Anyone who has been through a growth spurt knows that it’s not always smooth sailing. When Chris Lee, president of Earthworks in Lillian, Texas, faced some financial struggles during the company’s expansion and the construction of a new satellite office, he learned that facing his woes head on was key to getting the situation under control.
A few years ago, Lee says the need to build a satellite office presented itself. After using bank financing to purchase the property, the idea was to fund the construction from cash flow. Several big jobs came in and everything was looking good — until material for those jobs began to tie up cash that was intended for construction. Lee says it was like a perfect storm. Everything began to go wrong at once. Not only did the big projects require a lot of upfront cash but the clients weren’t paying on time. Construction costs began to escalate and the construction company was demanding money on an almost weekly basis.
But Lee says things hit a true low point when he received a call from his chemical crew. They were at the supplier picking up a large quantity of post emergent — the application of which is something that Lee says separates Earthworks from its competition — when they were told the company was over its credit limit and late on payment. They were told they couldn’t make any more purchases at that time.
“You must understand we are never late on payments — it’s one of my biggest pet peeves,” Lee says. “I was mortified. We were in a tough spot. Still, I got some courage together and decided to call our salesman who I had a good relationship with.”
But it didn’t pay off like Lee expected. He was told only the CFO could release a hold on an account. With a lump in his throat, Lee says he began to dial the CFO’s number. He could have backed out but knew he had to face the situation head on. Lee says he feared being told “you’re not a man of your word” — or perhaps something even worse. Despite his fear and discomfort, Lee began telling his story and how they had ended up in a bind.
“After listening to my entire situation — and how I was going to get it fixed — the CFO calmly said ‘Great, I knew there had to be a good reason for this,’” recalls Lee. “He not only took our account off hold but increased our credit line by $10,000 and gave us 30 more days to pay. I was shocked and elated.”
Lee says that as easy as it would have been to blow off the problem and send his crew somewhere else for material, his conscious wouldn’t allow it. He knew he had to face his trial and explain how he intended to deal with it.
“He later told me that just the fact that I called him personally to talk about the problem rather than ‘hiding’ was about 80 percent of the reason for his leniency,” Lee says. “My reasoning was only about 20 percent. That taught me a few really important lessons that day.”
- What’s In My Truck: Chris Lee, Earthworks
- Like a Boss: Handling a Workforce Shortage
- How EarthWorks Markets to Luxury Commercial Clients
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