The Six Figure Loss That Built Us | Building Family Together | Ep. 2

What happens when the project you bet your company on takes a six figure loss?

In Episode 2, Reggie and Tanora Polk pull back the curtain on the part of business nobody posts about. Early in Polk and Associates Construction, they underestimated a project and ended up owing six figures. It almost broke the company. Years of beans and rice, lean payroll, and praying through Friday paychecks followed. What pulled them through was a line of credit they had set up before the storm, a personal house already in order, a wife who chose encouragement over bashing, and a faith that did not remove the pressure but gave them the strength to endure it.

This is the conversation about marriage, business, and the long road of building something that lasts when the wins are still years away.
In this episode:

00:00  Intro
01:02  Welcome back. Bridesmaid duty, baby fevers, life check in
05:10  Why we wanted to talk about what nobody else posts about
06:18  Trust the process. But the process has to be accurate
08:48  Entrepreneurship magnifies your personal weaknesses
09:53  Let me tell you about the potholes I stepped in
11:11  Marriage and business is the ultimate pressure cooker
11:32  The six figure loss
13:48  The business line of credit that saved us
16:23  Having your house in order
17:11  The beans and rice years
22:53  Sometimes your best bid is a no bid
23:38  Overhead rates and the true cost of running a business
28:23  Sometimes trying to save money will cost you money
30:03  Faith didn't remove the pressure. It gave me the strength to endure it
33:50  We get to provide a life for other people. That's humbling
36:34  Legacy takeaway: Proverbs 22:1, a good name is rather to be chosen than riches
40:00  Wrap

Building Family Together is hosted by Reggie and Tanora Polk, married 25 years, parents of nine, founders of Polk and Associates Construction in Nashville, Tennessee. New episodes every two weeks.

Subscribe so you never miss a conversation. Tap save and share with the couple in your corner.

Follow on Instagram: @buildingfamilytogether

Listen on Spotify, Apple Podcasts, Amazon Music, iHeartRadio, and wherever you get your podcasts.

#BuildingFamilyTogether #BFTpodcast #ChristianMarriage #Couplepreneurs #FamilyBusiness #FaithLedFamily #BusinessFailure #BusinessLessons #NashvillePodcast

Transcript

SPEAKER_00 0:05

Welcome to the Building Family Together Podcast, the show where family, marriage, business, and faith come together.

SPEAKER_03 0:12

Yeah, so welcome back again. We're so excited to get everybody back in just to step into our world and share our story. And uh I'm really excited to get back on the couch with you.

SPEAKER_00 0:23

Oh, okay.

SPEAKER_03 0:24

And you're looking good, got your hair done.

SPEAKER_00 0:26

Okay, yeah, oh, yeah, I'm not having a bad hair day today, so I'm good.

SPEAKER_03 0:30

I see you got a little uh little extra color up in the front.

SPEAKER_00 0:34

Yes, your spirit has got on to me. Now I got gray hair in the front.

SPEAKER_03 0:38

No, but you look beautiful. And I see you uh try to check out my outfit today, so you try to match me a little bit. No, no, no. This was this was my idea. I actually think it's cute that you try to match me, but you know, um, I really appreciate that.

SPEAKER_00 0:52

Well, I noticed your ankles ain't ashy this time, like they were on the last uh pilot podcast.

SPEAKER_03 0:58

Ashy ankles, I had ashy ankles. Yeah.

SPEAKER_00 1:01

My hair was messed up and you had ashy ankles.

SPEAKER_03 1:03

Okay, all right, fair enough.

SPEAKER_00 1:04

Well, uh one of our one of our daughters called it out.

SPEAKER_03 1:07

Yeah. So all right, well, cool. Well, uh, yeah, glad to get back on the couch with you. Number one, let me let me connect with you and check in. So, how are you doing?

SPEAKER_00 1:16

I am doing well. Kind of tired. You know, we had a busy, busy week. The baby was coming off her first fever ever. She did not let me sleep. She didn't really let you sleep either.

SPEAKER_03 1:27

No, that that was rough. She was in the bed with us.

SPEAKER_00 1:29

Yeah, sleeping either on top of us or in the middle. So I didn't get a lot of sleep.

SPEAKER_03 1:34

You know what? Real talk, we gotta figure out how to get her back out of the bed because now she's actually pretty used to being in the bed with us now.

SPEAKER_00 1:41

But you know, all the parents who who, you know, they want, they want, they say it's good for your children to co-sleep with you, but I'm I'm not there yet.

SPEAKER_03 1:50

I I like having my space. Well, she's still young and she's so sweet, so she is sweet, but we we definitely have to come up with a game plan to get her back out of the bed. Um But I love my little sweet Vivi.

SPEAKER_00 2:01

Yeah.

SPEAKER_03 2:01

And we've enjoyed it, but she is she's comfortable now.

SPEAKER_00 2:04

Oh, it's no biggie. Yeah, so I'm still trying to get over that. So I'm still tired from that. And you know, I'm a bridesmaid. So I'm on bridesmaid's duty. We have like less than three months left into the wedding. I gotta lose 10 pounds. I gotta look good in this dress.

SPEAKER_03 2:20

You look fine in me.

SPEAKER_00 2:21

No, no, I got no, my pants don't say I look fine. Yeah. So yeah.

SPEAKER_03 2:25

But you know what? Watching you do the bridesmaid stuff makes me never want to be a part of any type of bridesmaid or any of that.

SPEAKER_00 2:34

Y'all don't have to do anything. Absolutely. I think y'all just go to the bachelor party and then show up and then y'all good.

SPEAKER_03 2:40

That's why we keep our stress down.

SPEAKER_00 2:42

No, we're like the maidens. Like when you're a bridesmaid, you are basically a maiden. And so we have the bridal shower coming up. I feel like as soon as I can get that off my list, I can think again. I haven't even filed my taxes. So yeah, I got a lot on my mind right now.

SPEAKER_03 2:56

Definitely file your taxes. We don't play around with that.

SPEAKER_00 3:00

Not our taxes from the business we have together. I have a side business. I have not done my taxes for that. But I'm not late. It's just my brain is occupied at the moment.

SPEAKER_03 3:09

Yeah, well, so we definitely will get that done for sure. Oh yeah. Oh yeah. Uh, but yeah, so you're doing the bras made stuff, baby was sick, uh, everything else good.

SPEAKER_00 3:19

This podcast.

SPEAKER_03 3:20

Podcast. This has been great.

SPEAKER_00 3:22

Yeah, yeah.

SPEAKER_03 3:23

A lot of great feedback on it. But you know, uh, just great. We're just lifing together, moving on. But I always like to do that.

SPEAKER_00 3:29

I'm just life and wifing.

SPEAKER_03 3:30

Check in with you, and mothering. You're doing a lot.

SPEAKER_00 3:33

And working, yeah, and cooking, yeah, and cleaning and driving. Because on the taxicab driving. You're doing a lot too. Well, you know, I feel like you do it a little, you know, with a lot more grace. Yeah. Yeah, but no, I don't want your energy. You be tired all the time. Well, you know, I feel like I'm I feel like I'm a little bit more energetic. Even though I do more physical work, I feel like I'm more energetic.

SPEAKER_03 3:57

Did you have your matcha this morning?

SPEAKER_00 3:58

I did have my matcha this morning. Well, that's that's your that is not the reason. That's your extra boost right there, is your matcha. Yeah. But I didn't eat. So if y'all hear my stomach growling, I didn't eat yet.

SPEAKER_03 4:09

Well, we are excited to get back on the couch just to welcome everybody back into our world and just really share the real life of who we are and what we do. Yeah. And you kind of mentioned some of those key points of family, marriage, business, and faith. And so once again, we just want to open it up and just talk about how that relates. I thought it would be interesting to talk about some of the challenges or learning lessons that we've been through. Yeah. You know, when you get on social media, everyone's posting about all the home runs, yeah. The good stuff, the grand slams.

SPEAKER_00 4:43

Everybody, everybody, when it comes to business, only tell you about the wins most of the time.

SPEAKER_03 4:48

Yeah, but we definitely uh we enjoy the wins, but we're not always winning.

SPEAKER_00 4:54

Yeah, we're not.

SPEAKER_03 4:54

You know, sometimes there are some challenges that we have to go through, but those challenges uh and those learning lessons actually help sharpen us and make us better. And so I just wanted to maybe shine a little bit of light on, you know what, when you're building a business or you're raising your family or whatever it is that you're doing, it's not always peachy.

SPEAKER_00 5:13

It's not always pretty either.

SPEAKER_03 5:14

It's not always pretty, yeah. Like you. Sometimes you like how I slip that in there. I'm always I'm always trying to get a brownie point. But you know, it's not always easy, it's not always pretty, yeah, but the process. And one thing I always encourage young entrepreneurs or or just anyone is you just always have to trust the process as you're working through it because the process is gonna get you to where you ultimately wanna be.

SPEAKER_00 5:42

You know what though? You gotta trust the process, but your process has to be accurate. Some people have processes and it's completely wrong. And so the business is ran into the ground because they don't have that educational the know-how of how to get there.

SPEAKER_02 5:58

Yeah.

SPEAKER_00 5:59

You know, so a lot of those things early on almost cost us our business.

SPEAKER_03 6:03

True.

SPEAKER_00 6:04

Yeah.

SPEAKER_03 6:04

Yeah. So definitely a lot of learning lessons. And I just I kind of want to give everybody a peek into that, but really I want to focus on all the stuff that nobody wants to talk about.

SPEAKER_02 6:15

Yeah.

SPEAKER_03 6:16

You know, the challenges that nobody wants to talk about because they were so painful that you and I endured endured together.

SPEAKER_00 6:24

I had to. Even if it wasn't my fault. I had to, I had to. Because we're one right. So if I'm married to you, whatever you do affects me and the family.

SPEAKER_03 6:35

You say even if it wasn't my fault.

SPEAKER_00 6:37

So if you mess up, that means I messed up.

SPEAKER_03 6:39

So yeah. Yeah, true. I mean, I definitely can speak to uh some learning lessons that I I take a little bit more of.

SPEAKER_00 6:48

It's kind of like if I burned the house down, you burned the house down. It's your house too.

SPEAKER_03 6:52

Yeah.

SPEAKER_00 6:53

So you gotta deal with your house being burned down, which I did almost burn the house down, trying to make African black soap in my kitchen. Don't ever do that.

SPEAKER_03 7:00

I'm gonna tell you, when you did that, I tried to shut it down. I was like, no more.

SPEAKER_00 7:04

You had soot all over the ceiling, like the flames were sweeping up over the stove in the in the oven hood. Um yeah.

SPEAKER_03 7:12

I shut that down.

SPEAKER_00 7:13

I was trying to be Nigerian.

SPEAKER_03 7:15

Yeah, no, you you know, I shut that down. The fl we still have a smoke stain.

SPEAKER_00 7:21

You ain't gotta tell everybody. Okay, I think we I think we paint it. I think we had that painted over.

SPEAKER_03 7:26

But in T ways, yeah. Uh yeah. But you know, just learning through those challenges of what we had to do with deal with, yeah, and helping others know that as you're building your family or your business or whatever you're doing while you're lifing, yeah, you will go through some challenges and situations and and circumstances. But as you continue down through the process, how do you come out from that and how do you bounce back from that? So, you know, one thing, uh one unique thing about entrepreneurship is it really magnifies your personal weaknesses.

SPEAKER_02 8:02

Yeah.

SPEAKER_03 8:02

Um and a lot of that is because we had to learn by fire through a lot of those things. We uh we are first generation uh business, first generation business owners, and we didn't know what we didn't know. So we would just do things in faith, do things out of this is how we think it should get done until we realize we're doing it wrong.

SPEAKER_00 8:25

Oh yeah. Your dad, though, he used to own a sandwich shop years ago. You helped him out, but I guess he never well, you were so young, you never knew how to run that.

SPEAKER_03 8:35

No.

SPEAKER_00 8:35

But I guess you didn't go to him for advice because we were in construction and he had a sandwich shop.

SPEAKER_03 8:40

Yeah, although I think just him being a business owner, he had some really great principles that he could definitely share. But we learned a lot through fire, just trial by fire. And we just walked through that. One of the great things is we had great consultants and mentors in our life to help guide us through.

SPEAKER_02 9:02

Yeah.

SPEAKER_03 9:02

One thing that I always try to teach others is let me tell you about the potholes that I stepped in so that you don't step in the same pothole.

SPEAKER_00 9:11

I thought you were gonna say so you don't lose your hub, your hubcap.

SPEAKER_03 9:15

My hubcap?

SPEAKER_00 9:16

I thought potholes were in the street.

SPEAKER_03 9:18

They are, yeah.

SPEAKER_00 9:20

Why would you step in a pothole if it's in the street?

SPEAKER_03 9:23

Girl, I'm just trying to give an example.

SPEAKER_00 9:26

Okay, my brain, like I'm a literal person, a pothole.

SPEAKER_03 9:29

Okay.

SPEAKER_00 9:30

I think of cars losing hubcaps.

SPEAKER_03 9:32

So I try to teach people don't drive your car in the same pothole.

SPEAKER_00 9:37

Okay, okay, okay. That would be a good thing. Because we'll be walking in the street.

SPEAKER_03 9:40

You gotta swerve around that pothole. Don't swerve. Is that better? No, that could cause an accident. You know what? We're gonna move on past the potholes. Okay. But in T ways, we try to teach others, you know, try to avoid some of the challenges and things that we went through.

SPEAKER_00 9:56

Maybe you meant to say pitfalls.

SPEAKER_03 9:57

Pitfalls. I mean, just all of all of the above. But uh another unique thing about when you're intertwining marriage and business, I look at that as like the ultimate pressure cooker. Because you got the pressures from marriage, you got the pressures from business that you're trying to put them together and make them work together. Yeah. And there's a lot of extra pressure with that.

SPEAKER_01 10:20

Yeah.

SPEAKER_03 10:20

And it's really easy to carry that from the office to the house or from the house to the office. And you have other folks, you have your team members around you that, you know, they don't need to be exposed to a lot of those items. So, you know, just trying to work through and navigate that. Um, but let's talk about maybe one of the challenges that we had to overcome.

SPEAKER_00 10:41

Money, money, money, money.

SPEAKER_03 10:43

Definitely some money challenges. Um, and just how we navigate through that. Yeah, I remember there was a project uh that we were so excited about that we won and we were executing the project, everything was going great. And then as we started to get halfway, maybe three quarters of the way through the project, uh, things were not going so well. And that was where I realized, uh-oh, we didn't estimate this project right. And at the end of the day, at the end of the project, I remember seeing a pretty significant loss.

SPEAKER_00 11:27

Six figures, uh yeah, to be exact.

SPEAKER_03 11:30

Yeah, who's counting? Uh a six-figure loss. And I found out about that first, and I actually had to come and tell you. Do you remember when I came and told you about that? Yes. Were you scared to tell me? Absolutely. I mean, I mean, that was a that was uh that was significant.

SPEAKER_00 11:50

Yeah, when you told me, I freaked out. I didn't spaz out, I just freaked out, like, oh my gosh, what are we gonna do? Like, that's a lot of money. And I knew that you estimated the job because you know, this was early on. So in my mind, I'm like, how are we gonna get out of this? How are we gonna pay this back? And so I couldn't beat him up because I already knew he felt bad about it.

SPEAKER_01 12:12

Yeah.

SPEAKER_00 12:12

And so, you know, I just try to be supportive, but it was a shock to me. So, you know. It was a shock to me too, because I think I think I was like, how did that happen? Or how did you do that? Like, what did you do wrong?

SPEAKER_03 12:24

I actually remember you you telling me that I need to go back to selling real estate.

unknown 12:30

Hello.

SPEAKER_03 12:31

You're like, hey, it's time to get out of the way.

SPEAKER_00 12:33

That was the good old days.

SPEAKER_03 12:34

Yeah.

SPEAKER_00 12:34

Go back to selling real estate and let's start building houses again.

SPEAKER_03 12:38

Yeah, I I remember you saying that. And uh it was tough. It was tough to tell you, you know, because I knew you're in the books, you're in the accounting, you're gonna see it. And I knew that, you know, we had to figure a way through it and work our way through it, but I knew that we could do that together and we would figure a way of making that work.

SPEAKER_00 12:58

I can't remember, but did we have to go and get a business line of credit, or did we already have a business line of credit?

SPEAKER_03 13:04

Yeah, so we actually already had a business line of credit.

SPEAKER_00 13:07

Thank the Lord, because you never want to try to get a business line of credit when you're sinking. Like you want to go ahead and have one when times are good.

SPEAKER_03 13:16

Yeah.

SPEAKER_00 13:16

And it took us like what, four or five years to pay that off?

SPEAKER_03 13:19

No, it wasn't that long. It was probably about two and a half, three years.

SPEAKER_00 13:24

Maybe three to four. And I just remember like so much of our profit just kept going to, hey, we got to pay this off. Hey, we got to pay this off. And I was just like, are we ever gonna get ahead?

SPEAKER_03 13:33

Yeah, but we one of the things that really helped us out was having that line of credit in place so that we could cover our losses and continue to operate and build and work through that.

SPEAKER_00 13:43

I think too, having a house in order, because we've tried, no matter how much money we make, even when we didn't have a lot, we've always tried to live below our means and to make sure that we didn't have any debt. So I think the only thing we owed at the moment, as far as personal debt, was a mortgage, and our mortgage at the time was low. Uh so I think that helped us too, because I think had we had all this personal debt, that really would have messed us up.

SPEAKER_03 14:09

But also, we were we run pretty lean on business debt as well. Yeah. Right. So from uh a business financing standpoint, we were able to navigate through that much better.

SPEAKER_02 14:21

Yeah.

SPEAKER_03 14:22

Just because of, to your point, having your house in order, which is really important. Now, when you say having your house in order, what does that actually mean?

SPEAKER_00 14:30

Having my house in order, like your debt ratio, um really like your finances. Like how are you running your home financially to where if something was to happen, even personally in your life, would you lose it all? And so for us, we're just big about not having debt and like living below our means and not spending more than we have and not borrowing, you know. What does it look like to you?

SPEAKER_03 14:56

I think you know, when you uh obviously the financial side of it is extremely important, but then also having, you know, a process or a procedure in place for how you're gonna execute whatever you're doing, whether it be business or family. You know, you have a way of how you like to do things and having great people in your world or in your pocket to help support what you're doing and help you through some of those tough times and those challenging times. But ultimately a lot of it comes down to the financial side of not being um overloaded with debt or things of that nature.

SPEAKER_00 15:32

So in your personal life, is that what you're speaking about?

SPEAKER_03 15:34

Personal and business. Yeah, I think it goes both ways because you know, personal life, we could be in a great place. But business wise, if I have a lot of truck loans and equipment loans and I have too many people on payroll and all these extra expenses, you know, that actually would eat away at the profit.

SPEAKER_02 15:52

Yeah.

SPEAKER_03 15:53

And that would take a take away our ability to respond.

SPEAKER_00 15:57

But I will say having your house in order financially, your personal life, if things were to tank with the business, it gives you some time to recover instead of having massive debt in your personal life and having massive debt in your business.

SPEAKER_03 16:11

Yeah, I agree. So a question. Uh, how did that mistake affect us as husband and wife and not just as business partners?

SPEAKER_00 16:20

We were eating a lot of beans and rice. And we've gotten so used to eating beans and rice that my kids know how to cook beans and rice, and they still eat beans and rice to this day. We still think, yeah, yeah, yeah.

SPEAKER_03 16:31

We have found some.

SPEAKER_00 16:32

Beans and rice are delicious. Like, I love beans and rice now.

SPEAKER_03 16:35

We have some gourmet dishes that involve beans and rice.

SPEAKER_00 16:39

All you need is beans, rice, sour cream, some cheese, salsa, and then I make my own seasonings.

SPEAKER_03 16:46

We ate beans and rice and rice and beans. And matter of fact, we pento beans, chili beans, black beans. Yeah. I mean, to this day.

SPEAKER_00 16:55

Yeah, so I think we just had to, I can't really remember because that was something I tried to get out of my mind, but we just had to live really lean. But like I said, because we didn't really have any debt, I was thanking God because we didn't have any debt that we didn't have to suffer too much personally. But the business did suffer because I think at the time we had, what, maybe three employees? We have about 35, 36 employees now, but I think at the time we had about three employees. So thank God that we were lean even in our business when it comes to personnel, because that would have been really tough.

SPEAKER_03 17:29

You know, you bring up a really good point because during that time when I was experienced, when we were experiencing that loss, everybody still had to get paid on time every Friday. I had to make sure everyone had their paychecks every Friday. I had to make sure that our suppliers were paid every cycle. Our equipment suppliers were paid every cycle. I had to make sure everything was paid and we still had to produce on the job side.

SPEAKER_00 17:59

Yeah, and I think too, a lot of business owners don't realize, especially when you're in the beginning to the middle of the business, a lot of times we as business owners barely get paid because we have to make sure that our people are paid. And so I remember for like maybe five years, I was just like, can we please build houses again? Like you were not really bringing anything in. I remember you saying that. Yeah, you were not bringing like really anything in, and neither was I. And but like I said, because our financial personal life, because our debt was so low, it allowed us to sacrifice. I think financially we sacrificed for the company. I'm I feel like maybe eight years, maybe even longer than that, to where our pay was very, very lean. Like it wasn't, yeah, we wasn't doing anything extravagant because you kept saying, babe, trust me, trust me.

SPEAKER_03 18:48

Exactly.

SPEAKER_00 18:48

I need these finances to go to building a company and paying people. But I'm like, we make way less doing all of this. I don't get it. We have all these big jobs, we're not making any money.

SPEAKER_03 18:58

Well, I knew that we had to be conservative. And and very lean. Right, and run very lean so that that would free up capital to hire the next project manager or estimator or superintendent or admin person, whoever that person was that we needed. I knew that I had to be lean and have that extra money in reserve. Or if we go through another cycle where things get a little slow and we had our employees already on staff, that I wasn't gonna let them go. I was gonna have them ride through that low, that low point of that slow cycle with us. And so that's why I always looked at running lean. And even to this day, you know, we still run conservative. Oh, yeah, you know, and but that was important. So um, you know, I think about what did we do during that time? Well, I can tell you we definitely made sure that we honored our commitments.

SPEAKER_02 19:51

Yeah.

SPEAKER_03 19:51

Right. Um, I remember at the end of that project, um, the main contractor they told us how excellent of a job we did, and they wanted us to do another job with head to the now now. Head to the now-no. I was like, you know what? Thank you, but no thank you.

SPEAKER_00 20:09

Yeah, it's because we did a good job, but guess what? We did this job for free. We did this job for you for free, and we took a six-figure loss.

SPEAKER_03 20:17

Yeah.

SPEAKER_00 20:18

They yeah.

SPEAKER_03 20:19

There were years, I I mean, when I think about the first years of business, I jokingly say we were a non-for-profit business.

SPEAKER_00 20:26

We we were a non-profit business.

SPEAKER_03 20:28

We were a non-for-profit. I mean, we got plenty of practice in.

SPEAKER_00 20:31

Yeah. And I think you got confident to the point where you was like, you know what, I'm not doing any more practice. So you had to learn to say no because you thought in order for the business to be successful, you had to say yes to everything. And a lot of times those yeses made us actually lose. But I think when you're running a company, sometimes you do it scared. And you're like, I got, I gotta say yes to this. I want this job, or you know. Well, you're thinking about revenue.

SPEAKER_03 20:58

I mean, you have to generate revenue, even if it's outside of your element or your business plan. You're thinking about, I need to generate some revenue because I have bills to pay, I have employees to pay, I have suppliers to pay. So you, there's always that itch to want to step outside of that.

SPEAKER_00 21:16

It's really like taking a leap of faith because we did not know how each job was gonna go. I think now that we're more seasoned, we kind of know how to steer our jobs, you know, with the estimating, with our programs and things like that. But in the beginning, I remember sometimes you would get scared when you won a job. You was like, oh crap, what did I miss? Why did I win this job? Yeah. Like, how much money did I leave on the table?

SPEAKER_03 21:40

That is a scary phone call when you get awarded a project.

SPEAKER_00 21:43

And you're scared.

SPEAKER_03 21:44

Because you know it wasn't because you they just love you that much.

SPEAKER_00 21:46

It's because now, now they love us a little bit.

SPEAKER_03 21:49

Now we yeah, we're in a different place now because we have great clients that enjoy our work and they see the value in what we do. Yeah, but whenever it's a competitive. Bid project, it's lowest price.

SPEAKER_00 22:02

And someone taught us sometimes your best bid is a no-bid. And that has saved us a lot of heartache. Shout out to Rough Consulting. Thank you.

SPEAKER_03 22:14

We definitely are more careful about the projects that we take on. And we'll look at it on the front end and we'll do a no-go analysis and we'll determine is this the right project for us? Is this the right client for us? Not every client is the right client for you. You have to go back and analyze if this is the right client for you.

SPEAKER_00 22:36

So basically, that job that we took, that project that we took on that produced a six-figure loss, it taught you that it's okay to just say no.

SPEAKER_03 22:46

Absolutely. Tenora, why don't you talk a little bit about our overhead, like our understanding our rates and just some of the core business things that we had to learn and understand from this particular situation?

SPEAKER_00 23:00

Well, I think you would do a better job at that. But from what I know, I know with our overhead rates, it has to be a way that you calculate everything. A lot of times when people run a business, like let's say you have a coffee shop, right? You have a coffee shop, a lot of times when people start a business, they say, okay, I need money to buy the coffee and everything that I use to make the coffee, to pay the employees and to pay maybe like for the rent. But nobody thinks about, oh, I'm gonna have a tax rate or lawyer, or I have to have an accounting system in place.

SPEAKER_03 23:33

Insurance.

SPEAKER_00 23:34

Yeah, insurance. Um, for instance, if you have an employee, like let's say you pay your employee $50,000 a year to help you run the coffee shop. A lot of people don't realize that your employee really does not cost you $50,000. Your employee might cost you $85,000 because then you have the FUDA and the SUTA and the unemployment tax, and you got the payroll tax because you have an employee, and then you have $401 if you offer it. Um, so your employee costs you more. And then if they're a bad employee, they might cost you $100,000 because sometimes your employees will lose money. Um, yeah, so a lot of times I think the issue with overhead rates that gets a lot of business owners is the fact that they're not calculating those and then they don't know how to put the percentages on top. They're only saying, hey, I had to pay this much for the rent, for the employee, for the coffee, but they're not thinking about all of the other overhead or the administrative costs that come with having that business. And I think that can mess people up. Because I remember there's one point, I still remember this. You had got like a really good job and you came home like with an $80,000 check. Do you remember that?

SPEAKER_01 24:42

I do remember that.

SPEAKER_00 24:43

And I was like, oh my god, I'm rich. Like, we finally got some money. And you was like, no, no, no, no, no, we ain't keeping this money. I said, What you mean? And you literally was like, I gotta pay this, this, this, this, this. I think we had like $5,000 left after that. Oh, yeah. I was like, are you serious?

SPEAKER_03 24:58

That check was spent right when I received it.

SPEAKER_00 25:00

Yeah, so that taught me now when I see a big check, that doesn't mean nothing. You can have a $10 million business and do $10 million in revenue, but you're really only keeping like $50,000 to $75,000. So you have got to get those overhead rates, those administrative costs down, and you have to understand how they work.

SPEAKER_03 25:21

You know, that's a whole nother episode in and of itself to talk about that business component. Yeah. And at some point, we may be able to get uh a little bit more in the weeds and talk about that. But that is extremely important, understanding all of the costs associated with running the business. Yeah. To your point of the coffee shop is not just uh a matter of hiring an employee and being able to serve your coffee and having machines, but you know, who what's your trash service? Yeah, what's your insurance cost? What are all of those costs that roll up that you have to pay for as a business owner?

SPEAKER_00 25:54

Oh, yeah. And then when you make more in your business, the insurance is gonna go up. Yeah, you may oh, you made a little bit more revenue than you said. You know, we're gonna charge you for that because you could have had an accident.

SPEAKER_03 26:05

So we're gonna charge you for that too. Everything goes up. So yeah, uh, but that was key for us to realize that. And then at that point moving forward, we made sure that that cost was incorporated into everything that we did.

SPEAKER_02 26:18

Yeah.

SPEAKER_03 26:18

With at, you know, really still having the same understanding of we still have to run lean because those costs will actually inflate your proposals and make your number really high. So we knew that we have to stay competitive and keep those numbers.

SPEAKER_00 26:32

Because you can miss out on a job if your number is too high.

SPEAKER_03 26:34

Absolutely. And we don't like missing out on jobs. No, no. You know, another component that I thought about was just having your team in place. And when I say our team, I think about our legal team, I think about operating team, our operations team, accounting team, accounting, our risk management, oh, risk management, all of that. Risk management is.

SPEAKER_00 26:54

People will come for you.

SPEAKER_03 26:55

They will come back to you.

SPEAKER_00 26:56

Just because you are a business owner.

SPEAKER_03 26:57

They will absolutely come for you. And it's important to have all of those things in place uh so that when they come for you, you know who to contact with that specific team. And also, too, I'll tell you, you know, as a young business owner, we always were trying to save money. So we would come to 10 and cost of 20.

SPEAKER_00 27:19

That's what your uncle said.

SPEAKER_03 27:20

Oh, yeah, for sure. 10 will cost you 20. And we would always go to that particular professional and say, hey, you know, can you do it less? Or we would try to go find someone that would always do it less.

SPEAKER_00 27:33

And they cost us money because we were literally trying to save money.

SPEAKER_03 27:36

Absolutely. Yeah. And sometimes trying to save money will cost you money. Now, the reality of it is we're all on a budget. Yeah. And we already we are always mindful of cost, and that's normal. But at the same time, we try to put the focus on the value that that professional is giving us. What are they providing us and paying for that value versus bottom dollar? Because to your point, trying to save money can and will cost you money at some point.

SPEAKER_00 28:06

Oh, yeah. Like when we actually started bringing valuable people into our lives and I saw their cost, I was like, ouch. But then there was one person who did something in our business, and that was an ouch, especially when it came time for tax season and we saw all the mistakes that were made and you know how we owe so much.

SPEAKER_03 28:24

They are no longer on our team.

SPEAKER_00 28:26

Yeah.

SPEAKER_03 28:26

We had to, we had to change up on that. But you know, when I think about the folks that are in our lives, our our our legal counsel, our risk management folks, our accounting folks, they are still in our lives. Our CPAs, they are still in our lives. I mean, we are blessed. We have such a great team that we're rocking with, and they have our backs, they understand how we execute and operate. And that's helped us be a really, really strong as a company and just great business friendships.

SPEAKER_00 28:57

Yo, yeah. And you know, we have this thing that we say we do business with people that we know, like, and trust.

SPEAKER_03 29:02

Yeah, absolutely. So that that's great. So, you know, that's those are some of the things that actually really helped us through that and helped us overcome that. You know, one of the things that I realized is that faith doesn't remove the pressure. Uh, it didn't remove the pressure for me, but it actually gave me the strength to endure it.

SPEAKER_00 29:22

Yeah.

SPEAKER_03 29:23

Does that make sense?

SPEAKER_00 29:24

Yeah, it does. One thing I like about you too, though, is even when we went through those hardships, and we still have hardships and learning moments, they're not as painful. But even when we went through that hardship, for me, it made me want to give up. But for you, it encouraged you to keep pressing on. Like I remember you saying, I'm not worried. Like you knew we were gonna get out of it.

SPEAKER_03 29:45

Yeah, you know, I just have so much confidence and faith in what we're doing. I don't have a plan B. Right? I don't want to have a plan B. I want to have a plan A and I want to execute my plan A. Kind of like you. You're my plan A. I don't have a plan B.

SPEAKER_00 30:02

Yeah, you threw away the receipt.

SPEAKER_03 30:04

The receipts are gone, so I can't take you back to the store. Yeah. Uh, but I, you know, we don't have a plan B. We focus on plan A and making sure that plan A works and we have our confidence in plan A. And so when those challenges came and when we had to face those, my mindset was how do I navigate through this so that I'm never in this situation again?

SPEAKER_02 30:27

Yeah.

SPEAKER_03 30:28

What do we need to incorporate or change or fix so that we're not in this situation again? And just putting that focus on it. But let me tell you, one of the things that really helped out was your support through all of that. You could have bashed me, you could have kicked me while I was down. You knew I was already feeling terrible. Oh, yeah.

SPEAKER_00 30:47

Why add to it?

SPEAKER_03 30:48

But you took the road of encouragement and comfort and helping me get out of it.

SPEAKER_00 30:54

And when you think about even giving you the side eye, but you just didn't know.

SPEAKER_03 30:57

You gave me a lot of side eye, a lot of a lot of neck turns.

SPEAKER_00 31:01

But I still served you dinner, I still was respectful in my speech, but at the same time, I'm like, this man lost all this money.

SPEAKER_03 31:09

Yeah, but you that encouragement and that support fueled me to want to fight it even harder and to make sure that we were not in that situation again. So thank you for the support that you gave. Because that really was really special. That meant a lot to help us get out of that. But um, yeah, just understanding what we were doing, what we were going through, and how can I make sure that we're never in this situation again. And you know, things are unpredictable though.

SPEAKER_00 31:40

It rains on the just and the unjust. Like things are still unpredictable. Yeah. So I think even in those moments, we had to just put our faith in the Lord. It was a lot of prayer, and I remember times a lot of fasting. I knew you were in prayer and fasting because you you was getting skinty.

SPEAKER_03 31:55

I was missing some meals.

SPEAKER_00 31:56

Yeah, you were missing some meals.

SPEAKER_03 31:58

Yeah, yeah, yeah. But I knew I knew what it took to get us back on track.

SPEAKER_00 32:04

I was eating though. I was eating good. I was nursing a baby, I had to eat.

SPEAKER_03 32:08

Yeah. But you know what? Had we not focused on those areas, yeah, we literally could have faced a disaster and not only just in business, but in our family.

SPEAKER_02 32:18

Yeah.

SPEAKER_03 32:18

You know, we had to really take a step back and put the focus on those areas and figure out how do we fix these areas so that we can continue forward. When you think about your team, not only your legal team or your uh accounting team or or even risk management, but just the people that were counting on us every day to, you know, our employees, our teammates. Yeah. I mean, we we have a commitment to them to make sure that we're able to give them a paycheck or or their their lifestyle or whatever it is that they're seeking, we have to make sure that we're in a position to uphold our end of the commitment, our employment commitment.

SPEAKER_00 32:59

So you know what, Reggie? I'm actually humbled that we as a business can provide a life for other people so that they can provide for their family. That's really humbling to me.

SPEAKER_03 33:12

You know, being able to provide a career path for someone is really special. And I don't take that lightly. We don't take that lightly. We look at the opportunity to provide because when when we're bringing on a new team member, they're depending on us for that provision. And to not fail. When I say us, I mean obviously the the Lord provides for yeah, yeah, but they're they're counting on us for that employment opportunity, you know, those career opportunities. So it's important. So I try to be very, very careful whenever we're hiring people on because I'm committing to that person. We are committing to that person, so that's really important to do. Um, but you know, we knew that we were called to do what we're doing, and I think I know that is why we were able to just really lock in and focus because we knew we weren't going back to doing anything else other than.

SPEAKER_00 34:10

I didn't mind. I didn't mind. I like building houses. You were ready to change up. Oh, yeah. I like building houses. It's less stressful. You and I were the only employees. We ran our jobs, we got our money, move on to the next project, done. To me, it's way less headache. And I think a lot of people that come into the business, like you said, they only see the wins, but they don't really see the blood, sweat, and tears and the sacrifices that we make in the prank. Like, Lord, how am I gonna pay my employees because we're going through a difficulty? You know, it's a lot.

SPEAKER_03 34:40

We yeah, we tell people we didn't wake up just looking like this. No. We had the it was a lot of long nights, early mornings, a lot of makeup to put on.

SPEAKER_00 34:49

You're uh, you're till this day, not as bad. Up in the middle of the night, all your thoughts come to you in the middle of the night. How can I make the business better? Or I'm having this situation at this job. How do I make that better?

SPEAKER_03 35:00

That's funny. I keep the phone by the bed. That way, when I get that idea or that uh the answer to their problem, I'll just jot it down and then I can deal with it in the morning. But yeah, I mean, just stuff comes at random times, but you know, that's just part of the process. And we just we embrace it and we we work through it, but just a hundred percent just focus and just commitment to what it is and what we're looking to do.

SPEAKER_00 35:25

Oh, yeah, because sometimes I feel like you can lose your drive or passion when you're going through difficulties in the business or feel like you're on the verge of losing it. But yeah, like your commitment, you have to learn perseverance.

SPEAKER_03 35:37

Absolutely. I think that's important. So, what's a legacy takeaway moment that you would want to share?

SPEAKER_00 35:44

I believe Proverbs 22:1 says, a good name is rather to be chosen than riches. So we want to make sure that our name was good. It that's more valuable to me than wealth. Wow. And so even though we were going through those trying times, to me, I used to tell you this all the time, Reggie, it's more important that your name stays good, that you keep a good name, that the company keeps a good name. Because, you know, we didn't we didn't want to, when we were going through those difficulties, we didn't want to be known as the ones who don't pay their bills, they don't pay their employees, and you know, so keeping your name good, having faith for the Lord to see you through, but seriously, perseverance because it is so easy to quit. I believe, what is it? What is the stats? Like within the within five years, 50% of businesses fail. Or is it like most businesses don't make it to 10 years and we're on 15 years? Yeah, yeah.

SPEAKER_03 36:36

You know, yeah, it's it's the stat, I don't remember the actual percentages. I'm sure it's higher than that number.

SPEAKER_02 36:42

Yeah, yeah, probably.

SPEAKER_03 36:44

Uh, there's a lot of challenges that you face, but as you're facing that, what's your character? How are you gonna respond to those things? And you're right, making sure that we honored our commitments and did what we said we were gonna do. And that is what has strengthened our name in the community and our state and the surrounding states that we work. Um, that is what has really strengthened our name. So I think that's a great legacy takeaway moment. I think about uh having your house in order.

SPEAKER_02 37:13

Yeah.

SPEAKER_03 37:13

You know, that is that's critical. And that that's a component, that's an idea that is not just for business, but it's for home.

SPEAKER_02 37:22

Yeah.

SPEAKER_03 37:22

You know, it's important for me to have our home finances in order so that when we are operating our business or we're starting a business or whatever we're doing, if we're doing it well at home, then we can apply those similar principles to the business and it'll work. You know, there's a little bit of adjustments that you have to do because business is a little bit different. But at the end of the day, we have to have our house in order. I remember trying to go get that first business line of credit, and I didn't have a whole lot of revenue to show on the books. Yeah. And I remember the loan officer telling me, hey, listen, I like you, I believe in you, I think you're gonna do well. You don't have a lot of revenue on the books. Yeah. However, your credit score is really strong. And I believe that you'll pay us back. So I'm gonna trust you and give you this loan.

SPEAKER_00 38:12

Oh, yeah. You know, when you say that, that reminds me of the scripture that says that if you are faithful in the little things, the Lord will trust you to be faithful in the bigger things.

SPEAKER_02 38:20

Yeah.

SPEAKER_00 38:21

So I think too, just being a business owner, you have to be faithful in the little things in your personal life.

SPEAKER_01 38:26

Yeah.

SPEAKER_00 38:26

Like, are you faithful in those things? And then I believe that character that you show in your personal, your home life with your finances will reflect in your business.

SPEAKER_03 38:35

Facts.

SPEAKER_00 38:36

Yeah.

SPEAKER_03 38:36

So yeah, definitely just making sure that you have your house in order and honoring your commitments, doing what you said that you would do, protect your name, protect your brand, protect the things that you're building, protect your family name.

SPEAKER_02 38:50

Yeah.

SPEAKER_03 38:50

Uh, what do we tell our children? Listen, if our your last name is the same as my last name, you're gonna make sure you do right. You know, don't mess our last name up, you know, and so we want to protect that and honor that. But those are some key takeaways that I think will really help out our listeners and the folks that are benefiting from this podcast and the things that we're sharing is, you know, applying those things to your life. I mean, this is just works for us, right? This may not work for everybody, but this works for us. So that's a that's a major takeaway. But you know what? I want to hear from our listeners. I want to hear the questions that they have for us that maybe we shared a couple of nuggets that they want to hear more about. I would love to hear some questions, and we would definitely do our best to try to respond back to those. Who knows? You know, we may spend a whole lot more time answering just that one question that goes kind of deep. But it's important to us for our listeners and the people that are benefiting from what we're sharing to ask us questions and and try to apply that. It could be about business or family or faith or marriage. Yeah. And now we're not the experts on any four of those.

SPEAKER_00 40:05

No, we're just living life.

SPEAKER_03 40:06

We're just living life, uh, but we can at least share on that. So that's important uh for us to we want to hear from from everybody. And we've we've already had a lot of great questions rolling in, but what about you know, somebody else that thought about something? So please, if you got something that you want to share, drop it in the comments below. We'd love to hear your question and try to make sure that we get back to that. Also, if you feel like this podcast has really blessed you, if this was helpful for you, you know what to do. Click, subscribe, like, follow us so that you know we can get the word out to more folks about what we're doing.