What do you give a builder who has everything? An extra 30 days.
I probably shouldn’t have waited to bring this up, but I know how to solve some countries’ financial problems: Put a builder on the International Monetary Fund (IMF) negotiating team.
Warbucks Construction was a multimillionaire developer and a good customer, at least on paper. He bought a lot of material, didn’t haggle on price, and didn’t shop around.
Still, we would have gladly traded his admirable qualities for the chance to have him fitted with one of those ankle transmitters parolee’s wear. I used to think everyone called him “old money” because he came from a very wealthy family; in fact, any money he made got old before he begrudgingly parted with it.
Warbucks was always at least 45–60 days behind on payments, always seemed to be “unavailable” when our credit manager called him, and always seemed too busy to return her calls. One time, when Warbucks was 90 days late, his assistant put her call through by mistake. She hardly identified herself when he broke in.
“I can’t believe you keep calling me, and I’m highly insulted by this harassment,” he barked and then hung up. When she tried again a few days later, a new person answered the phone.
I purposely stayed out of it for a while, as I wanted to see if she could wear him down. Apparently, she did just that (good for her). Warbucks called me in a rage (his typical style), threatening grave consequences if we didn’t “back off.”
I tried to explain that it wasn’t personal; we simply couldn’t run our business, allowing him to pay whenever he wanted. “I don’t give a damn,” he shouted. “I’m a man of honor, and you know I’ll pay you … eventually.”
What he wanted was to set up a meeting with me and his salesperson. According to Warbucks, it was to “get you people straightened out.” As it happened, I was available that afternoon, so, naturally, I said I wasn’t available. I didn’t want to set a bad precedent with him.
“Fine,” he snapped. “When are you available?” I replied, “How’s tomorrow afternoon at 3 p.m.?” Warbucks agreed. We arrived at 2:50 p.m., and, as expected, he made us wait until 3:30 p.m. I swear he did that just so he’d feel that he had the upper hand.
Finally, we were ushered into an office large enough to have its own zip code. As we started to sit down, he said, “Don’t,” menacingly. “You don’t have time to sit; I have too much to show you.”
For what seemed like forever, he walked us around his suite, pointing out the fine craftsmanship in his hand-carved desk, his wet bar, his bookcases, and even his private bath. He painstakingly described the paintings on his walls and every objet d’art in his extensive collection.
Then he brought us into an adjoining garage and showed us his collection of classic cars, including a Lamborghini and a Ferrari.
By now, we were wondering why Warbucks was showing us all this. We assumed it was for something other than to stroke his own ego. Whatever his reasoning, it was working. We felt like we were James Bond in Goldfinger’s clutches. (For all the young people out there, look it up.)
I was about to ask what this was all about when he said, “I bet you’re wondering what this is all about, right?” I felt like saying “duh,” but I didn’t.
After all the time and theatrics, he wanted us to know that he had plenty of money and that he would never “stiff us.” Of course, I had been in this industry long enough to have heard that many times before. What he really wanted was for us to waive his accumulated finance charges and give him net 60-day terms in exchange for his promise to pay within those terms going forward.
I tried not to laugh, because that was exactly what we were going to offer him. However, I didn’t want him to think it was too easy, so naturally, I hemmed and hawed. I explained that what he was asking for was highly unusual, but after a few minutes of making Warbucks sweat a little, I acquiesced.
Besides, we had already raised his margins to more than cover his carrying costs. (For the most part, he kept his word and paid us within agreed-upon terms).
Mike McDole has 40+ years of actual LBM experience, including being SVP of a large regional pro-dealer, and is the principal of Firing Line LBM Advisors. He’s also partners with Greg Brooks of the Executive Council on Construction Supply and his LMS. Mike can be reached at 774.372.1367 or Mike@FiringLineLBM.com.
