December 13, 2010
Dear Friends and customers,
This is the last calendar you will receive from Household Building Systems, Inc.
No, we didn’t succumb to the recession, although a 75% drop in business for three years
qualifies as more than a recession in my book. In fact, we came through better than most,
and throughout it all, we have paid all of our bills in full and on time. I’m kind of proud
of that achievement, and, I think, justifiably so. Our biggest challenge has been dealing
with those who did not pay their bills and who did not manage their affairs in ways that
would allow them to keep their promises. These are people who, in the good times, were
far more successful than me.
Yet, time and the stress of the past few years have taken their toll on me. In running my
life and my business, I have always wanted to focus my attention on activities that were
worthwhile, challenging and fun. As part of keeping business fun, one of my goals was
to grow the business large enough so that I did not personally have to deal with
government regulations, bureaucrats and demands. I wanted to be big enough to be able
to hire someone else to deal with all that. And, for a while, I succeeded. At our peak,
Household Building Systems employed 44 people working two shifts.
We’re considerably smaller now, so I personally have to deal with, for example, the new
regulations imposing higher payroll taxes and greater reporting requirements. The new
health care program did that. It also added new 1099 record keeping and reporting
requirements that apply to everyone I do business with. Then there’s new employee
documentation, reporting and record keeping rules I must learn and comply with. Our
government can’t decide whether to deport illegals or give them free health care, Social
Security benefits, free lunches in schools and in-state tuition rates in college. Yet, if I
give one of these people a job, I can be held criminally liable. I’m tired of this. I want
out.
When I started my business twenty five years ago, the state would allow me a tiny
smidgen of compensation for collecting sales taxes on their behalf. Today, businesses are
pressed involuntarily into the service of the state without any compensation, and, further,
they are held responsible for keeping up with constantly changing laws and definitions.
Woe unto thee who makes a mistake, for thou shalt have to cough up yourself the taxes
you should have collected from someone else, plus pay penalties and interest upon the
amount you failed to collect. I’m tired of this. I want out.
One of the most amazing pieces of correspondence I ever got in my 25 years of running
the business was a letter from the state that began, “Storm water runoff is now a
permitted activity…” What a marvelous piece of government doublespeak! What it
really meant was that I needed a permit to allow rainwater to run downhill. My heart
sank as I contemplated the implications.
No simple piece of paper was this permit. I was first required to have a comprehensive
contour map of my property drawn up showing all points of water ingress and egress.
Then I was required to go out in the rain after it had been raining at least an hour and had
accumulated at least a half-inch of rain, but no more that two inches, and collect
representative samples of water from each point of ingress and egress. I was told I had to
do this three times at periods separated by at least a week, and that I had to label the
containers and begin a documented record of possession as this stuff began its journey
through the labyrinth of government review. I was told that, to get the required permit, I
must have the material tested (by a government certified independent lab, of course), and
submit the reports with the specified fees. I must also maintain the samples in a secure
location with full documentation should the government decide to do an audit.
Then the letter went into the penalties for non-compliance. I don’t remember the
specifics, but I do remember that they were draconian and sent shivers of horror up and
down my spine. In a nutshell, it proffered the likelihood that a lifetime of work could be
wiped out at government whim. All because I take sticks of lumber and fabricate them
into something useful that, ironically, will keep the rain off of people. I’m so tired of
having to deal with this kind of stuff. I can’t live this way.
The affronts go on and on. In my efforts to grow the business I found that, to get a loan, I
would need to get an environmental audit costing thousands of dollars, and that I would
be held accountable for the actions of an owner who died decades before I bought the
property. The laws holding me (or the bank if they held the property as security)
responsible for people I never knew were enacted after I had purchased the property and
started my own business. This continues to be profoundly depressing.
I expanded as best I could with a minimum of borrowed money secured only by my
personal credit, and carried on. It took much longer to grow the business under these
constraints.
At one point, I had the bright idea of building a “front office” and adding flex space
behind it to house small businesses that would have their administrative needs serviced
by the “front office.” By adding buildings incrementally, I could grow with limited
capital. However, as I explored the opportunity, I found that required highway
expansion, installation of curbs, gutter and sidewalks, and a plethora of landscaping,
signage, handicap access and other requirements would consume all of my available
capital before I could get even the first building up. The project died aborning. The
usurping of startup capital by overwhelming government regulations and requirements
that add nothing to the business continues to hinder entrepreneurial vigor. Government
continues to stack the deck against the individual entrepreneur. Why even try?
Business used to be a matter of managing labor, materials, distribution and capital. If you
could find a way to produce something of value and deliver it at a price that was
competitive, you could launch a business and have a go at your own little piece of free
enterprise. The world has changed. Today, the demands of compliance with government
regulations have overwhelmed the significance of the four basic tools of business. The
demands are never ending and continue to mount. It is exhausting. The busywork of
compliance has taken the fun out of building and running a business.
Going forward, I will be working on a one-man business that has no employees. I will be
promoting an idea rather than making a product. The technology I will be working with
has the potential to revolutionize the custom home building process. However, to yield
its full potential, it requires that it be used by a network of professionals in many of the
trades engaged in building a custom home. To get this done is an exciting challenge that
can yield breakthrough results. More importantly, it requires no government approvals,
no landscaping plan, no fees and permits, no sidewalks or sewers. I think it will bring the
fun back into building a business.
Household Building Systems will continue to build trusses under a new name, Peak Truss
Builders, LLC. The business will be owned and operated by Le Greene, who is
experienced in the construction industry and who, coincidentally, is the same age I was
when I started the business on a vacant lot twenty five years ago. He will bring a young
man’s energy and enthusiasm to rebuilding the business from the depths of our current
recession.
There is definitely a future for the truss fabrication business. I have it on good authority
that people still prefer to live indoors. The slowdown in household formation, a key
metric for the building industry, simply means that demand has been accumulating. The
population has not stopped growing. When the surge finally breaks loose, the spectacle
will be awesome to behold. We are at the very end of a buyers market, because, for the
next decade, production will not be able to keep up with demand.
So, thank you to everyone who has helped me and Household Building Systems, Inc.
become an active and contributing part of the community where we operate. We leave
the scene with an excellent reputation in our industry, and we bequeath to Le Greene an
efficient and effective professional organization with which to make his own mark in the
world. I wish him success and prosperity.
William A. Rousseau
