Question
Insomnia comes hand in hand with custom cabinetry... I used to get two hours of sleep per night designing, visualizing, and building things step by step in my head. I was truly 100% passionate about creating from my mind's eye. I would often toss and turn for hours and come to terms with the fact that I wasn’t going to sleep, so I'd get dressed to solve a problem in the shop.
Now having gone on my own, I am facing the common problems of a start up cabinetry business. My insomnia is no longer due to my passion. Instead I am dealing with clients who fail to keep their own schedule in the DIY portions of their remodel, setting back other subs, which of course domino effects my schedule. With a contract which reads 50% down, 50% upon completion, my cash flow begins to suffer. Then the next client in line can’t make up their mind for a month and a half what they want to do while my bills keep compiling. No calls, no e-mails, no sales. The indecisive client comes closer to finding the courage to take steps toward their new kitchen. I finally get to the point of handing them an agreement prior to a deposit and they want to wait another week while they have the agreement looked over. I am emotionally worn out and am experiencing severe difficulty in getting to sleep because of it.
I spent the last year in San Francisco and even went out to New York (Staten Island) for 6 months. I wanted to take opportunities as they came and they were great experiences, which gave me the confidence to take on business in my home town. This winter/holiday season has created a dry spell in business opportunities for me and I am often feeling like I am sucking wind. I have a NKBA designer who has given me a few jobs, and if it weren’t for her, I would have gone under a long time ago. She understands passion and quality and it makes me feel good that I have her confidence. That at least keeps me keeping on.
I am confident that the dilly-dallying clients’ deposit will cover all of the materials and my overhead expenses including overdue bills and I will survive for a little bit longer. I am hoping the spring and summer will pick up as I round into my first year of local business. It is so very hard.
Please share some similar experiences and some motivation. I am going to go pick up some sleep aid pills. Until I get the deposit on this job I am out of work. It is an African mahogany kitchen with birds eye maple panels. All pull outs in lowers on Tandem Blumotions and crown. Or at least until another change is made, setting it back another week.
Forum Responses
(Cabinetmaking Forum)
From contributor X:
I wish I could say that as time goes on, it gets easier, but it doesn't, and I can't say that. In that passage of time, problems are constant. It's always something. Like the old saying, "You worry about how to earn money" versus, "Once you get money you worry about how to keep that money that you earned." Problems never end. All you can do is just plug along and do the best you can.
Since you have cabinetry as your main line of work, you might consider a secondary field of work to do also when things get slow to help pay the bills. Sit down and make a list of all the things that are made of wood that you might try making and selling. An example might be a walk in refrigerated cooler, or a swag lamp, or a ruler that has advertising on it. Whatever, it's something to keep the wolf away from the door. Who knows, maybe the secondary field is a gold mine for you. Expanding your thoughts outwards might solve your lack of sleep.
Also, as to the 50%, your wording above was "on completion." If you completed it, then they should pay, however I suspect you really meant installation. Change your agreements to 50-40-10. The 40 is due upon completion and regardless of delivery/installation. Then add on a storage clause. Ask your designer to refer you to some of her competitive friends or just ask her for other contacts like her that you can follow up on.
Once you crossed over from employee to business owner, your whole mindset changed focus. You can no longer afford to just show up and milk your way through the day and still collect a check on Friday. Instead, your realization that unless you are productive at all times, you don't get paid is a very real concern. One that eventually gets to all of us. So, what are some solutions?
Well for starters, you need to set a personal schedule, one that you don't violate. Whatever quitting time you choose, stick to it. Your customers will wait, some more patiently than others.
Another solution that I see as a problem for all start-ups is the 50% down 50% on completion farce. What I mean is that if you are using that formula to collect your money, you will fail. It's inevitable. One rule that I have always followed is actually pretty simple. If I have a job that I figure will take 6 weeks to complete, I add two weeks and then look at how much money it will take for me to buy all of the materials, pay my labor and pay myself for those six weeks. With that number in hand, I sit down with my prospect and tell them that if they want my undivided attention on their project to the exclusion of all others, this is the amount of money that I will need as a down payment. We can certainly work out a draw schedule to accommodate both of us if the down payment is substantial. Otherwise, I tell them that I'm working multiple projects because after all, cash flow is king. By the way, I firmly believe that you will sleep better once you get a handle on your cash flow. Good luck and keep the faith.
Here's what helps me and maybe others. Once your business takes off, save a rather large sum of money and put it in your business money market account, your business reserve fund. Don't touch it, but borrow from it if needed if a good customer is dragging their feet on final payments or you need something important for your business. Then borrow some money from yourself (to maintain your peace of mind). Then pay it back as soon as you can. I know some say why not set up some type of loan from the bank. That would only get you in more debt and interest, therefore more sleepless nights. These problems never go away, as it's human nature that is driving what your good customers are doing, and that is never going to change. Save what you can to build up your reserve. It works better than Ambien. Everyone is different.
As said before, sleeping pills aren't the best solution. My doctor gave me a box and so on Saturday nights I'll take one and get about 6 hours of sleep. But it's not as good as a normal night's sleep and makes me groggy the next day.
I would also suggest changing your payment plan. This is just my opinion, but I think that's a terrible way to have your payments set up. You're just asking to get burned for a lot of money. I know guys do a variety of different payment schedules so you'll have to do what's right for you. For my work I get 40% down payment to schedule the job and order materials. Once the cabinets are built and ready for finish, I get the next 30%. The final 30% is collected upon installation. This keeps the money coming in a little more regularly and prevents you from having such a huge balance due at the end of the job.
I gathered a lot of advice to modify my payment terms. I actually thought it would be fine to do small jobs with those terms being as though it was a bathroom vanity. Regardless, $1,200.00 is a good sum of money to be put off for an entire month. I will never do 50-50 again. It truly was a learning experience.
I offered these terms in my agreement for this kitchen:
- 50% up front to cover initial costs.
- 30% upon completion of fabrication to a functional state.
- 20% after finish and installation.
Thanks again for taking the time for the very valuable advice. It’s just a very difficult time.
