by Jerry Weber
After that at $10,000 a pop for each cremation, the operation will be on a pay as you go system. Sam tells the group that we have to pay that much because Victor will not be able to stay afloat with his payments, as the entire cremation project makes no financial sense for Victor without the extraordinary help from the organization. This will also keep Victor from ever thinking he doesn’t need our business. Carlo the Don has one important question, “How can we trust Kozol, an outsider? What if he says no to your scheme and goes to the cops?”
Sam tells Carlo, “I will be responsible for Kozol, if you greenlight the project.”
He ends his comments with “No risk no reward.”
After receiving an affirmative vote, Carlo reminds Sam whose idea this is, and who will be responsible if the project misfires. It is now 10:39 p.m. and the meeting is adjourned.
CHAPTER 14
Victor and ‘Firestop’
Sam now must turn his vague plan into concrete results. This will be the first big project that he is doing for the organization of his own initiation. Sam has to keep Victor from reaching out to other sources like his parents for help. He has to give him just enough so that Vic doesn’t go under before Sam even has a chance to enlist him into the plan. First, Sam knows he just can’t pitch Victor directly with this scheme or he risks his going to the police. He needs to ensnare Vic in a methodical and patient way. This has to be done correctly, Sam thinks, I get one chance to get this right. Since I don’t know any other failing funeral directors, I need Victor.
Sam begins by calling an old associate from Brooklyn, Louis Premes. Lou is presently working as a pit boss at the blackjack tables at the Mountain Resort Casino in the Pocono Mountains in northeast Pennsylvania. Lou would rather be back in New York, but he fell behind in some heavy gambling debts with another family from Queens. Word was out on the streets of New York that it would be healthier if he wasn’t there at this time. So wanting to stay healthy, Lou was breathing the fine clean air in the lovely Pocono Mountains of Pennsylvania.
Sam, through his contacts, obtained Lou’s cell number and called in a favor. He needed Lou to assist a ‘mark’ he would bring into the casino to make some money. Lou could do this because it was only a scam for $5,000. This money Sam would reimburse so Lou could return it to the table. He then promised Lou $1,000 for helping.
The stage was now set to make the call inviting Victor to meet Sam in the Poconos for an old time’s sake reunion. Victor took the call in his present state of depression without emotion. He really didn’t feel like setting foot into another casino or for that matter wagering the kids outside for ice cream.
Sam says, “Vic, don’t say no, I really enjoyed your company in Atlantic City and with the bonus I just got, I am buying dinner and drinks for old times’ sake.”
Victor does what he always does in these cases, first vacillates and then says yes. “Okay Sam, next Friday at 6:00 p.m. I’ll meet you at Mountain Resort.”
Sam drove west across Route 80 from New York that Friday, taking note how direct Route 80 was from the City to Pennsylvania. Two hours from the City and forty-five more minutes to Duryea, not bad he figures.
Sam, of course, already knew that Vic was at the end of his financial rope, and when he saw how depressed his old friend actually looked, he was sure with some smooth finessing, he could pull this off.
“How are you Vic,” Sam calls out from the bar.
Vic smiles and tries to put on a happy face for the occasion.
“Let’s get something to eat, I’m starved.”
He guides Vic to Sherali’s Steak House which is right behind the gambling tables on the main level. Two hours later, after much small talk about sports and other subjects, to keep Vic’s mind off of his problems, they head for the casino floor. Sam steers Vic towards Lou’s blackjack area. Upon arriving at a table, Sam pulls out of his pocket $100 worth of chips and hands them to Vic. “Here, use these they’re lucky.”
Victor isn’t feeling lucky, but in ninety minutes he has turned the $100 into $5,000. For each time the dealer won a hand, Vic won three. Vic picks up the chips and says, “Look Sam let’s at least split this, after all it was all your seed money to begin with.”
“Not on your life Vic, it’s all yours, you made it happen,” Sam responds.
“Oh by the way Vic, now that I am this close, how about showing me your funeral home?”
“It’s hardly worth you driving up to see my little place Sam.”
“Tomorrow, I have business in Scranton. How about I call you after lunch and update you on a timeframe I can be there?”
“Okay Sam, if you want to be bored I can’t stop you; come on over.”
With that Vic and Sam take leave of each other.
Vic was feeling much better when Sam arrived the next afternoon. After all, he now had enough money to last out the month, and then he would worry about what comes next. Sam seemed to be very interested in the place considering he was a big ‘city slicker’ where they had funeral homes that did more funerals in a morning than Vic did in a couple months. Vic dutifully showed Sam everything. Sam seemed disappointed that even though this was a small town there was little space around the funeral home, which was just a large old home in the middle of town. In fact, there wasn’t even a garage.
“Hey Vic. Where do you keep the hearses and cars?”
“Well when my father and grandfather were running it, they kept their cars in the old boro maintenance garage which grandpa bought sixty years ago from the boro.”
“Still have it Sam asks?”
“Sure, but it’s down at the end of town.”
“Can I see it?”
“I don’t know why, all you will see is our old hearse and limousine that we haven’t used for years. See, for the last several years we rent late model Cadillacs from a livery service in Scranton for each funeral. It just doesn’t pay with our low volume to own the cars anymore.”
“Hey Vic, I love old cars, let’s go see.”
On a dead end street with no other homes or businesses sat a cinder block garage capable of holding ten cars. The property was surrounded by a chain link fence and the entire place was in disrepair from years of neglect. Victor has a hard time getting the key in the rusty lock, but finally the door swings open with a loud creak, like out of a scene from a horror movie. The look was eerie. Inside the dark, leaky, and musty building were two cars, a hearse, and a limousine from the 1970s sitting on a cracked concrete floor. In addition, some junk was strewn around, none of which seemed to be of much value.
Sam’s eyes lit up. He is thinking, this place could hold several cremation retorts and it’s big enough to pull a van in and close the door for total privacy while unloading. Better still there is no one living nearby to see the traffic coming and going. In fact it’s much more private than the funeral home back in the middle of Duryea. It looks like all of the pieces are coming together here. But, Sam knows he must wait for the proper time to spring his proposal. Victor has to once again run out of money, and this time Sam will be waiting. Victor and Sam shake hands and say their goodbyes and promise each other to stay in touch.
CHAPTER 15
Throwing Out the Bait
Sam was in a conflicted mood after leaving Victor and Duryea behind. Here was a young guy who never could get it together sinking in a financial morass mostly of his own making. Serge’s reports have reinforced that none of this reflects on any criminality in Vic’s life. He is what you would expect to find in small town America. Sam would rather be trying to do a deal with a shady operator in the Bronx than Mr. Clean in upstate Pennsylvania, but the shady operator in the Bronx didn’t have a funeral home with all of the right pieces to the puzzle in place. So, Sam will have to work around Vic considering his family ties and solid background. He has promised too much to Carlo and the family to fail on this his first very own major project. Sam is determined not to fail.
Sam patiently lets another month go by carefully checking Vic’s ra
pidly depleting checkbook balance which he views online from his office. The $5,000 that Sam engineered for Vic at the casino is now gone and it is time to act before Vic looks for other lifelines.
“Hello Vic, I really needed to call you and see how you are getting along; because in all of our discussions I was so interested in what you did, that I never gave you details on how my specialty works. I operate primarily as a venture capitalist, Vic. My company invests in small businesses that we think have a good chance of turning a profit, even if they are not successful today.”
“Well, you better look somewhere else Sam, this place is rapidly going down the tubes after fifty years of continuous operation.”
“See Vic, this is where the optimist sees the glass half-full and my associates and I are constantly searching for new opportunities. It just so happens that I know this financial trends guru here in New York by the name of Saul. Just coincidentally, while having lunch with him, he is telling me about the great future all over the country for the cremation business. It is already heading for 40% of all deaths and set to climb even higher in the future.”
“Yes, I know all of this from school Sam, but I am too small and too broke to buy the equipment.”
“Vic, that’s where I come in. I make a financial model of how you will grow your business having the only cremation retort in your town. People will like dealing with you for their cremation needs because you have one stop shopping for them. You would be in the black in no time once set-up and running.”
Sam knows in reality that at $400 a pop for doing a cremation wholesale for another funeral home and maybe $750 retail for one of his own clients, supporting a $50,000 piece of equipment would hardly be a good return on the investment for Vic considering the low volume of business he had. In fact, if you factor in the gas and electricity used, the operation would be deep in the red, unless you do hundreds of cases every year.
“Vic, why don’t I have Saul, at no cost to you, do a proforma for your funeral home owning a crematory, and then we can talk about how you can finance it with some upfront loans from my company. Then you can pay it all back with profits from operations.”
“Sure, okay Sam. Call me when you have something, since not much is happening around here.”
“Oh Vic, by the way, we will need your latest financials and tax information to make this work, can you send them to me right away?”
“Yes, I have some stuff here from my accountant, but I warn you it is not very impressive.”
Sam already has all he needs on Vic’s financials in front of him, but he can’t let that cat out of the bag, so he responds, “Okay Vic. You will be hearing from me soon.”
Vic hangs up and his temporary euphoria is soon overtaken by the sodden state of his affairs. He probably will never be hearing from Sam again after he reads these financials, just as well anyway.
CHAPTER 16
Going for the Close
Every aspiring sales trainee is taught first you engage the customer and answer all of their objections, and then you go for the close; you ask for their business. In one short week after their meeting, Sam is back on the phone to set the hook for the close.
“Hello Vic, my good friends in accounting were able to get your proposal together in record time, it’s what friends do for one another, right?”
Vic is stunned; he had no expectation to ever hear from Sam after his tour of his mundane funeral home and decrepit garage coupled with his poor financial statements.
“Sam, I still don’t know, but if you think your idea would save my business, come on over and make your pitch.”
In two days, Sam is sitting in Vic’s cramped office in Duryea with pictures of the cremation retorts and many colorful spreadsheets all showing how much money the crematory would return after expenses.
Sam begins, “In fact, we don’t even have to purchase the thing outright, we can take a five year lease on the equipment and only have to make monthly payments. Money you will generate from operating the retort. It may not be a fortune at first, but you will have a solid second cash flow to augment your funeral business. Your records show, you could really use this injection. It’s a win, win situation for both of us; I get a new client, even if a small one, and you get a chance to finally dig out from your financial problems.”
Vic, like most people, likes the idea of gambling on a business venture with other people’s money. “You mean you will front the entire venture to get me started including enough working capital, Sam?”
“Yes Vic, we know this project doesn’t get off the ground unless venture capital comes to the rescue. No regular bank would ever front this deal without money up front from you Vic.”
“In that case, hand me the contracts and show me where to sign.”
“Okay Vic, I have it all drawn up, first is the retort lease application for $1,200 per month for five years, and second is the loan documents for the $25,000, we think you will need to remodel the garage and get the retort up and running, plus a little left over for working capital. We even got you all of the applications for the federal, state, and local approvals you will need for installing a crematory. You just need to sign, couldn’t be easier. See how simple getting into business with me is; now, let’s go to that great Italian restaurant you were telling me about in Old Forge, I’m buying.”
CHAPTER 17
Onward, Upward, & Downward
Victor has his check for $25,000 and in two short weeks everything is signed and sealed. In another month he gets his approvals from the local authorities to install and operate the crematory retort. Finally, Vic has something to live for. He is going to Chicago for three days to attend a school for operating his new retort. He is also hiring contractors to renovate and repair the old garage so that it can accommodate the new retort and look more presentable. In another month, the retort is in and operating. Victor puts out advertisements in the local papers and church bulletins announcing his new venture, “Duryea’s own crematory.” The second day he gets his first client family from his own funeral home, and is really feeling great about the future.
Like so many business ventures, that are poorly or only half thought out, the flaws in the crematory model were always there, but Vic wasn’t in any mood to look too hard for them. First, many of the townspeople have already written Vic off as a foul ball, not to be considered as their funeral director. Once you lose a client family to another funeral director, as happened with the Makovsky’s, the rest of the extended family will also start going to your competitor. The only other place you can get cremation business is from your competitors or other out-of-town funeral directors.
Here, if Vic would have not been so euphoric about Sam’s great opportunity he could have made a couple of phone calls and found out the stark truth. Competitors rarely will use a crematory in the same town operated by another funeral director. They don’t want the other funeral director to see the amount of cremations they are doing and the type of merchandise they are selling for their cremations. They will gladly schlepp their bodies up to Scranton rather than do business with a competitor. Bottom line, there was no outside business for Vic from the local funeral directors in his hometown.
After two months in operation, Vic has used his new retort all of two times for his own client families. While he grossed $1200.00 for his work, he has already paid out $2,400 in lease payments for the past two months. Added to this are the electric and natural gas bills of a couple of hundred dollars for the retort.
When you carry this loss forward to his losses on the funeral home side, where he is only doing about half the business of his father, Vic is sinking even faster with the crematory. He has $5,000 left from the original $25,000 startup money, but he owes both his father rent, and the real estate taxes on the properties.
Vic sits down and wonders after this initial period, where did I go wrong? Why are the pro forma projections not even near being met on the income side? The only thing he could think of was to appeal to the one guy w
ho got him into all of this Sam, he would have an answer.
“Sam is that you, it’s your buddy Vic, I need to talk to you.”
“Anything for an old friend and client, what’s bothering you Vic?”
“I think I may need more working capital to get the crematory going. Maybe another $20,000 would see me through until the crematory starts pulling its own weight.”
“Well Vic, I didn’t expect this news, this is most disappointing and a serious setback in our relationship.”
“Okay, then just $5,000 to hold me over, Sam.”
“Look Vic, you don’t seem to have this situation under control and even your cash needs are wildly off the mark, I think you should come to my office in New York so that we could hammer out an agreement.”
“Okay Sam, I can be there tomorrow, nothing to do around here, how about 11:00 a.m.?”
Sam couldn’t have been more delighted, Vic is running out of cash about a week before Sam projected it to happen. Sam will certainly be ready with a hammer to bludgeon out a deal with Victor when he arrives tomorrow.
CHAPTER 18
The Hammer
Vic starts out early the next morning. It’s a beautiful fall day. The leaves are just beginning to turn and as he approaches the granite cliffs of the Delaware Water Gap heading east into New Jersey on Route 80, the scenery is even more magnificent. There are golds, reds, and yellow all blending into what could be a beautiful painting. But, Vic is not paying much attention to nature around him.
For the first time he has a certain foreboding about the upcoming meeting in Brooklyn. He knows he was in a real mess on his own accord, but listening to Sam and his crematory advice only seems to have made it worse. Well, Sam got me into this part of my problems, so I will let him get me out. Just a little more working capital would smooth everything over.
