Who will go belly up?

[randy]

Awesome post Randy! The Dubais of our industry are going down...

There were many companies here locally that appeared to be doing very well, but when business dried up even a little bit they were strapped and struggling. From my unscientific count there have been 5 companies in our area that seemed to be well established that have already fallen.

Oddly, I know of other companies that have benifited from the loss of competition. Personally I can say that I am glad that I'm not starting up a new company in this environment and that we are very small.

I'm seeing the same thing here in the "recession proof" DC metro area. Companies once thought to be industry leaders are closing up left & right. A few industry "salesmen" / bullshitters are still trying to pitch their bigger units, but the sensible ones are encouraging newbies to look at entry level truck mounts or portables. It's easy for industry pitchman that aren't in the carpet cleaning business to play the all is well mantra, but anyone that is really in tune with the industry or reads the Wall street Journal is smart enough to know we have a rough winter ahead of us. Personally I know of 15 carpet cleaning business that have shut down here. I believe it will be closer to 50 before we are headed out of this. Anyone encouraging a new guy to get started in this business in today's market with lots of debt is a flat out scum bag.

 

[randy]

I talked to Nick a few weeks ago and he sold 4 machines last month. That sounds like a fairly good amount for a little guy to sell to me.

I don't know very many people that believe much of what Nick says. Personally , I wouldn't believe a word he says if his tongue was Notarized.

 

[Carpet Cleaning Fool]

I'm suprised there isn't more discussion regarding WhiteMagic.

Thought I saw an article they were the victom of embezzlement.

Anyone know if it's true? It was a lot of money to let slip threw the cracks.

 

[randy]

I'm suprised there isn't more discussion regarding WhiteMagic.

Thought I saw an article they were the victom of embezzlement.

Anyone know if it's true? It was a lot of money to let slip threw the cracks.

Unfortunitly that is true, a link was on ICS with the news articles on the matter. Horrible to see any company raped like that, but it also a great reminder about financial controls. Most of the companies represented on this board probably sign every check and have absolute direct control over the funds but we also need to cover other risk spots.

1) Don't leave a check book or wallet/ daytimer with a check in your vehicle. One Check is all it takes for a scammer to nail you.
2) Use the security checks that are harder to alter and safety ink pens that are hard to "check wash" ( Uni-ball roller balls from any Staples are a great choice).
3) Think about a lockable mailbox that allows your mail to be delivered but only removed with a key.
4) Buy a tri-cut shredder for a couple hundred bucks and shred all invoices, account info, discarded credit card statements etc. Dumpster divers are often identity thieves.
5) Don't use your debt card online or at a restaurant (where the waiter takes it away from the table).
6) If you ever end up in the hospital don't let some hospital personnel remove your wallet. Hand them you ID & Insurance card but nothing else. They don't need to xerox your credit cards and social security card (which should never be in your wallet).
7) Lock up extra checks, social security cards, credit cards etc. A hidden safe or safety deposit box might be an option. If an employee takes 3-4 checks from the back of a check book you will not know until the bank calls or you get your statement.
8) Review your credit card statements, bills and bank statements when you are wide awake and in the mood to be thorough.
9) Unload your wallet. Do you really need 15 credit cards, and multiple ID's on you 24/7. Get a slim, front pocket wallet and use cash for most purchases that alone will eliminate 80% of your exposure.

The $450,000 that White Magic lost will probably not be covered by insurance and could very definitely be enough to sink a company of that size, especially in times like this. Very unfortunate and sad, BUT the result of poor management. They gave a scumbag a opening and she took it.