Monday, June 27, 2011

Thirty Years Of Jobbers - Chapter 1.7

I had already envisioned my scrawny carcass dangling from a grotesque, mesquite tree in a West Texas sandstorm; so, taking that skimpy ledger book back to my room at the Holiday Inn, I spent the next three days and nights trying to figure out how all of those pieces had to fit together to form a complete system. Armed only with my wits and a college-level text book on accounting, I wasn’t about to let it get the best of me.

After twenty-four hours without sleep, I crashed. As I drifted off, I was thinking about my programs, the figures in the ledger books, and what I had learned from studying the college textbook. I began to realize how the processes came together. It all started to make perfect sense. When I awoke the next day, I began to assemble the puzzle. If it hadn't been for that small incident, I often wonder if I would have ever been able to write the convenience store programs and gone on to add the additional processes that made the system complete.

That particular jobber was a father/son business, in which the son had recently taken over the operations of the company. The father had started like most jobbers of his day, as a hard-working service station owner in a small West Texas town. Later, he became an agent for his supplier, and in the mid-seventies his supplier financed his bulk-plant operation.

With a college degree in journalism, the son's interest was to move the operation from a fifties style manual bookkeeping operation, to an eighties style powerhouse that he correctly perceived as being the only way he would be able to survive the coming years.

While his offices were more modern than David's and his business was five times the size, his accounting processes were obviously inferior to David's. Unlike most children that ended up with their father’s businesses, he was smart enough to see the handwriting on the wall. Failure was looming on the horizon. Growth was unavoidable, but uncontrolled growth was suicidal.
The father steadfastly refused to believe a business as complicated as his could ever be handled by a machine... a sad contrast to the stark reality - it is because of these machines that many jobbers were able to survive. The father hated the idea of ‘change’. After all, he had built a very successful business already… why change anything?

One of the greatest disagreements that occurred between the father and son centered on the father’s great aversion to charging interest to late-paying customers. He was convinced, if interest were charged, the son would drive all of his customers away. The son, on the other hand could see the customers were using their company as a bank and asked the question, “As long as we continue to offer interest-free loans, why would anybody want to pay their bills at all?” After a much heated debate behind closed doors, the son won his father’s permission, and we began applying interest charges to "most" of the customers.

In reality, what did happen was the customers fully expected the free-ride to end someday and only one customer came to complain. His comment, "You can charge me all the interest you want, but I ain't gonna pay none of it." He kept trading with the jobbership nonetheless.

At that time, charging interest to late-paying customers tended to reduce the collection period somewhat, but the majority of the customers simply ignored the charge and deducted the interest from their bills before they sent in their check. But the point had been made.

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