Bob Harrell

What's not to learn from hindsight…

Before starting my network marketing business, I was a “spec” home builder. In fact I still am a home builder but don’t feel much like building any time soon. This recession has sucked the life out of the entire building industry. Even building “custom” homes right now is not any fun. Potential clients feel that they should be able to get a deal on pricing because there are so many houses on the market due to foreclosures. It doesn’t work that way. It’s not my fault the banks loaned money to people who had no way of ever paying off the note.

Anyway in my humble opinion I tried to be a very respectable home builder. I didn’t cut corners to make more money and always put more into my houses than I new I would ever get back. They were beautiful, with all kinds of extra features, and the latest and best upgrades. They were shrines. The floors were either Oak or Tile. The cabinetry was solid Hardwood, usually Maple or Cherry. The counter tops were granite or cultured marble. Nice stuff everywhere. The house on the left was built in a neighborhood of older homes with prices that ranged from $60,000 to some that were worth a Million Dollars. Mine sold for about a quarter of that. So… what went wrong?

Well I built them the way I wanted to build them… not necessarily how the customer wanted them. I was too stupid to do some market research and find out what people wanted to buy and at what price range. So I built houses that were too big and too expensive for the average person’s ability to afford them.I loaded them with upgrades which drove the prices up even more. Over many years I have been exposed to all types of customers. The number one thing I can accredit my stupidity to was to misunderstanding my customer's needs and failing to serve them.

Now I have a couple of houses that are still on the market after several years. As we are still deep into this recession, they are now under water. That means I owe more money to the bank for the construction loan than the price I can get for them. Not to mention the twenty percent of my money that’s already gone and the carrying charges for interest payments for over two years. Foreclosures on other builders in the same neighborhoods have brought down the “comp” prices that homes are selling for. Not just on mine, but on everyone else who lives near by? So pay attention to your target market. Help your customers get what they want, and don’t get dumb like I did.

I don’t care what occupation you are in, you are in business to fulfill a need. A need created by a customer. If you don’t deliver exactly what that customer is looking for, guess what? They will go else where.

Looking Back – (“Hindsight” is a wonderful tool) –

I had a successful Lumber Brokerage business before I became a Home builder. I’ve sort of been and entrepreneur all my life cause I never really liked working for someone else. The term lumber broker really doesn’t apply because I didn’t sell “lumber”. I just don’t know what else you would call it – maybe a manufacturer’s representative would better describe the type of business I ran. I “represented” all types of wood working companies throughout the eastern half of the states. They made the type of products that other manufacturing companies didn’t want to make or didn’t have time to make for themselves.

I sold these wood components primarily to furniture manufacturers and kitchen cabinet manufacturers. All kinds of “parts” are needed to build furniture and cabinets. These were either fully machined parts that were ready to assemble, such as table legs, drawer fronts, sofa legs, etc. Or they were semi-machined parts that would require some additional machining before they were ready to be added to the cabinet, hutch or sofa. I also sold rough blanks - pieces of glued up wood that would be used to make bedposts, or chair legs, or dresser tops. Anyway I sold lots of parts to big manufacturing plants located mainly on the East Coast.

Since I didn’t make any of these parts myself I did not have any inventory, or employees or a warehouse. I worked out of my house. All I really needed was a phone, a Fax machine and a car to visit both my suppliers and my customers. I was an entrepreneur and life was good. I could work when I felt like it, come and go as I pleased, and made a pretty nice living at the same time.

My customer base was fairly large, so I felt “secure” with my business. You may recognize some of my customers because branding was and still is strong gin the furniture and cabinet business. I sold to Broyhill, Bassett, Henredon, Century, Universal, Athens, Jim Bishop Cabinets, Baker, Pulaski, and many more. Broyhill and Bassett for example each had over 50 different manufacturing plants scattered throughout the states. Almost all had multiple manufacturing facilities. Bassett Chair plant for example made about 2000 chairs per day during there hey-day.

If you were selling turning squares, which I did, they would need four squares for each chair they made. The squares were machined into chair legs for a dining room chair for example. So that’s 8000 squares that they would need, and that was just for Monday. They would need more for the rest of the days of the week. And that was just one manufacturing plant.

What Happened?

Well like so many other industries in America, one of them, Universal Furniture, decided to see if they could have these “parts” or components that they were buying, be made overseas – mainly China. So first they started importing, let’s say, chair legs as an example. They began bringing in not just the squares to make chair legs out of, but instead turned, carved, ready to assemble chair legs. They imported them by the container load.

Then, some brilliant CEO thought that why not have all the parts required to make a dining room chair be made in China. Ship them here and then they, meaning Universal Furniture, would assemble and finish them, and pack and ship them to furniture stores throughout America.

It turned out that they could do that cheaper than they could make or buy the parts here in this country. Then they went over to China and opened a chair manufacturing plant in China to make, assemble, finish and pack these chairs. Guess what? The quality was no good but they were just so much cheaper over there. The Chinese people were making about a dollar a day or less, and the CEO’s would pocket just pocket the profits and make tons of money for their respective shareholders.

Then Universal closed their chair manufacturing plant in Marion, North Carolina and sent all that production, and the jobs, to the plant that they had opened in China. As other domestic manufacturers caught on to what they were doing, one by one they started doing the same thing. Their chairs started to be made in China. Then their tables, dressers, beds, sofas, everything…

Bassett Furniture, which had 52 manufacturing plants in the states, did the same. So Did Broyhill, Henredon, etc, etc, etc. Today, Bassett Furniture as an example has not a single manufacturing plant left here in America. It has its headquarters still in Bassett, Virginia but they do not make anything here in this country. All those jobs are gone, probably forever.
Each of their plants probably had 500-600 employees, some many more.

Now What?

Well with all this production moving offshore (remember Ross Perot saying something about a giant “sucking Sound”) guess who has no customers left to sell to. That is not true. I still have some customers, but where they used to buy thousands of parts from me, they now buy 50. Usually just to keep parts on hand if needed for repairs until their next shipment comes in.

Don’t accuse me of feeling sorry for myself, as I am not. This is what happened to all of out industry. Textiles, steel, clothing, shoes, light fixtures, even light bulbs. Ever heard of General Electric Company? They have been making light bulbs here in the states for ever since Thomas Edison Invented them. Due to some stupid legislation that has been passed by the brilliant people we sent to Congress, incandescent light bulbs are being outlawed starting in 2011, and we will be required to buy those curly neon looking bulbs instead. Screw the fact that these new curly looking bulbs might save energy, they are so hazardous that you are not supposed to throw them away because they contaminate our landfills. Same goes for the batteries that power the new generation of cars. But I digress. Where do you think these new bulbs will be manufactured? If you guessed China, you are correct! Maybe they will be making our bullets next!

I may be old but I’m not dead yet and I’m not ready to retire. I feel that I still have something to contribute to society. Starting what seems like my fifth or sixth career change since I got out of college, I am now fascinated with internet marketing. If you want to look back at my entire career, even back to where I was born (Ethiopia – not Kenya – Ethiopia) check out my Sqidoo profile. I have had an interesting life!

Anyway, about a year and a half ago I was surfing the internet looking for job opportunities and franchises, anything that I could do to make a living. What I found was this incredible company that teaches financial education. Most people are really financially illiterate. They don't know anything about money, where to invest it, how to get rid of debt, etc. Well this company not only gives you an education about money, taxes, investment strategies, but they also teach about health and nutrition, and and overall wellness.

This company has an educational model that attempts to bridge the gap between what you weren't taught in school and what you need to know to be a success, even in the most trying economic conditions. Afterall financial eduction = financial freedom. To learn more check out my website.