Also, let me know if you need help financing that AR :)

$270k a month of trim is absolutely insane. How certain are you that over $3mm of expense per year can be trimmed that easily without impacting production?

Also, you need to call in as a fake customer to “secret shop” the company. Do this several times. Ask as many questions as possible about the status of the company, how do you know you can trust them, ask if they are a “fly by night” sort of shop.

Many roofing companies are really only worth their client list and marketing engine. Ensure you use a drip automation tool to remarket to all of their aged lead database — this can often give you a quick influx of leads for a low price. This may serve to impress salespeople and alleviate their anxiety during the transition. Overspend on marketing the first 2-3 months and ensure the salespeople are extremely well-fed. This short-term damage to your profits will pay dividends as the salespeople get excited about the change in leadership. It is 100% your biggest priority to retain your top salespeople. Tell them you plan on expanding and blowing this thing up, but you need their help. Ask them for referrals.

If lead-flow supports it, hire 2-5 salespeople every month, and let go of the bottom 20% each month. Only start this after 3 months or so once you prove to the current staff that you have their back. Do this for one year and your sales floor will be significantly stronger by sheer, draconian number forcing.

Find your key players and win them over immediately — appeal to their greed by offering bonuses and pay raises contingent on performance. Have daily meetings for the first several months.

Hire 3-4 consultants to review and analyze the business on a weekly or bi-weekly basis. A financial consultant, a marketing consultant, an operations consultant, and an industry expert from a different region. You can use score.org for free mentoring and consulting.

Hey Kitty Kitty,

There are many options to fund a business that is pre-revenue, although they are certainly not as appetizing as the plethora of options that become available as you can demonstrate profits and otherwise positive cash flow.

An important side note — the property itself, if intended to be utilized for an automotive business, will likely require an appraisal that includes a “Phase 1 Environmental Report.” If the Phase 1 comes back showing hazardous chemicals have leaked into the soil beneath, you may be over your head with the “Phase 2” and cleanup process. I’ve seen clients lose HUNDREDS of thousands of dollars over this scenario.

With that being said, let’s focus on the funding options available to you. Because the business cannot demonstrate capacity to repay (eg: revenue/profits), you will need to leverage the other two “C’s” of underwriting: Credit and Collateral.

If your personal credit is above a 700 there is a good chance a brokerage firm (like mine!) could help you secure a personal loan of up to $100,000 and personal credit lines of up to another $100,000. Keep in mind those numbers are “up to,” whereas the average funding amounts are usually $20-30K each.

For the property itself, assuming it is appraised in the range you’re buying it for, your best bet would be a commercial lender who focuses on “soft money,” as I doubt you would qualify for the gold standard of an SBA 7A. An SBA 7A would be the absolute ideal situation — they fund up to 100% of the value, have wonderful rates, and lenders are eager to make these loans as the majority of their principal is backed by the government.

I believe the reason you wouldn’t qualify for this product right now is because we would need to show that there is a high likelihood of cashflow in order to support the loan repayment.

However, there are plenty of other commercial options available and I’d have no problem introducing you to a few gentlemen who could likely help. If I am wrong and an SBA 7A is on the table, they will be able to help you qualify under those product guidelines. If not, they will simply show you the next best option.

I wish you luck, from one entrepreneur to another!