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Are Your customers stupid?

A story about the father & son, long standing, “50+ years in business company” that purchased my company.  I would write a letter every year to my customers thanking them for their business, wishing them a happy new year and telling them something positive about doing business with me.  One year was that the price of the service agreements would not go up this year, another time was that the cost of labor on our flat rate service price book was down 4% and that would be reflected in the new price book, and sited 2 examples of labor only flat rate repairs, like: clean & adjust electronic ignition old price $62.59 new price $60.09.  One year I just told the customers that My son was doing great in Track & Field and holds high school records in 5 different events. He was offered a scholarship to The College of New Jersey to be on their track team. But I digress…

The new owner of my customers read a letter I prepared with the "good news" that I was partnering up with the new company and the "good news" is that there will be more technicians available for emergency service calls and more years of experience and several other "good news" items about the purchase of my company by their company.  This corny communication was what my customers were used to receiving from me and my son.  They often commented  on some of my comments in the letters to me and the other mechanics during their maintenance visits, so I knew that many customers read these letters. 

The buying company’s father read the letter I prepared and said this crap was too corny to originate from this firm and filed the letter in the circular bin next to his desk.  He did agree that my customers should be notified that there was a new owner and composed a no nonsense business letter and mailed it to all my customers on the new company letter head.  The majority of these letters went into the customer’s circular file as the letter head and return address on the envelope was unfamiliar.   After several months of customers not recognizing the new truck with a different name and different mechanics arriving to service their equipment,  Mr. J wanted to know if all my customers were stupid.  Can’t they read a simple letter that explains what has transpired?  

I just had to agree that he knew better than I about how to operate a business at a profit the way his father told him to run a business.  Heaven forbid that I might inform him that a letter with my return address and my letter head would have been a better idea.  Even if it was not corny and said exactly what the letter he sent out on his letter head.  Jeff knew what he was doing and my customers were stupid for throwing perceived junk mail in the trash.

BOTTOM LINE: If you go through with the purchase, expect to operate the newly purchased company as if there has been no change, and you are just the new guys that work for the existing company. Answer the phone the same way the previous owner answered the phone. Send letters and invoices out using the envelopes with the company name and address the customers are used to. Change the name slowly over time if that is your intention. 

Consider not changing the name at all and tell your customers that you purchased the new business and let your customers know that you will be sending letters and correspondence with the new name. You are growing and becoming more successful.  Ray Kroc did not change the name of his company after he purchased it from the McDonald brothers in 1962.  Somehow I don't think I would like to be eating a Big Kroc, even if it did have two all beef patties and special sauce.    What Crock of stuff did that special sauce come from anyway?

For the large amount I would want to see his client list, and financials showing what he has paid himself.

Do you get the company name and phone number?

How many hours a week does he work for that salary?

Tools, truck, inventory?

40 hours a week, 50 weeks a year= 2000 hours

So you need to add at least $50.00 and hour to your labor rates just to pay him

If all three if you want 100k a year, $150 per hour per billiable hour just for salary.

Its doubtful you will have that many billable m, productive hours a year, so maybe pushing 200 per hour

Here is a really good deal 😁 to maybe help with some number crunching

@ScottSecor

Seeing how you mentioned paint I just got back from Cape Cod for 2 weeks. They have the Bourne Bridge and the Sagamore Bridge they want to replace (only two bridges access the cape) and they get LOTS of traffic. All riveted 500 + feet each built by Bethlehem Steel in 1935 and shipped to the job in pieces. they are in good shape but are very narrow, I guess 1930 cars were smaller.

but back to the paint.

They also have the Cape Cod Railroad bridge that spans the same 500' wide CC canal. This doesn't have enough clearance for big ships to pass so they raise and lower the bridge with electric motors. It's the second largest vertical lift bridge in the US, i think. It has 1000-ton counterweights at each end. i forgot what it weighs but it's a lot.

But back to the paint.

I guess because the bridge and the counterweights have to be almost perfectly balanced so the motors don't have to work as hard

Every time they paint the bridge, they have to scrape all the old paint off

I had the certificate framed and it's hanging on the wall.

"They need the door open for several reasons, they bring the material in with a loader, and then it gets placed with a 308 CAT excavator onto the conveyor. So they want the door open for the fresh air (i already told them bad idea) but also they run that loader in and out about a 100 times a day"

What a god awfull idea. Running a diesel engine inside a building.

Why don't they do things the normal way. An overhead trolley crane with a grapple. Staging area outside for unprocessed material. Crane moves material from outside in through a small opening right to the conveyor. Forklift inside for handling the bales.