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G-Man

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So, I quit my job after reading TMF . I got what I thought was a relatively boring 9-5 that morphed into a working for equity roller coaster ride. That equity might be worthless. It might make me a millionaire. The company is currently in a dive. After we fired the controller, I spent the weekend at the office and discovered an unforeseen situation that makes us broke. We thought we had another 8 weeks of runway to close a deal. It's now turned into a fire sale.

In all of this, I go to the office every day with a great sense of opportunity. Change in the status quo is an opportunity. Every disaster is an opportunity to learn, and make myself an even greater asset to... myself.

I think all of this would be crushing me right now if it weren't for the difference in outlook I've gotten from both MJ's book and the awesome content by the people here.

Reps to:
@Scot
@Kak
@MidwestLandlord
@AndrewNC
@SinisterLex
@Vigilante
@MJ DeMarco
@jpanarra
 
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Scot

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So, I quit my job after reading TMF . I got what I thought was a relatively boring 9-5 that morphed into a working for equity roller coaster ride. That equity might be worthless. It might make me a millionaire. The company is currently in a dive. After we fired the controller, I spent the weekend at the office and discovered an unforeseen situation that makes us broke. We thought we had another 8 weeks of runway to close a deal. It's now turned into a fire sale.

In all of this, I go to the office every day with a great sense of opportunity. Change in the status quo is an opportunity. Every disaster is an opportunity to learn, and make myself an even greater asset to... myself.

I think all of this would be crushing me right now if it weren't for the difference in outlook I've gotten from both MJ's book and the awesome content by the people here.

Reps to:
@Scot
@Kak
@MidwestLandlord
@AndrewNC
@SinisterLex
@Vigilante
@MJ DeMarco
@jpanarra


Every slamming door is an opportunity. Is there any way you can turn this failure into an opportunity for yourself? A fire sale is always a good time to buy assets, besides, you also have a in depth knowledge of what NOT to do.

I'm glad I could help you in some way. Hang in there. The measure of a man is not in how many times he's knocked down, but how many times he gets back up.
 

Kak

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So, I quit my job after reading TMF . I got what I thought was a relatively boring 9-5 that morphed into a working for equity roller coaster ride. That equity might be worthless. It might make me a millionaire. The company is currently in a dive. After we fired the controller, I spent the weekend at the office and discovered an unforeseen situation that makes us broke. We thought we had another 8 weeks of runway to close a deal. It's now turned into a fire sale.

In all of this, I go to the office every day with a great sense of opportunity. Change in the status quo is an opportunity. Every disaster is an opportunity to learn, and make myself an even greater asset to... myself.

I think all of this would be crushing me right now if it weren't for the difference in outlook I've gotten from both MJ's book and the awesome content by the people here.

Reps to:
@Scot
@Kak
@MidwestLandlord
@AndrewNC
@SinisterLex
@Vigilante
@MJ DeMarco
@jpanarra

Thanks for the rep! You'll pop out on the other end of this with a new outlook and armed with new knowledge to attack your business even more confidently.
 

MidwestLandlord

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I too am glad I could help in some small way.

I didn't believe it at first, but mindset, perspective, outlook, whatever you want to call it is really 99% of the battle.

Hanging out here with people like yourself, people that really "get after it", has been unbelievably beneficial to me...so thank you.

Keep going!

 
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jpanarra

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So, I quit my job after reading TMF . I got what I thought was a relatively boring 9-5 that morphed into a working for equity roller coaster ride. That equity might be worthless. It might make me a millionaire. The company is currently in a dive. After we fired the controller, I spent the weekend at the office and discovered an unforeseen situation that makes us broke. We thought we had another 8 weeks of runway to close a deal. It's now turned into a fire sale.

In all of this, I go to the office every day with a great sense of opportunity. Change in the status quo is an opportunity. Every disaster is an opportunity to learn, and make myself an even greater asset to... myself.

I think all of this would be crushing me right now if it weren't for the difference in outlook I've gotten from both MJ's book and the awesome content by the people here.

Reps to:
@Scot
@Kak
@MidwestLandlord
@AndrewNC
@SinisterLex
@Vigilante
@MJ DeMarco
@jpanarra

Hey! Thanks for the rep add! I'm honored to be on the list with all those awesome people. I haven't taken the full plunge like you have and quit my 9-5 job but I intend to when my cash-flow is enough to sustain myself and my family. That takes real guts so props to you and I'm sure you'll make it big sooner than later!
 

G-Man

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Thanks for the encouragement gents. I was just telling @Scot in a pm that, whatever happens with this, I have this unshakeable feeling that 2017 is my best year yet.

"When life closes a door, breach that F*cker and walk in like a boss" - t-shirt my little brother and his marine buddies have
 

jpanarra

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Thanks for the encouragement gents. I was just telling @Scot in a pm that, whatever happens with this, I have this unshakeable feeling that 2017 is my best year yet.

"When life closes a door, breach that F*cker and walk in like a boss" - t-shirt my little brother and his marine buddies have

I hope so! And I bet 2018 is gnna be EVEN BETTER!
 
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G-Man

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After we fired the controller, I spent the weekend at the office and discovered an unforeseen situation that makes us broke. We thought we had another 8 weeks of runway to close a deal.

For those that desire to learn from this shitstorm, it is a great example of @Vigilante's assertion that employees will never care about your business as much as you do. When we fired the controller, and I started digging, I found chargeback liabilities that were unrecorded. I don't think the controller was intentionally dishonest, but I think he subconsciously avoided acknowledging difficult realities, because he knew drastic measures would have to be taken, including laying people off.

When someone is an employee, their primary objective is to keep that paycheck coming, and it creates a sort of dis-economy that doesn't mirror the market reality the business itself faces.

Thanks @Vigilante - experience proves you right time and time again.
 

G-Man

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Somehow forgot @Andy Black and @jon.a rep ++ for making great content that I've benefited from.

EDIT: Also somehow forgot @Fox rep++ for showing that if you grind at something day and night for over a year, you have guaranteed overnight success.
 
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G-Man

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Another thing I've learned from this and another previous debacle is that being overcapitalized is your enemy. Being resourceful is so much more important than having resources. Also, especially with a physical consumer product, it's best to get deep early on into channels that have good turn even if they don't have the broadest market potential. It's important to have channels that predictably turn product into cash. Again, we didn't develop these until the last year or so, because we were overcapitalized and went after the bigger channels first. We got the bigger channels, and major national customers, but ramping up inventory for those things subsequently destroys your cash cycle.

Just a warning, I think this is going to turn into a G-man on the get back progress thread.
 
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G-Man

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Spent most of my day trolling the internet (including here) to avoid facing the music. Once I got back to work, I found more unrecorded trade spend liabilities, but at this point, I'm just numb to surprises. I engineered a plan whereby, if we commit by the end of next week, we can sell off the remaining inventory, pay the vendors, and pay the bank. Everyone gets paid, we lock the doors and walk away. Had another heart to heart with Mrs. G-man (she's amazing), and I'm not allowed to dip into our 12 mo emergency fund, which means that between me and the majority owner, we can only come up with enough cash to get us another 4-6 wks.

Lowered the valuation and have a chop shop M&A chomping at the bit, but we both know they would chain us to our desks for the next year, so we decided if we get to the point where that's only option, we're walking away. On the plus side, we have a PE firm that owns a larger company in our industry that's interested, but we'd need to come up with some debt to hold us over to make that deal happen. If none of it works out, they offered us jobs, so I guess there's that.

Has been an incredibly f*cked up and discouraging couple days, but I still feel preternaturally positive about it, and I think I have people here to thank for that.
 

MidwestLandlord

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Spent most of my day trolling the internet (including here) to avoid facing the music. Once I got back to work, I found more unrecorded trade spend liabilities, but at this point, I'm just numb to surprises. I engineered a plan whereby, if we commit by the end of next week, we can sell off the remaining inventory, pay the vendors, and pay the bank. Everyone gets paid, we lock the doors and walk away. Had another heart to heart with Mrs. G-man (she's amazing), and I'm not allowed to dip into our 12 mo emergency fund, which means that between me and the majority owner, we can only come up with enough cash to get us another 4-6 wks.

Lowered the valuation and have a chop shop M&A chomping at the bit, but we both know they would chain us to our desks for the next year, so we decided if we get to the point where that's only option, we're walking away. On the plus side, we have a PE firm that owns a larger company in our industry that's interested, but we'd need to come up with some debt to hold us over to make that deal happen. If none of it works out, they offered us jobs, so I guess there's that.

Has been an incredibly f*cked up and discouraging couple days, but I still feel preternaturally positive about it, and I think I have people here to thank for that.

Wowzer.

It sounds like at the very least you can get out of it without a huge loss, or did I misunderstand?

Surely there's a way to make it work yet? Are you confident enough in the PE firm to take on the debt?
 

G-Man

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It sounds like at the very least you can get out of it without a huge loss, or did I misunderstand?

I wouldn't lose anything except all the hours spent earning a stake in the company. The majority owner is unfortunately a different story.

Surely there's a way to make it work yet? Are you confident enough in the PE firm to take on the debt?

There's definitely a way to make it work, it's really coming down to what sort of deal with the devil we're willing to make. We're both guys that could walk away and start fresh at something else. At some point, sunk cost is sunk cost, and I think we're open to all offers that don't put us into indentured servitude.
 
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MidwestLandlord

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I wouldn't lose anything except all the hours spent earning a stake in the company. The majority owner is unfortunately a different story.



There's definitely a way to make it work, it's really coming down to what sort of deal with the devil we're willing to make. We're both guys that could walk away and start fresh at something else. At some point, sunk cost is sunk cost, and I think we're open to all offers that don't put us into indentured servitude.

If I had to choose between lost time, or lost money, I'd choose money. So that's still a loss in my book.

I always have a hard time knowing if I am just a few strikes away from hitting gold, or if I should of cut my losses long ago. So I've either stopped things too early, and don't realize it until later, or I spend way too much time on things I shouldn't have.

I'm getting better at this by disconnecting from the world for an hour or so, and writing on paper what I think will happen if I continue to dig, or if I cut my losses and move on. I use MJ's "what's the worst that could happen" and his "weighted average decision matrix" to help. So far, I don't think that process of decision making has steered me wrong.

I just take my wrangler up into the hills, turn off my phone, sit with a legalpad and MJ's book flipped open to the W.A.D.M page, and start writing. I don't go home until I've made a decision.

Quite a few times I've done this thinking I have only 2 options for my decision, and end up having an "ah ha!" moment and taking a totally different route.

My process. Thought I would share in case it's helpful.
 

G-Man

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If I had to choose between lost time, or lost money, I'd choose money. So that's still a loss in my book.

At this point, I've decided that I'm willing to risk my last bit of cash to see what we can make happen, but if we sell out to these M&A guys (these are not strangers, I know them, one is a minority shareholder), they would most likely work me into the ground for the next 6-12 mos then try to turn the company over to somebody else for a quick double of their investment, at which point I'd be politely told to go F*ck myself.

I'm mentally prepared to lose the money. I'm not mentally prepared to give the next year of my life to something that isn't mine.

I've got money in the bank, good credit, and standing job offers, so I'll eat the loss and move on. Once I had a couple of days to freak out, over-indulge in grandpa's old cough medicine, and then calm down, I was able to detach and realize it isn't all that bad. I'm not going to disappear from TFLF because I'm living under a bridge or anything. :)
 

G-Man

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We've got investors lined up. In the interim we're gonna use factors, banks, and I have the very last of my personal liquidity on the line.

We are going to have a national snack food brand.

I'll see you on the other side. @Scot @MidwestLandlord
 
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MidwestLandlord

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We've got investors lined up. In the interim we're gonna use factors, banks, and I have the very last of my personal liquidity on the line.

We are going to have a national snack food brand.

I'll see you on the other side. @Scot @MidwestLandlord

Yes!!!
 

G-Man

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To update all the folks that have been providing encouragement, sending PMs etc, we finally closed on a term loan! I never thought getting a loan would feel like an accomplishment, but after meeting about a gazillion bankers with a folder full of historical losses....

After the cuts, Jan should be our first profitable month, and that doesn't include the 600 stores we have coming online between now and the end of April!

We also have a well funded brand company interested in an acquiring the brand, and using us to run their back office and distribution. They have a sort of who's who of food industry folks to go pilot new brands, and they want us to be a turn-key back end for them, so there is a silver lining in the fact that we've done everything the hard way: rare competencies.
 
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If I read this correctly, you went from funding to make it through the week to a profitable month (with huge potential)?

Awesome!
 

G-Man

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If I read this correctly, you went from funding to make it through the week to a profitable month (with huge potential)?

Awesome!

Won't know for certain until I close the books on January, but my internal compass says we are right on break even and sometime in the next few weeks in Q1, the company will be profitable for the first time ever. May even have hit it this month.
 

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G-Man

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UPDATE: 99% confident at this point that my time in food startupland is coming to a close. If we don't close an equity round in 30-45 days, it's done. I'm at peace with it now. Back in January, my forecasts were showing us being insolvent in April. We've managed to stretch out funds this far, and I honestly consider giving the company that much runway to be one of the things I'm most proud of in my professional career. I have job offers on the way out of this, but I don't think I want another job. I only took this one because the equity side of it made for the possibility of a very lucrative exit.

If given the same set of circumstances and data, I'd do it all over again. It's been stressful, but an incredible learning experience. @Scot has been on me to start a food company, but I don't have it in me right now. Between the stress and constantly being surrounded by snack food, I've gained weight, don't sleep well, and feel like absolute shit. If it weren't for the fact that I'd get bored, the wife and I have even talked about going somewhere warm for a couple months and doing nothing at all.

I'm currently in the very nascent stages of a private label product for Amazon/e-commerce. It's new, totally unfamiliar, and the idea of selling individual items directly to consumers is, for some reason, far more daunting to me than selling pallets to retailers. @amp0193 and @PTP have helped me a lot so far, and I've made a product category selection, and have my first test order on the way.

There will be a progress thread when there's something to say.

Until then, as always, thanks to everyone here for all of their help and support.
 

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It's new, totally unfamiliar, and the idea of selling individual items directly to consumers is, for some reason, far more daunting to me than selling pallets to retailers.

No reason you can't start selling tons of these wholesale as well! Amazon is easy. You've already gotten significant mastery of the "hard" part.

@amp0193 and @PTP have helped me a lot so far, and I've made a product category selection, and have my first test order on the way.

@PTP is in north DFW area as well. 3-way meetup sometime? Would love to chat once you're up and running with the new biz.
 

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G-Man

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Sample order on the way though, that's exciting. You'll feel better after you start selling! (sales fixes everything. Best drug ever lol)

I was up until midnight last night finding someone that could get me a sample of yet another product. In a week or so, I'll either have the beginning of a product line to take to Amazon, then branded e-commerce.... or about $600 worth of junk that no one wants to buy. Time will tell.

One thing I can guarantee. No matter what the outcome, Mrs. G-man will likely have a strong reaction. :rofl:
 
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amp0193

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I was up until midnight last finding someone that could get me a sample of yet another product. In a week or so, I'll either have the beginning of a product line to take to Amazon, then branded e-commerce.... or about $600 worth of junk that no one wants to buy. Time will tell.

One thing I can guarantee. No matter what the outcome, Mrs. G-man will likely have a strong reaction. :rofl:

The great thing about product businesses, is that assuming it's not defective, you can always dump your product at cost and recoup your investment.
 

Scot

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Sorry to hear that man, but it give a lot of credit to your finance abilities to keep the company going that long.

I still think you have a lot of knowledge in the industry that is valuable, so don’t forget about it. There are always info products or consulting.

I’m excited to see what you do with amazon though!
 

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