Free Fahrenheit 1600 (Victor Kozol) by Jerry Weber Page A

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