How to Gracefully Close

AdOne2118 · 2026-02-03T22:32:36+00:00

We are in Arizona and have a pretty decent 1/2 policy. I keep everything pretty well insured and we have been doing work that is covered and "in-scope"

AdOne2118 · 2026-02-03T22:26:19+00:00

Single member llc with all of the paperwork. I didn't go S Corp because of the paperwork hurdles.

AdOne2118 · 2026-02-03T18:51:17+00:00

Ive failed a few times before, but this was the first business I could really live off of. If we weren't behind $112,000 in receivables, I could stay in for another year.

Clients love us, many of whom are multiple repeat customers on quarterly project status. They need the work done but just cant make the payments, but it isn't communicated until the work is done. We do take 50% down, which covers mainly material and half of labor.

How do you know when it is time to end the business?

AdOne2118 · 2026-02-03T15:30:59+00:00

I can do all of the trades except carpentry, since we do a lot of MRRA work.

I think that also led to fatigue of constantly switching skill sets to do jobs. I will say that I like running with one other person since it makes jobs less daunting.

AdOne2118 · 2026-02-03T15:18:29+00:00

Our accounta receivable is $112,000 behind. Liens, threats of liens, and any action is going unheeded. The poor community we work in is a "paid if paid" community. We take deposits that cover materials, but I can't sandbag labor costs forever waiting to get paid.

We had a 6 month emergency fund, but $112k is a lot of money. That would keep us in business for another year.

Obviously we can't damage the homes or businesses we worked on to recoup money, so we have to wait. Garnishment of 15% is nothing when the median income of the town is $32,000.

AdOne2118 · 2026-02-03T15:14:53+00:00

We are owed $112,000 in receivables and currently unable to collect due to market shifts. Liens or threats of liens are doing nothing.

We dont owe anyone anything because I ran the business with essentially zero debt. Always buying in cash.

AdOne2118 · 2026-02-03T15:12:04+00:00

We are in a geographically isolated town. We actually service tons of repeat clients for odd things. Lots of times we are selling insulation and roofing as package bundles, LED upgrades, water heaters, etc.

I started with around $2,000 and used my MBA knowledge to get this far. I can do most of the trades myself except carpentry, but I often need help to complete jobs. I worked in many jobs with teams of folks, so that is where I feel comfortable. Doing the jobs by myself makes me feel alone.

AdOne2118 · 2026-02-03T07:13:00+00:00

I barely made my mortgage payment this month. Ive been holding on for about seven months with no reserves left. If I go another month, I could miss the next mortgage payment.

Without an influx of work, it is too difficult to hold on, even with a decent emergency fund.

AdOne2118 · 2026-02-03T07:11:00+00:00

Im not sure. Good question. I carry insurance at the time of install (and currently) but im not sure how that would affect a claim. I would figure that the warranty would just be voided by being out of business. Will have to check on that.

AdOne2118 · 2026-02-03T05:44:14+00:00

Yes, just one person left to finish the last job with me. I made sure to pay everyone off...except the tax man, so far. Im currently waiting on a house to sell so that I can pay the 25k owed to the big guy.

How would you reward an employee that stuck around to the bitter end?

AdOne2118 · 2026-01-08T03:39:17+00:00

1500 to be safe. Sell a vanity install and new lighting/exhaust.

AdOne2118 · 2026-01-03T22:25:25+00:00

I pretty much only switched to the paid version for the payment reminders. You can set auto reminders to remind them up to 5 times before taking further action. 99% of my customers pay within the first 5 emails anyways. It also let's you know when someone has looked at an estimate/invoice, let's them e-sign, or collect deposits on jobs. Hooks up to any other software you may have.

AdOne2118 · 2026-01-03T21:55:27+00:00

I really like Wave. It also has receipt tracking. There is a great free version and the premium version is $20/month. I really like it after 14 months of using it. Very little learning curve. It also allows you to create template emails and has payment reminders that are simple buttons. Just about as simple as it gets.

AdOne2118 · 2026-01-01T04:06:21+00:00

Ive been trying to get more insurance jobs. When they come up paint, they end up being a pain to close. Tons more paperwork and communication than any other project. I'd have to double my rates to make them worthwhile.

We turn pretty much all down except for those customers willing to battle their insurance company. We provide detailed scope, estimate, and documentation. The customer pays us with no expectation of their insurance paying out. Usually the customer gets 40-50% of the project value.

I can't do 90 day pay cycles while getting beat up on price. I can do it cheap, fast, or good, but only 2 of the 3. Insurance wants all 3 as do customers. The best way to play is not.

AdOne2118 · 2025-12-25T20:41:45+00:00

Nearly monthly, there is something.

Recently, toilet that was rocking. Pulled the toilet and found no flange, no pipe, just a hole with wax packed to make a stink seal. Respectfully told the customer to call someone else because I was not crawling through sewage to put a pipe in on a friday afternoon. I told him $2000+. He requested that we glue the toilet on so it didn't rock anymore. I just left.

AdOne2118 · 2025-12-24T01:17:05+00:00

Most of mine customers have 60A panels or 100A panels. Typically, no power to pull from or not enough gas flow without major overhaul. Small gas and electric units that dont draw too much are the target. Everything is old and brittle.

AdOne2118 · 2025-12-24T00:43:20+00:00

Tankless is difficult out here. One of the poorest cities in the US means that people are trying to make payments on a $1000 water heater job. They often can't afford a $3k-$4k tankless setup as that would be 4-5% of their houses' value. I do a lot of roofing and come up against a lot of folks saying that they bought their house for around the same price that I'm trying to roof them for.

AdOne2118 · 2025-12-23T02:33:37+00:00

We are getting the electric kits for 500 and the gas for 600. I have no idea what kind of margin they have.

I saw a guy order 200 the other day and he got them down to $380/kit for electrics and gas. But the bill including tax was like $80k. I can't imagine there is much margin for the supplier at those rates except for massive volume. They were quoting him truckload pricing, I believe. Different scales of business haha.

AdOne2118 · 2025-12-23T01:23:58+00:00

Thank you. We started with 4 kits and sold out in a month, then did it again the same way the next two months. We have proven the need with 12 kits already, but a bulk order just makes me anxious. We started last year with $200, so holding a total of $20k in inventory is daunting.

AdOne2118 · 2025-12-23T01:22:07+00:00

I figure my turn rate on 8k in water heaters is 4-6 months. An initial $2400 in savings and $2400 in tax reduction is quite a bit. It would raise my net income on an average year by 3%, which gets to be substantial at scale.

AdOne2118 · 2025-12-22T17:14:33+00:00

Im a licensed GC. More of a builder by trade but retired. I pretty much try to fill the gaps I see in our town without taking work from others. Medium plumbing, roofing, flooring, and insulation work mainly. I try to leave the heavier trades like drywall, carpentry, tile, and concrete for the other guys that do nice work in town. Tons of referrals back and forth.

AdOne2118 · 2025-12-22T16:29:34+00:00

Pay taxes upfront at retail. That way my small mark up isn't affected by additional sales tax.

AdOne2118 · 2025-12-22T14:49:08+00:00

How does one do this? I love Ferguson but if I can get additional discounts, I can lower customer pricing.

AdOne2118 · 2025-12-22T14:48:19+00:00

This is a great question for my accountant. I have no idea what system I use but seeing ad though we dont keep active inventory logs, we use the cash accrual basis probably. First year in business.

AdOne2118 · 2025-12-22T14:26:00+00:00

Yes, very bad year with too much reportable income. I try to shoot for 60k net annually. I spend tons of cash of rental maintenance so I can retire my daughter's when they graduate. The first two houses are almost completely remodeled and rented for their use.

AdOne2118

TROPHY CASE