It’s a word that makes most contractors squeamish
Because statistically speaking, contractors are more apt to go out of business than they are to build a company that sustains itself for many years to come.
There are myriad reasons for why this is, but there is also hope for contractors who today have already gone under.
And that hope comes in the form of Randy Brothers, owner of Elite Roofing in Denver, Colorado.
Brothers himself was once a victim of bankruptcy, and circumstance.
Yet to understand why Brothers fell into financial doom, we have to go back in time.
My original vision, my big goal in life, was to be a custom home builder,
After college, Brothers jumped right into the construction industry, and perhaps surprisingly, success immediately came his way.
The first couple years went pretty well. We did custom basements, remodels, additions, whatever we could do to do custom work, and the first couple years were going pretty well.
But then Brothers, and the United States of America, were in for a change.
All of a sudden the market shifted, then the Great Recession happened,
The financial crisis could not have come at a worse time for Brothers. He was in debt, and he had already been trying to leverage that debt to get out of the red.
Worse, his customers relied primarily on bank loans, and during the slow economic times that lasted from 2007-2009, those loans were hard to come by.
My whole business model was built on people using home equity lines to pay for their basement finish, and at that time no banks were loaning for homes,
To make his situation even more difficult, back then Brothers was operating out of Weld County in northern Colorado, a place that had the highest foreclosure rate in the country.
Staring down the barrel of $300,000 worth of debt, Brothers had a decision to make.
I looked at it from a perspective of I can either start fresh, hit the reset button, and learn my lesson, or I could spend the next five years trying to get out of this mess.
Ultimately, Brothers decided to declare bankruptcy, a choice that would stain his immediate reputation in the construction industry, but would also grant him the freedom to begin anew with a dearth of knowledge he had accumulated over the years.
Fortunately, that decision paid off in a big way.
I’ve recovered tremendously,
reveals Brothers, also sharing that these days his company has no debt and that he can pay all his bills every month.
There are some people in similar positions to the one Brothers once occupied, and for them, he has a few words of advice:
Bank loans are not your friend,
If you’re borrowing money to pay expenses, you’re setting yourself up to compound that problem. If you’re borrowing money to invest and grow a company with a very strategic plan, then explore borrowing and taking on equity partners. But if you’re borrowing money to get yourself out of a hole, you’re just going to dig that hole deeper.
Want to learn more about Randy Brothers?
Check out The Roofing Academy, Brothers’ unique educational course that has made contractors all around the country turn their struggling businesses into success stories!