229: The Journey of Buying a Business

Michele 00:01

Hello, my name is Michele, and you're listening to Profit is a Choice. With us, on the podcast, today is Julie Murphy. Julie's the owner of Designer Draperies of Boston, and she began her workroom as a home-based workroom in 2006. And then in 2014, bought the company and merged them.

And so, on the podcast today, we're going to talk about how she's been able to triple the business in size and revenue over these last few years. And we're also going to follow along with her journey, the highs, and the lows of buying and selling a company. And so, I invite you to enjoy the podcast.

Every day, empowered entrepreneurs are taking ownership of their company financial health and enjoying the rewards of reduced stress and more creativity. With my background as a financial software developer, owner of multiple businesses in the interior design, industry, educator, and speaker, I coach women in the interior design industry to increase their profits, regain ownership of their bottom line, and to have fun again in their business.

Welcome to Profit is a Choice. Hey, Julie, welcome to the podcast.

Julie Murphy

01:17

Hi Michele, I'm so happy to be here.

Michele 01:20

I'm excited to talk to you. I was trying to remember how long ago we met. I want to say it was around 2010-2012. Because it was when I still was working for CHF Academy and going around teaching the pricing classes and speaking at the WCA events. Do you remember when?

Julie Murphy

01:43

I want to say you are pretty accurate. I officially started the business in 2006. But didn't know this world probably for two to three years after that. And then probably didn't have the courage to attend an event until about 2010. So that sounds probably right.

Michele 02:02

I just remember it being somewhere in that 2010-2012 timeframe. The closest time that I remember having a conversation with you was at Liz's house. Liz is a workroom owner and she had opened up her home and invited tons of window treatment owners into her home. And I went in and taught the pricing without emotion course. And I remember sitting around the dining room table having big conversations about business and that was what I remember.

That was where I remember thinking she's a smart cookie. I'm curious if we both remember that. You had kids at home and kids in school, so you still had a very active home at that point. Your kids are a little older, like mine are now, in college and out of college. But do you think at that point in time, let's say it was 2010-2012? Do you think you would have envisioned the business you have today?

Julie Murphy

03:11

No, definitely not. To just give you a little background, I had been an occupational therapist for about 10 years before I officially started my home-based workroom, because I didn't even know that existed. And you're right about my children's age. My youngest when I started in 2006 was one. And so fast forward to when I purchased designer draperies of Boston in 2014. The catalyst was my home. There was too much work. We had done a little bit of an expansion, I couldn't fit in it. And I was just looking to expand the space. Never envisioning staff or any of that. So no, the answer to that question is no.

Michele 04:00

So, let's go back to the beginning for a minute because I think one of the conversations we're going to have today is, what does it look like to start your own business and then purchase a business, acquire a business, merge your ideas with somebody else's ideas that are already kind of in play, right with team members? And then how do you mesh, all of that, to synthesize it, to be able to move forward with something that's even new and better and different than either of the individual pieces and parts? But to do that fairly?

I would love to go back, and you tell us a little bit about when you started your workroom, who you served, and what you did, so that we can understand. I understand you were outgrowing your space and I think no matter how much space, most of us outgrow our spaces. Parkinson's Law, we expand to contract to the space we have. Tell us what the business was like when you started it and the trajectory of getting to the point that you knew, like you said, I've got to move out, it's too big.

Julie Murphy

05:03

It started like many in one room in my home, and then put it in a different room in my home, as it got a little bit bigger. And then we renovated our basement. So, I had probably triple the space that I was currently working in. Like yourself and many others, friends and neighbors were the clientele that I had had. And then a friend of mine opened a yarn shop called the stitch house. And she also had a sewing educational component and asked if I'd be willing to teach basic Roman shade and fabrication in the evenings. And I said, oh, I'd love to do that. Once I started to do that, oddly enough, they had an interior designer call looking to have someone turn a king-sized duvet into a queen-size throw. And they gave her my number. And that was when I started working for an interior designer. And I said, oh, I like this, because it's so time-consuming with the fabric selection and the design. And although I loved those components at the time, I liked the fabrication part better.

She told the designer, and then she had some interns and they laughed, and they worked for somebody else. So that's really how the design business grew. I didn't become just strictly to the trade until I purchased design draperies in 2014. But it started, like I said, with friends and family. Then I got into the interior designers and that quickly catapulted to a following. That's what generated the moving downstairs to the basement.

I hired one person three days a week to help me with cutting and with the things that make two-handed items move faster. And then it just became evident that the work was still growing. And it wasn't enough space for two people to work in, functionally from my point of view. I started to look for space, to get out of my house. My youngest was eight by now. And it just felt like a good time that I could do that. That's kind of how that all came about.

Michele 07:25

It's funny, I remember starting my business. I started in the sitting room of our master bedroom. And I'll never forget my husband saying, Michele, I don't think that you're still sewing in our bedroom. I think we're sleeping in your workroom. And I was like, yeah, it kind of does, it takes over everything. I was at that point still in the floor making drapery panels and laying things out. Because I did not have room, I did not have this big table. And I just remember him like Michele, we're having to move these things off our bed so that we can go to bed at night. I'm afraid to get up in the middle of the night and I don't know where to step. I'm going to step on a needle or something. We did the same thing, we built out our basement and I moved down there and then I started taking over one room and taking over the next one because it just expands you've got your finished goods and the work in progress.

We are always in search of more space. Because here's the thing I want workrooms to know, but I would love for designers to hear and see this on their side too because of how it impacts them. When you're making things with your hands even when there is technology involved, I know you've got some new fun gadgets in the workroom, but even when we have cutters and even when we have light inspection machines, vertical tablers, and all the big pieces of machinery there's still manual labor that goes into what you do. And you can only do so much so fast. I was all about the timing, and I could remember timing one hand-sewn side hem of a panel because the designers that I worked with used mohair and velvet, and linen. And running those things through machines could cause distortion, or it took me longer to fix the machine to be able to handle each individual thing. So, they just asked for a lot of hand-handling. And that was fine, I did it. And I could do a 96-inch panel in 12 minutes. Like I knew what it took me now that's with my head down, and just getting into the rhythm. But that meant that I couldn't do anything else for those 12 minutes. And if it was a blackout liner is going to take longer, it just took what it took, I couldn't speed that up, I couldn't make it any faster. I had already gotten as fast as I could get, and I'd already pre-threaded all the needles.

I had set up to be as efficient as I could be, but time still had to be taken. When you have a space that you're outgrowing, and you've already maximized your efficiencies in your processes, you really don't have an option other than to get a bigger space. And to be able to bring in more people to get more done. The same holds true for upholstery, or push-out due dates, and it takes longer to produce a product. That's really all you can do and I'm assuming that's kind of exactly where you got to correct.

Julie Murphy

11:33

And with that, I'd say too that when I purchased the business, I didn't necessarily expect it to grow the weight the way that it did. It wasn't like I was out pounding the pavement and advertising at that point and trying to bring in new designers it just kind of organically grow. And there are a lot of decisions that need to be made. Either you're going to turn away business, which you know, nobody wants.

Nobody wants to do it as a small business owner, especially with the type of business that we do. When you're working for the trade, you're at the mercy of the ebb and flow of the project. You know, from construction to when we get in, it could be a year or a year and a half. So, it forces the hand to make some decisions. It's funny when you're talking about the hand-sewing of a panel. You know, I used to hand sew everything because I didn't have a blind hemmer. And I would save that to do in the living room with my family at the end of the day so that I could spend time with them.

Because there weren't enough hours in the day. And it's not the most efficient way, the most efficient way is having enough flat on a table and doing it, but I made the decision. Okay, I'm going to save all my side hands, so that I can sit in front of the TV with the kids, you know, for an hour and a half at the end of the day to do it. So just decisions like that.

Michele 12:56

That brings back a memory for me. I had not thought about this in years. But I had a drafting chair, so that I could have it low to have at my sewing machine, but I could pull it out and raise it all the way up to sit at my table, so I didn't have to stand. Because I've got concrete floors and my back would be killing me. It didn't matter how much cushion I had on the floor; you can only stand on that concrete in one space for so long. And I would turn it on. I wish we had had podcasts back then we didn't podcast back then. I had a TV with the VHS right, you put your VHS in there. And I would watch Runaway Bride, some Julia Roberts, or something silly while I'm sewing, But what I brought upstairs to sew in my lap was hand trim on pillows, because back then we trimmed everything in the 90s. Or in the 2000s we were trimming the world if you sat still, we were going to trim you. And I don't mean why I mean, multiple intricate trims. And so, I'm sitting because that was something that I felt like I could hold in my lap. Right? But yeah, gosh, I had totally forgotten about that. But you know, you get to the point where you're like, if we're going to even make the money we need to make, we have to get out of here.

Especially when you're confined to one or two rooms. You can't churn work out fast enough and you can't do the level of work that we want to do. There's a different level of a panel now that you make than probably the one you made in your lab, even if it was beautiful and wonderful. You're just working with a different end goal in mind. And the end goal and is to turn out a beautiful product, to have a business that can be efficient, that can show up when we tell the designer the work is going to be ready. And then to make money and pay your people. Well. I mean, I know that's ultimately the goal for everybody, well, most everybody that's in business.

All my listeners, that's their goal, to do it well and to do it right and to do it with integrity. So, you got to the point that you're like alright got it. Get out. I think you said a minute ago, you started your hunt by just looking for a place to go. That was the first idea, right is not let me go run out and buy this huge business. But oh, let me go find space.

Julie Murphy

15:12

Yes, my husband and I started looking locally for some commercial space. And not really knowing you know anything about it, anything about the pricing, or anything about what kind of square footage you need? And at the same time, the one employee that I had was approached by somebody in her community, just asking her what she was doing. She shared that she was working for somebody that owned a drapery workroom, he said, Do I have an opportunity for you? Because one of his clients had a workroom, less than two miles from where I live, and she was preparing to retire and was looking to sell the business. So, she said, “Not interested. But I have somebody that might be”. And so that was August of 2013. She came back and told me and got Judy's name and number. I reached out to her immediately, and we started the conversation then. So, it went from purchasing property to expanding my own business. And then it went to the exploration of or am I going to purchase a business that's already established, that's in rented space. Lots of back and forth of what was a good fit.

Michele 16:33

That's a lot of different variables, right? You're talking about the purchase of a building, and of course, the land that it's on, and then building it out, right with your one at that time with your one employee, I'm assuming. Or over here, we're not going to own unnecessarily the building and the land, where we're going to own everything that's inside of it. And it's already set up and outfitted. Oh, and by the way, you're going to get in a team. And oh, by the way, they're already designers that are coming in. So now, instead of more of a slow build and you're going to own the majority of it except for the building. But it's coming fast. And it's coming on day one. Yes. Basically. That's a lot to that is it's not an apple, apple, orange, orange. It is a different evaluation between those things. It really would think, Julie, that it must have made you stop and go, Okay, what is it that I really do want here? Is this just an investment? Or is this really a career that I'm building in this moment?

Julie Murphy

17:39

True. And when I think back to it, I feel like I didn't put a whole lot of thought into that. Judy had me come to the space after hours one day because obviously, she didn't want her staff to know what was happening. I walked in, and it just felt right. I could see myself there. I was excited by the space. I was excited by the projects that they had hanging up. I don't know, it just really felt right. And part of it too was I just kept saying to myself, how random, right? I mean, people aren't knocking down doors to purchase drapery workrooms. They're not. And I think that I don't know if anyone's done any research on this on how many businesses actually get sold, versus how many businesses closed their doors, and sell their assets, but it just felt right when I got into the space. And once I met Judy in person, I realized that I had met her one time before at a local WCA meeting, she had accompanied our Rowley's rep at our local chapter meeting. And I remember going up to her and introducing myself and saying my business, two miles from yours, but she just was not interested in any chit chat or, you know, but it was funny because as soon as I saw her, I remembered our interaction. And that was part of why I bought the business because Judy's personality was so different than mine. And we could talk about the logistical part of having the business evaluated and I was like, Okay, if I have if I'm going to keep everything that she's doing fabrication methods, head rails, everything quality of linings, and if I'm going to keep all of that, and I know what my personality is versus hers. It just seemed like Okay, I think there's potential for success here.

Michele 19:48

So, what was it like to have it valued and since that was probably number one, it wasn't what you were looking for. So, I love that it was two miles from your home and connection and that that also just goes to remind us, there are so many underground workrooms, I don't even know how to say it. Somebody asked me the other day how many workrooms are up in your area? And I'm like, I don't know all of them anymore. Because people just start workrooms. I mean, it's kind of like asking me how many designers there are, there are plenty of designers that aren't just all in a building, right? They are in their homes, and they are working out of personal spaces, but two miles from your home, that would have to get my attention. I would love to hear just a little bit about what the valuation process was since they say at the end of the day, the value is what both people can agree to. But what was that process like to get to the close? And how long did that take, from the time that you went in and did your first visit to the time that you guys agreed on the sale?

Julie Murphy

20:48

One year. I reached out to her in August of 2013. And I signed on the dotted line on August 1 of 2014. So yes, I didn't jump into it quickly. First off, Judy wasn't prepared to sell the business like she had been speaking with her lawyer about the potential of it. So, she hadn't done anything. You know, she didn't even really know what she wanted to sell it for. Let's put it that way. That piece of it took a little bit for her to be able to generate that. But what it looked like was I immediately reached out to my CPA, and said, what do we need in order to find out if a business is viable to buy or not? He wanted 10 years, if possible, of her books, and all of her books were pen and paper.

That process took a long time and couldn't generate reports as easily. He had to do a lot of calculations to see and, after he dredged through all of that, he said, this looks pretty good. Her cost of goods is low, her expenses are low compared to what she's bringing in. She had three full-time employees and herself, she was taking a salary for herself, which I wasn't doing. So I was thrilled at the concept of that being a possibility from not from maybe not from the get-go because I knew there'd be some buyout components to it. I wasn't really sure how we were going to go about it. So then after some time, it might have been two months or so, she came up with a price. And her price was based on her highest year of sales. Like that was the number that she was looking for. I don't I really don't know anything about that, and my CPA was very critical and with me through the whole process. He said that's really not what the business is worth. And now, I obviously know that. So we did a little bit of negotiating and came to a figure that my CPA, after crunching all the numbers and explaining to me what I was willing to listen to at that point, just wanted him to tell me the answer versus understanding at all. And he said I think we could offer this figure, let's see if she'll hold the note. I think you could put 20% down if she's willing to hold the note. And then you'd be able to pay her off in five years at such and such interest. I presented her with that. And she thought that was great. It was $250,000 less than her original offer.

But I had explained to her as my CPA had, and every year wasn't like that. She took her highest year she was like, I'm going to try to get the most that I can. But then when we rationally spoke through it, I gave her the reasons why, and I just reiterated the fact that there aren't people knocking down doors to buy drapery workrooms, as you know. And I think we were put into contact from some higher power, honestly. And I said think it's going to benefit you. I think it's going to benefit me. She loved that idea. The trouble came when we sat down for the first time with her lawyer. So, when our teams got together because her lawyer then really not understanding our industry and maybe not taking the time to understand our industry and the market was giving her poor advice and changed everything that she and I had agreed upon. And I walked away. I said, this isn't what we agreed upon. And Her lawyer said, well, just because the two of you agreed upon it didn't mean that that was going to be the terms and I said well, last time I checked, she was the owner of her own business. I just said I'm not agreeing to this and I left we left the meeting and said Judy, I'm sorry it didn't work out. She called me like three weeks later.

Michele 25:04

That had so hard for both of you. For both of you to get that far, and to have an agreement going into it, and then to get into it, and to find the agreement change. Look, I just want to pause for a minute and say this. Understanding the industry that you're in is so important, right? Not every industry is valued the same way, not every industry has growth years, and maybe backward years. It's just not the same. This is why we always talk about the importance of working with bookkeepers and accountants, and attorneys and people who are willing to know and understand the industry that you're in not just generalized information, or, you know, pricing a workroom versus pricing, a tech company, not even close. So, it's sad that she had professionals that didn't, perhaps understand the industry at the same level that could have been needed to make that a beneficial transaction, even if there were small tweaks. But it didn't have to be like a rewrite. And I just feel like both of you probably felt so defeated when you walked away that day.

Julie Murphy

26:21

Oh, for sure. And I'm hoping she had the conversation with her attorney before we sat down so she wasn't as blindsided as I was. And we were probably seven months in at this point. I just said to her, you're missing a great opportunity. I knew I said, I will go out and I might not buy someone else's business, but I am going to grow. I've made that decision. I'm going to go to a bigger space. And I just know that I will be successful. And you're missing an opportunity. You're turning 70. You want to retire. There aren't many workrooms that I'm aware of in this immediate area. I don't think she had it in her to explore and try to find people again. And so that was unfortunate. But I'm really happy that I had the wherewithal to stand up and leave because she called me three weeks later. She said things went fine until we got the men involved.

And I said, well, things went fine until we got your lawyer involved. And I just don't think that he had your best interests at heart or did enough exploration or investigation before he sat at this table to have a conversation. And I said, and that was detrimental to you. Because now my terms have changed. I'm not going to go back into the same agreement that we had. I offered $100,000 Less. I was just going to pay her cash. And he really robbed her of $100,000 plus collecting 7% interest over five years. But, that was the that's what I figured out from the time that she and I laughed, I went to explore different financing, just so I could leverage myself so that I knew, Okay, I can do this. If I tried to do this option B, can I do it financially? And so I figured out that I could with the help of my CPA and the understanding and partnership with my husband, if he wasn't behind me, I definitely couldn't have ventured into this. But realized, yes, let's do it.

And then I also thought it just might be nicer to not have her as a component for five years in it too. There was that piece of it. I was so excited about buying it that I kind of just wanted to do it. But then after I had this very sobering event happen, it made me think a little bit clearer. And okay, Julie, what are you really willing to do or want to do? Because I didn't think it was going to happen. It allowed me to think about what I really was willing to do or what was best for me. There was no desperation not that I was desperate, but you know what I mean, I was so excited about the potential. I may have been doing this agreement that might not have been the most financially sound down the road for me.

Michele 29:30

It makes me think of going in to buy a car, right? And you're so excited. And you can see yourself driving the car and you can see yourself sitting in it and so cute. And I've already figured out, you know where I'm going to put my purse and where my sunglasses are going to go, like I've already figured it out. And then you get down to the table and something doesn't work out and you have to walk away. Granted it's a different scope, but it's still that same feeling of you are losing a home that you're trying to purchase. You've already put yourself in the position of this is mine and I belong here. And now all of a sudden, you don't.

Julie Murphy

30:04

It was very upsetting. I mean, the number of hours that my CPA and I had gone through tearing this apart, looking into this, having all the equipment appraised and there was the emotional attachment I had already had. It was very, very difficult. I was so angry that day, at this, this gentleman or her lawyer, because I'm like, Who are you? Where have you been? Whatever. I made her that offer. I'm just sitting over here like,

Michele 30:43

I'm just cheering on the girl power.

Julie Murphy

30:47

She accepted it, we made an appointment to meet. Part of the agreement, before I signed on the dotted line, was that I was going to meet our staff. And the show at the time, three designers made up the bulk of our business, which isn't the best business model. But it was before I signed on the dotted line, I would meet the three employees and the three designers that made up just so they'd put a face to me. I just wanted to feel what the chemistry was like and to see if they were like it's beauty that we're invested in not Designer Draperies of Boston. So that component took a little bit of time. And it was very difficult with the staff, too. It was a mother and daughter, and then another woman. And what I didn't realize because they weren't forthcoming with me when we had our initial interview with them was that they had been interested in buying the business. And Judy had already gone through this exercise with them, with their attorney, and with her attorney. They didn't tell me that during this meeting. I don't know why, maybe they were afraid that I wasn't going to keep them or I don't know what their thought process was. But they didn't share any of that with me. So that's a topic for after we get through this piece of it. I met the designers. And it seemed they were happy for Judy, that she was moving on. And I said, you know, we're going to keep the same everything. I'm not changing anything right now. And they were happy.

So that all worked out. Then came to our appointment on August 1 to sign the papers. And her lawyer comes with an addendum to the agreement that Judy wasn't even aware of. The agreement was that I was going to pay her full-time for six months. For the first three months, she needed to come and work 40 hours a week, and for the next three months would be at my discretion, and how often I would have her on-site. But she would get paid her rate, her salary. This was the agreement she and I had; she would stay on for six months. I needed her, she had all these projects in process. I had no idea what was going on. None of her staff were behind the scenes, they just fabricated. So, I needed her to stay to get me through that. And that was great.

So, the addendum from her lawyer was that if I ever had to call her within that second three months or any time after that, I had to pay her $100 an hour with a minimum of three hours for me to just pick up the phone and call her. And I just looked at her and him and I said this isn't the Boston police union here. Like I don't know what you're talking about. And I just looked at Judy and said, Judy, this is it. Like I do not agree with this. We both reviewed our terms. The package was delivered to us two days ago, we reviewed it. We agreed to it. And now your lawyer is coming with an addendum. And it was just crazy. It was that he was feeling defeated because he didn't get the initial deal. And I just looked him straight in the eye and said, you are risking her getting this opportunity. Do you understand that? Because I will stand up again and walk away. Judy said, Charlie, tear up the addendum. Julie, I'm sorry. I knew nothing about it. And I said, okay, but it's just so funny.

Michele 34:51

One of the big things that I'm also hearing out of that, Julie, is that we have to have a voice when we own our company. We have to be able to know what we want, what we don't want, what we're willing to take, what we're not willing to take, and then stand up for it. Because I can imagine, granted, you're a strong woman, you're in Boston, and you've had to stand up for yourself more than once, that's a given. But there is something different about sitting down at those types of tables where you're trying to work it out like you're trying to make this work. And in those moments, being willing to say what you want and what you don't want. I know I've worked with a lot of women who have either bought buildings, they've gone out on their own, they've rented spaces, or they've had to go into those commercial negotiations. I've bought and sold a company myself and worked with others who've done that. And it is a lot of negotiation, but knowing how far you're willing to go is so important. So, it's so awesome to hear where you found your voice. And honestly, at the end where Judy found hers too to say that's enough, we're moving forward. Okay, so you buy it, you sign it on that day, and then you start moving in. What were some of the things that you noticed at the very beginning that worked well when you came in?

Julie Murphy

36:15

Their installations went really well because I did accompany Judy on some installations and measures before I purchased the business. Their installations ran well, but they did them all themselves, she would shut down the workroom and all of her staff left the workroom, and they would install. And by well, I just mean that the system that they had of who was laying things out, who was opening things, and all of that that went very smoothly. And Judy had a very engineering brain. The hardware was coming within an eighth of an inch of where it should have been. And it was always usually spot on. So, I knew that that was great. And I was excited to learn those skills from her within the three to six months that she was going to be staying. She was very hands-on in the workroom. And again, I think her volume at that time allowed her to do that. She always touched the fabric. She wrote all the work orders. But she always touched the fabric and the trims before she wrote them. At the time I was like, well, yes, I do that, but I wasn't writing any work orders. This whole work order world was a huge learning curve for me. Because everything was in my head, and I then needed to learn how to put it on paper to communicate to other individuals what I'm thinking. I'll be honest, nine years later, I still struggle with that sometimes, with the whole work order process. Judy put a date on the calendar and that's the install date. And Fannie, her manager who's still with me, never had to worry about whether it was going to be done or not. It was always done. So those were the things that worked well there.

Michele 38:03

I'm pretty sure you called me back during that time. And we talked a little bit high level about buying. I remember you making a comment to me somewhere over these years, because of course we've stayed in touch and run into each other at events, and I'm sure there were one or two things that needed to be adjusted quickly, but for the most part, your first thought was, this is running well. This is making money. This is paying the owner. I'm going to come in with a posture of learning during this time for a year or more. And really learn what is happening instead of coming in to make it Julie's way. And I want to tell you how awesome I thought that was and still think that that is. Number one, because I think it goes a long way with team members who are already there. You're not coming in saying I don't like this, or this is bad, or this is wrong. It gives you a chance to understand. It makes me think about that statement that says seek first to understand and then be understood. You didn't buy the business, from my recollection, and walk in to be understood. I am Julie and I own this company. And here's what we're doing. You walked in to say Hi, I'm Julie and part of the team helped me understand what you do and how you do it. Where are our areas for improvement and what are we doing really well here? Tell me about, in your mind, how it felt.

You already knew "I'm going to be learning from Fannie but also from Judy for these next few months". As you said Fannie is like a machine. She does beautiful, exquisite work. And then you've got Judy who's got these processes set up that you're admiring, and you need to understand. What was it like to come in and for how long did you try to take the I am here to understand and to learn before I start making bigger changes and certain small changes, but the bigger changes?

Julie Murphy

40:05

Sure, well, I just had the mindset of what am I buying? The risk was huge, right, the risk that the staff could leave, the risk that the designers could leave. I had a favorite restaurant in our neighborhood. And my husband, we could walk there, and we'd go there all the time. They sold it. The new owners changed everything. They came in, gave it a facelift, change the dishes, changed the menu, and it was terrible. And I thought to myself, why would you buy a thriving business with a steady clientele, and then change it? Because guess what, we don't go there anymore. Because what we liked and what drew people there changed. So, I had that in my brain. And when I bought it, first of all, I was kind of at the mercy of these people to be honest with you, because I didn't know their systems. And I wasn't in will never be as skilled of a seamstress as Fanny was or is, and I knew my let's say, I just knew my place.

However, I will say, I think I knew my place a little too long. And that became detrimental to employees that I had hired because I was letting things occur in the workroom that shouldn't have, because I was afraid of losing Fannie, to be honest with you. But I will say that I had the wherewithal to know that if I wanted to keep the designers, we needed to keep everything the same. I just didn't want to rock the boat. I wanted all the fabrication to stay. I wanted the employees to stay because I had told them that was my intention. And I think I just knew what needed to be done. And what's interesting is the employee that came with me, she was a business owner herself before she came to work for me, she owned a coffee shop and sold it, she didn't enjoy, I think, the different pace of it. And when she and I would be together, it'd be very social. And that wasn't the women that work at Designer Draperies. It was all about production. There wasn't a ton of chitchat. And then she and Fannie kind of rubbed each other the wrong way, let's say. And she came to me and said I can't work here anymore. She looked at me and said, you need Fannie, like you need her and I know that as a business owner, so no hard feelings. This just isn't the environment that I want to be in right now because I miss talking to you, I miss seeing you I miss all of that. And it's not what I signed up for.

Michele 42:50

Her restaurant changed. And that's okay and that happens. I was going to ask you how it was to integrate staff. Because that's a hard thing. It's difficult when you purchase, and then you come in to see things. I think it is really hard to come in and see things and not want to change some things quickly. And you can't understand it all at once. I know even when we came in at CHF, we couldn't change everything all at once. We didn't need to change everything all at once. We had to start looking at where is the business now. The same thing that we have to think of in our business. Where is the business now? Where are we trying to go? What's working to get us there? What's not working? And what's the most glaring or what's the biggest problem that we have? And usually, that's where we're going to focus. So I know that you probably sat back a little bit longer than maybe in retrospect you would like to do again. As you have gone through the process of owning your own small company, certainly a little bit more on the relaxed side, and then moving more into a production-driven company through that purchase, what would you say? If you had to do it over again, what would you do differently? Would you have still done what you did? Or what would you have done differently?

Julie Murphy

44:20

I think what I would have done, first of all, and we're still muddling through it is they didn't have any policies and procedures written down. So again, that's why I was at the mercy. There wasn't a binder that had this is how we fabricate this. This is how we fabricate that. I promised the designers we were going to keep the same fabrication methods. We are still working through getting all of those documented. So, I would have made that a priority at the beginning. Secondly, I had used QuickBooks in my old business, but Judy hadn't. So, I had to create QuickBooks in this new business, and I didn't take the time that I should have to set QuickBooks up correctly, with bundles and all. Then to play catch up on that, that's just been kind of a logistical nightmare as well. So those are the two main things that I wish I had done.

What I will say is that the business has tripled in size since I bought it. And as you can imagine, with that growth, I was really at the mercy of the staff that I had, because I was trying to keep up with the measuring and all the other things. I was checking all the fabric and I was writing all the work orders, doing all the estimates, going on all the measures, and not a whole lot of that's changed. But what has changed is now I have administrative help that I didn't have that before. I wished I had reached out to somebody, at some point, and waved my white flag, and said, I need help in figuring out how to deal with business growth. I want to say we probably had three levels of it.

After the second level, I reached out to a larger workroom in our area, a very successful one. And oddly enough, he's a man. And there are three other women-run workrooms at that level. And I just knew they wouldn't sit with me and talk to me. So, I chose Elliott. And he was very gracious. We went to lunch, we talked over things, and he introduced me to using an iPad because I had individual paper folders for every client. And he said it was a game-changer for him. And it was such a game-changer. Now I use an iPad and Good Notes and I have every designer and every designer's project in one location on site, I don't have to wait to get back. So just little things like that. But growth is difficult. If you don't have a firm foundation, and you go through this exponential growth, I felt like I was on a hamster wheel. You know, because you coach me, I'm still kind of feeling that way. Because the business is still growing, we had COVID, and it was like even busier than we'd ever been, but with its own limitations. So, I can't stress enough how having policies and procedures documented not only for the staff but for me, as the new owner. I was kind of in no man's land and at the mercy of these people because I had this business that I have loans for and I needed that to run smoothly. I turned a blind eye to things.

Michele 47:46

That's right, it makes me think of when you say these two things, I would call them policies, procedures, terms, conditions, and standard operating procedures. So, all of that is probably encompassed in what you're talking about. Because not only how do we make these particular items, but what is our standard for it to go out the door? How do we work with our clients? And then how do we manage time and people within the company, there are so many layers to that. And then you look at the process of money management, pen, and paper, whether it was for client measurements, or whether it was for Financials, it's only going to get you so far, and it was not going to support the work of the business that you had purchased. I mean, even your smaller business had been using QuickBooks. And then you move into a much larger business that was pen and paper.

I still talk to clients and people all the time that are using pen and paper and I get it or they're using Excel to run all of their financials. I get it. I did it too, for a couple of years, until I realized that as you said, I could not get reports. I could not see where I was, I couldn't understand the impact or the cash flow or any of those things, what was happening truly happening at a glance, even if I was keeping up with those details to hand off to my accountant in a year. They were not helping me manage the day-to-day of what I was doing. I mean, that's the whole reason that we've even built Metrique is to take all of that data and to be able to put it in one place to look at it because there is knowledge and power in looking at those things. I commend you, even if it was not organized the way that you would love it to be I just commend you for at least moving it from pen and paper into a technology-based system that can support you. I told a couple of clients yesterday, we were talking about growth, and I said you know, from what I've seen most businesses start off simply saying we're going to do ABC and XYZ. We might start it accidentally, we might start in our home, we might even start it in a space, but we start. And we don't really know who we are and what we're doing, we have an idea of what we want to do. But we don't really know who we are in it. Do you know what I mean? And so as we are doing the work, we're realizing this is what I like, this is what I don't like, this is what works for me, this is what doesn't work for me.

We then we go through this next level of evolution, where we start cutting out the things that don't work for us and focusing on the things to do, then we start scaling that, and it starts this bigger, bigger, bigger, bigger, but then the challenge becomes doing it and keeping the same level of product and service as we are expanding. And making sure that we're expanding with what we love, and that we didn't expand at level one when we don't even know who we are and what we're doing. And then we get into this refining process and even think about it with the business hierarchy of needs that have been defined in "Fix this Next", it starts with sales, and then profit, and then order. If you think about where you were, you have to focus on the sales to keep the business running. When you bought the business, the first thing you did was say we have to continue with sales and profitability. And when you can focus on those, then you can move up and focus on order. And once you focused on order, which is what you've been doing these last few years, and even continuing to do now, how do I take care of the people? How do I take care of the profits and the sales process and all the other things? Then we can start looking at the next two layers, which is where I know that you and I'll be moving in the next year to impact and legacy. How do we have an impact? And how do we go ahead and get Designer Draperies of Boston set up when it's your time to sell this? You have 10 years. You have the documentation. You know what to expect you've been on one side, and now you're going to be on the other side. How do we put your business in the best possible place? So that one blip year is actually four to five blip years. Then we can ask for the most that we want to ask for going into that. Is that kind of the way that you see it?

Julie Murphy