Bad News from ESPO

[Big_John]

Getting into business? No bank will fund any business where the loan applicant has little to no experiences in said business, usually. So that mans that the existing employees of that legacy machine shop could be well-positioned to take over the business and hopefully keep it going.

That's somewhat true, but my experiences were that most of the banks wanted tangible assets to secure a good portion of the loan. That part was tough to get around until we found a small bank where the branch manager was willing to work with us. We also used the equity "line of credit" in my own house and my other partner got a loan from his family. My third partner's credit was hosed with no cash in the bank, so that was another problem, but we worked that out. The bank manager used our success as part of his "portfolio" to further his own career and when he changed banks, we followed him. We also found that the city of Syracuse was willing to make a small loan to us, provided we took some business course they offered at night. It was an excellent course too.

It's tough though... 25 years ago. I can't imagine trying to do that now.

That was starting from scratch. With an established business, it could be a lot easier. We bought another company and took on a fourth partner that had run the place in the past. That was the deal of a lifetime and we happened to be in the right spot at the right time. Financing was basically working out a payment plan with the old owner and then we did get another loan through the city of Utica for improvements.

When I retired, I thought about buying a business from a vendor we used. It would be calibrating and repairing Rockwell hardness testers. I really thought hard (pun intended) about it.... Maybe bringing my sons into it eventually. That would also have been owner financed, and there was some sort of franchise arrangement with a national company to use their name and materials. That part was really cool... I never quite got all the details on the franchise and since the guy I would buying the business from was a son in-law or something like that, the deal might have been different.

Point being, once you get into one business, the opportunities can be there if you're willing to take another risk you can get into another. Owner financing comes into the picture because you've established yourself in the business. I also have seen it happen more than once with a trusted employee. My youngest son did that with the last pizza shop he owned.

I decided not to as I was burnt out physically and mentally. That was 10 years ago and I was 61 at the time. I could get through the mental easy enough... But the physical stuff wasn't going away and was getting worse and I wasn't getting any younger.

 

[1970FuryConv]

You are hitting the nail on the head with that. Before I retired (10 years ago next month) I talked to a lot of people in manufacturing and the biggest issue was getting good employees. I can't imagine it has gotten any better since then.


I would think it would, but there's a lot of roadblocks to new business these days. Buying existing businesses takes capital that many younger people don't have and banks are more reluctant to finance. Starting from scratch is hard to do (been there, done that) and from talking to the owner of the shop I use, the profit margin isn't high enough to make it inviting. It's not an easy business either. It's a lot of hard work.

You may see some larger businesses take over, but the days of the "Mom and Pop" shops with personal service and quality are going away.

Lewis, My machinist is 72. this is a story of downsized but not gone.

He moved his machine shop to Hopewell, Virginia, mid 1970’s. Hopewell started charging personal property tax on machinery. Example: Cost $86000 for crank grinder. Hopewell Tax Rate: The 2024 tax rate for machinery and tools is $3.10 per $100 of assessed value. The assessed value is calculated at 25% of the original capitalized cost. So $666.50 annual tax on that one piece of machinery. Overall taxes on all the machinery in his shop was thousands of dollars. Nearby counties, Charles City and Prince George County, do not charge personal property tax on machinery. He faced moving, but wanted to stay in Hopewell. He had 5 employees.

He was doing well, despite the tax expenses. He bought an old Chrysler Plymouth dealer building in Hopewell: 6000 square feet. With all the machinery and real estate taxes, the city didn't fix the sewers. He came to work and found 3 inches rain water across floor one day.

In 2003: He had enough. Moved to his home workshop on the land where he lives in Charles City County. Again, the government got involved. He could not employ the 5 employees in the workshop at his home because they were not family members. Now, one of them, Eric, has own business. The rest, who knows.

Thus, thanks in large part to the government, he has gone from a 6 man shop to a 1 man shop. In addition, the town of Hopewell lost all the tax revenue from his business.

Don't you love politicians?

 

[fury fan]

Politicians seem to only look at what they change and the 'desired results' from that change, and never consider that what they meddle with is a system, and that systems will react and respond. Often in the opposite direction...

 

[garyh]

I have Espo springs on my cars. I remember talking to them at Chry@ Carlisle many years ago ,They had a paper catalog also.

 

[CBODY67]

Politicians seem to only look at what they change and the 'desired results' from that change, and never consider that what they meddle with is a system, and that systems will react and respond. Often in the opposite direction...

AND . . . if they feel they can get more "tax base", it gets worse. THEN come in the "developers" and things get even worse.

 

[Gerald Morris]

You are hitting the nail on the head with that. Before I retired (10 years ago next month) I talked to a lot of people in manufacturing and the biggest issue was getting good employees. I can't imagine it has gotten any better since then.


I would think it would, but there's a lot of roadblocks to new business these days. Buying existing businesses takes capital that many younger people don't have and banks are more reluctant to finance. Starting from scratch is hard to do (been there, done that) and from talking to the owner of the shop I use, the profit margin isn't high enough to make it inviting. It's not an easy business either. It's a lot of hard work.

You may see some larger businesses take over, but the days of the "Mom and Pop" shops with personal service and quality are going away.

The "law" of supply and demand isn't a physical law, but merely the way market minds work. The fact is, the Ruling Pigs want most of the populace on their feet, and nothing more mobile. Wipe your arse with "The Wealth of Nations." What REALLY motivates the Power Pigs runs lower than mere money, though that often is one of their sick fetishes.

 

[david hill]

As an alternative I have used St Louis Spring Co. as a source for replacement leaf springs. Good people to work with. Can usually supply your spring and spring hardware needs. Have a pair on my Hurst 300 w/ no problems. St. Louis Spring Co. 3126 Samuel Shepard Dr. St. Louis MO 63103 (314) 533-2132

 

[mgm1986]

That is a shame. I bought my leaf springs from ESPO and picked them up. Pick up is at their house and Laura and her husband were there to greet me even though it was late evening in the rain. I would say the comment about their age might be the biggest factor here. Sad there isn't someone that could start taking over the business. The quality of parts was top notch and the springs made my 300 drive like new (or what I would guess was like new)!