Forums: Discussions for entrepreneurs and small business.

I have a business going on 3 years now designing and remodeling homes. I have managed to make it this long through the recession by adding clients to fill the empty spaces. I am looking to expand my business with a small inexpensive office and other services to offer so that when the market recovers I will be able to support the work load from all of the clients I have added over the past year. My highest income year 2007 with only 5 builder clients working alone with a price 35% less than my current charges I grossed $90k with no overhead working out of my home just designing with no other services. Now I have 20 builder clients and growing with a much more homeowner client base over the past year. However because of the slow economy I don`t have the funds I need to expand and buy the little equipment I still need to offer the additional services I have found a need for in my industry. The investment would be around $75-$100k and I would turn over 50% of the business ownership in return. Please contact me for a business plan and break down of the costs of which the funds are needed. I am also educated with a Bachelors Degree in Architecture and many years experience designing and building homes. There is a lot of income potential in the next 2 years that should give a great return on your investment. This will be a business that includes all of the following services: Designing New Homes/Additions/Remodels, Printing & Scanning services with electronic file library`s for builders, Online plan website selling plans for a network of designers, Building & Remodeling homes for clients, Rendering services and material lists for building. This is an established business with a solid client base not a startup company hoping and waiting for the first client to walk through the door. To learn more about the business and see some of my previous work in my Design Portfolio go to www.jamiecomptondesign.com. Thank you and I look forward to speaking with you.

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Jamie Compton
Jamie Compton Design Inc.

Unfortunately being self-employed has made it difficult to get a loan and my wife has been a stay at home mom now for going on 2 years so we don`t have a second income. We just refinanced our home to get a better rate when the rate began lowering and I had to jump through hoops of fire and a few back flips to get that done with the credit crisis. The only option I really have is to look for an outside investor. My business has seen steady growth in clients but the income has been less with the economy. This is why I want to change the direction of my business to offer other areas of service so that if one area is low the others can help supplement the loss. These services were decided on because of past request from clients and experiences on my own part trying to find them. I want to be smart with the investment which also has portions budgeted for steady advertisement which I have not done in the past. I have built this business on mostly referrals from clients and a few mailings to local builders. Right now the market belongs to the homeowners not the builders, they are the clients looking to take advantage of this market. Builders will begin being active again once they sell their current inventory and the banks begin lending them money again. I have also partnered up businesses with two builders for limited partnerships per project. One is for projects under $500k and the other is for projects over $500k with a 50/50 split on profits between their company and mine once the job is completed though we will be splitting duties equally. With a profit margin of 25-35% of build cost per home with my companies share being 12.5-17.5% there is quite a bit of return since most of the designs I typically do average around $400k build cost. Another service for the online plan website has companies making millions a year selling outdated designs that are already seen in every neighborhood in parts of the country. I have a network of designers interested in selling their plans online for extra income waiting for the fair deal that others are not offering. I`m not saying we will make millions but if I can offer more for less with great quality designs there is a great market waiting. I have no problem working with a partner even with one whose not exactly active in the day to day activities. I am a bit of a workaholic and have done everything required of me and more to keep my business going. I work 70 hrs a week even when slow because when I see the work decline I work even harder to find more. This is more than a business to me it is my life and everything I know, it`s not an idea that came in a dream one night that I am now looking for someone to invest in. This is an established business with real clients in need of smart growth sensitive to today`s economy but planning for the next boom that will inevitably come. My business is different than my local competitors many of which are ran and operated by individuals that lack the credentials I find important in designing a home. I give more standard for less in my plans and still have a faster turn around time because I usually know what the client wants before they do. My charges are still 30-70% less than my competitors prices so I have room to raise my rates as needed over the next few years to support the growth. I have created a network of sub-contractors to use rather than hiring full time help until the market recovers to save on overhead expenses. In the field of dreams terminology rather than building it and they will come, the players are already here waiting for the game to start and I need a field for them to play on when it does.


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Jamie Compton
Jamie Compton Design Inc.

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Thanks Mark!  I have no problem with an investor overseeing the business and giving input on their ideas of directions to take I am an open minded guy and far from being set in my ways. I specifically need the money to pay for the

1. Office space/utilities for the year
2. Buy the 2 large format printers & scanner needed (one black & white for plans and the other color for renderings and sales posters)
   
3. Software for the additional services
4. Furniture for office space
5. Yellow Page listings for the year in many market areas (I haven`t listed in the past)
   
6. Target marketing to homeowners through direct mailing post cards, many don`t know they have the alternative to hire a designer then shop for a builder saving a lot of money.
7. Development of website to sell plans with security, shopping cart and check out.
8. Working capital if needed though the target marketing should bring in the homeowner business needed to support some of the growth. I already have neighborhoods waiting for the market to return for me to start designing as well as a few other projects on hold.
   

My direct competition in this area market had an investor invest $275k into their start up. However the one thing they are missing is a Principle Designer, they asked me to start up their company and train 10 drafters to use the program we use to design homes called Softplan.  I turned it down because they wanted me to give up my company bring my clients but wouldn`t in return give me any share in their company. I felt like it would be too easy for me to train their employees and then they let me go to save money. They have contracted out to designers for their previous work that they show clients as their own. They pay the designer so much each time the design sells and they make modifications to it to match the customers needs and charge the full amount of a new design at a high rate. I had a client tell me they had them to do a design for a homeowner and the homeowner didn`t want anything they had to offer but instead wanted something to be drawn from scratch from their ideas. It took them 18 months to get something the client was happy with and from what I heard they actually paid another designer to do the work in fear of being sued since the project was to be completed in a few weeks.  Not one person in the office has a Degree in Architecture as I was told by someone who worked for them. They have sales people then they have drafters most with 2 year degrees and a design supervisor. I want to create a similar setup but with an actual designer over seeing the work and meeting with the clients face to face. I would like to train people to do what I do so that the business becomes independent of itself and would continue to operate while I work to continue growing the other business areas.  Those I train will move up to lead designers to lead teams of other designers hoping to follow the same path.  I have many connections for potential team members for each service and would like to participate in a work study program with the local High Schools and Colleges for those interested in this career.

I don`t know that this exactly answers your question Mark but I can`t really give up too much more on a forum. My business plan outlines much more and breaks down costs much better than I can post on here. However I just can`t release it to anyone it would have to be serious investor who would have to sign a confidentiality agreement.

Thanks for your advice Mark.





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Jamie Compton
Jamie Compton Design Inc.

Your correct Robert, I have already had some of those guys approach me well before I decided to take this direction. I had one tell me they would take 100% ownership of the company and I would work directly for them. Another who began the conversation with asking if I could put my home and cars up for the collateral on their investment who also mentioned he was in the process of selling a night club building he acquired from his last investment venture which I saw red flags flying every direction. I began ignoring his phone calls that came for another month. There are scam artist everywhere so I will be extremely careful with who comes aboard so that everything I worked for doesn`t disappear. I will also be sure that in the contract they would only be allowed to sell back to me if they decide to cash out at any point so they don`t sell to someone like you are warning me about.

I have some builders clients who are giving me some leads on investors they have used for spec homes and model homes. They all seem to think that $100k is a fairly good deal from their experience working with me as a client and that one of these guys may be interested. We will see I guess.

Thanks for your help guys.


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Jamie Compton
Jamie Compton Design Inc.

Fair enough, just be careful, have an attorney review all agreements that you make. Good luck.

I thought about taking multiple investors but it seems much more difficult to divide. I want the investors to make money so how would I divide stock shares or percentage so that they would still be interested? Dividing 50% in to 4 $25k investments doesn`t seem as appealing. I could go with higher percentages where I become the minority share holder but more than the other individually. Then I would have in the contract that shares can only be sold back to me to prevent one from buying the others shares and own the majority. What are your suggestions of dividing up the needed investment? Thanks!


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Jamie Compton
Jamie Compton Design Inc.