinking the same thing: good that it’s not our fault, but it sucks that we won’t have Jésus for a while. “Do you want me to call Simba and ask for a replacement?” I tell Bob I need to think about it. Meanwhile, Steve Maturin should have the whole crew do the cleanup. Just like when I fired Eduardo, I can’t help but do some quick math: thirteen dollars an hour, $520 a week, $27,040 a year. And one less person to worry about. I’ve been thinking about matching our labor supply to our reduced workload for the last month, and now two of my guys just laid themselves off. This gives me a little more cash on hand and delays the day that we run through our whole backlog.
I go back to the office and find a bunch of e-mails from Dubai and Kuwait. Mr. Kipson Jaja eagerly awaits my printed materials so that he can start showing my work to customers. Ditto from Jabril and The Sheik. In response to my request for drawings, Shiva says they haven’t finalized anything yet; she’ll send them when she has them. This is a little worrisome, given the short schedule. I sign the checks that were written last week and look at what money came in. We received $47,511 and spent $56,548. My bank balance stands at $98,059. Two-and-a-half, maybe three weeks of operating funds. But all the money everyone owes me comes to only $56,136.
—
ON THURSDAY MORNING, we put together the Eurofurn showroom table for a final inspection. Ron Dedrick has done a nice job:
Bob Foote breaks the table down, wraps each piece in a moving blanket, and heads off to New York. The next morning, I find an e-mail from Nigel in my in-box:
Hi Paul,
Bob installed the VC table today and I would like to bring a few issues to your attention.
The removable base panels have a very large gap on each side.
The removable base panels are loose at the bottom and rattle easily.
The solid wood edging has inconsistent color.
Gaps on the data lids are overlarge.
I have attached some images of the above-mentioned issues. I would also like to show you this in person and discuss some other areas of concern with the table. When would you be able to make a trip up to the showroom? We have some clients visiting the showroom next week and I would like to resolve this urgently.
I’m furious. His list complains of details required to make the table function properly, except for number three—an inconsistent color is an inherent feature of walnut, the wood they chose. In fact, it’s what makes the wood beautiful. It’s Friday morning; do they expect me to somehow fix all this over a weekend? Are they really unwilling to show my work to a client? I’m so mad, I turn to other projects to calm down. Then I think, Get over yourself. They’re being unreasonable, but you need to work with these people. You need money. Remember Nigel’s promise of a million dollars in the first year? Even a quarter of that would be huge. Think of that. When I finally call Nigel, he is very cordial, but insistent: he wants me to come get the table, ASAP. I agree to drive up tomorrow morning.
Saturday, seven a.m. Midtown is quiet. Nigel is on the loading dock with the disassembled table. He hands me a list with twenty-two changes he wants to make. Most are very minor adjustments to something that was described in the shop drawings and approved. Some are changes to the actual dimensions—the top a little rounder, the gaps in the lids reduced to one millimeter. Others are about how we executed the design, in particular the amount of sanding. A freshly machined piece of wood has edges sharp enough to cut flesh, so we round them over to make them smooth and friendly. This is all done by hand. It’s not something that you put into the drawings; it’s a decision that happens on the shop floor. Nigel wants a sharper look to the edges and corners.
I’m stung by the rejection of a perfectly good table. This has never happened to me before. All the things that we do to make sure a customer knows what he will be receiving—the SketchUp models, the shop drawings, the finish samples, the photographs of similar pieces, the interactions with the salesperson—are designed to prevent what just happened. And they have always worked, including our other jobs for Eurofurn.
I explain our choices to Nigel. He agrees that the decisions we made are sensible, but he doesn’t like the look. I tell him that the only way to make all his changes is to start over again
. He shrugs. Will Eurofurn pay us for that? No. I should look at it as an investment in our relationship. He’s got me. I don’t want to walk away. I need customers. So I agree to take the table back and start a new one.
—
MONDAY. I’M SITTING in my office, trying to figure out what to tell the crew. Today is June 18. If we had hit our target, we would have booked $126,000 in new orders. Our total so far: $28,503. The inquiry stream holds no promise, either. Last week we got thirteen calls, but six were garbage. The others are the usual grab bag: three from military units, which have a long procurement process; two from schools, ditto; and two from private companies that might be able to make a decision quickly. A fast order or two would be greatly appreciated. Our backlog is below four weeks.
I fought a gallant battle to limit spending last week. I wrote checks totaling $14,653, but we received only one payment: a deposit check for $4,032. We’re down $10,621 for the week, $49,716 for the year. I have $87,438 in the bank, less than three weeks of operating funds, and another $34,000 in my personal accounts. If we don’t get some cash soon, we’ll run out of money before we run out of work.
I have continued to announce our sales figures and cash position each week. I think I should keep on doing this, even though they are terrible, because a sudden stop would be even more alarming. Nobody benefits when management lets wild rumors circulate. The stress leads to wasted time and sloppy work. I need the guys to continue to produce as fast as they can, without errors. We cannot afford rework. We collect cash when we deliver well-made tables to happy clients. None of our customers knows anything about our troubles. They’re looking forward to receiving their tables, admiring our craftsmanship, and paying us. Those payments delay the day that the doors close, and give us time for something good to happen.
But what if something good doesn’t happen? The thought won’t leave my mind, even as I stand up in front of the crew and go through the numbers. Everyone is sitting quietly, as usual, but paying close attention. I wrap up the summary of cash and sales, then pause. How should I say this?
“I think that everyone can see we are not heading in a good direction. I honestly don’t know what is happening. All the things we”—I nod to Dan and Nick—“are doing have worked for years. I haven’t changed anything big in AdWords. We just aren’t getting good calls. And buyers seem afraid to pull the trigger.”
I pause again. I haven’t let my Monday speeches take such a negative tone before.
“Last time we were in this kind of trouble, in 2008, my partner kept me from telling everyone what was happening until we actually ran out of work. I swore that I would never do that again. So here’s the truth. This is not a good situation. We are running out of work, and we are running short of cash. We’re not done yet, but I can’t pretend that it couldn’t happen. I still can’t believe that we’ll actually have nothing to do. We haven’t had a month with no sales since—I can’t even remember. So jobs are going to come in. The question is, how do we slow down our operations? There are two ways to do it: everyone works less, and gets paid less, or a couple of people get laid off and the others keep working full time. Worst case, the full-time workers take a pay cut. That’s what we did in 2008, and it sucked for everyone. But we survived, and I raised pay back up within a year. I’ll tell you, also, that back then I cut my pay by twice as much as everyone else, and I was the lowest-paid worker in the shop. And this year, I’ve already stopped paying myself. I haven’t had a check since April. But I can’t promise that I can get us out of this myself. It doesn’t save enough money. We may all have to share the pain.”
Total silence. I just gave a speech that could prompt the best workers to start looking for other jobs immediately. I’ll be left with only those too fearful to make a move until there is no other choice. Is there anything I can say that will prevent defections? Or maybe I’m being too negative? Can I expect loyalty in return for my honesty? I have little to lose.
“Here’s what I need from all of you. I’d understand if some of you start looking for jobs. I can’t stop you from doing that. But we’re not dead yet. I need everyone to keep working, and I need the work to be good and the jobs to go out on time, and for us to get paid for the work on our books. If we do that, we have another month or so of money coming in. And another month might make all the difference. Dan and Nick and I are going to be getting special sales training starting in July. We always get a bunch of inquiries from the military in July and August; some of that is bound to come through. I have a project from Dubai that they need in a hurry. Eurofurn keeps sending us orders, and they have promised a lot more. Maybe the World Bank will call us again. I just can’t believe that nobody will buy anymore. I’ve been through this so many times over the years. We’re heading for disaster, just like a truck speeding toward a brick wall. I’ve found that the only thing to do is to keep the gas pedal hard to the floor, and every time, just before we hit it, the wall just vanishes. Something will happen. I’m sure of it.” I pause again, looking around. No apparent reaction to my rousing conclusion. “OK, that’s the meeting. Let’s get back to work.”
I’m heading back to the sales office when Ron Dedrick stops me. “That was a good speech. Thanks for telling us what’s happening. I’ve been through this in other shops and it sucks when nobody tells you what’s going on.” I give him a confident smile, thank him, and assure him that we’ll get out of our bind. “Yeah, maybe,” he replies.
—
DAN, NICK, AND I settle down in front of our computers. I should be doing—what? Proposals? Revisions? Brochures? I’ve reached a state of perfect paralysis. No matter what I choose to do, I should probably be doing something else. And no choice is likely to lead to immediate success. And that drains any enthusiasm I have for doing anything. I need a distraction, but not a pure waste of time. I decide to see whether my increased AdWords budget has had any effect.
I’ve managed to stay away from AdWords for almost a month. Hopefully that’s long enough to see a pattern in response to increased spending. Whatever Google’s data shows, I know that the number of inquiries was worse than it was a year ago and worse than the beginning of the year. Looking at my spreadsheets, I can see that between January 1 and April 1, we averaged 16.23 inquiries per week. Between April 1 and May 20, when I bumped up the budget, that number had dropped to 12.38 per week. And after shoveling more money at Google? Over the past month it declined again, to 10.8 inquiries per week.
I log in to AdWords and see what Google thinks is happening. Since the beginning of the year, they have shown my ads 978,202 times. That’s a huge number. Unfortunately, the viewers of those ads were largely indifferent to my messaging. We got 15,286 clicks—still a very large number of interested parties, but just 1.56 percent of the impressions. I hope that the people who clicked did so because they are eager to buy a table, since each click cost me $3.78, for a total of $57,781. But maybe they were just curious, or clicked by accident. How many of those clickers took the trouble to complete an inquiry through our Web site? Just sixty-five. How many of those sixty-five people actually bought something? I don’t know, because some people just call us instead of submitting an inquiry through our site, and we don’t know which of our buyers did which. I do know how many of my buyers reported finding us on the Web: forty-seven, whose orders total up to $668,816. That’s 80.4 percent of our total sales, $831,777. All my other efforts to drum up work have not amounted to much. I really, really need AdWords to come through for me.
After an hour, I stumble upon a graph that appears to answer my questions. I am looking at the pattern of daily spend and daily clicks from January 1 to June 18. Since I don’t buy ads on the weekends, the graph looks like a long line of haystacks in a flat field:
On the day I increased the budget, toward the right side of the graph, the number of impressions jumped up sharply from about six thousand to ten thousand. The highest totals come each Monday, and the highest
total of all happened on the Monday after I increased the budget: 18,626 impressions. It’s weird that the impressions drop off each week after Monday, with an occasional reversal, but always declining from a peak at the start of the week. That’s not what I see in my records of incoming calls, which average 2.58 per day on Mondays, rise to 3.65 on Tuesday and 3.54 on Wednesday, and then drop back to 2.50 on Thursday and 2.55 on Friday. Hmmm. I rejigger the interface to show cost versus clicks:
It’s the same pattern: more spend leads to more clicks, but those clicks decline throughout each week. I look at one last combination, costs versus the number of people who e-mail us an inquiry. These are called conversions:
This view corresponds to our reality. The increased spend didn’t change the number of conversions, and the total for the past two months has been lower than it was at the beginning of the year. The increased spending hasn’t done anything for us, yet. But why not? Google has delivered what it promised to do: more impressions, more clicks. But that isn’t translating into calls and sales. What is happening? I’m stumped.
I hear a happy clap of hands from Nick. He has just closed a deal, worth $11,599, to a biotech company in Texas. Maybe this will be the start of a turnaround. At the end of the afternoon, he closes another deal, worth $8,063, to a school in New York City.