From Bankrupt Dumpster Fire to $12 Million: My Crazy Business Turnaround Story

We've all heard the saying, "When life gives you lemons, make lemonade."

But what if life hands you something far worse, like a raging dumpster fire? What do you do then? You fight the flames, gather the wreckage, and rebuild from the ground up with a solid business turnaround strategy.

That's exactly what I did, and today, I'm here to share how my first venture into home building turned into a nightmare—and how I managed to rise from the ashes to create a thriving business worth millions.

So, whether you're sipping your morning coffee or winding down with a glass of wine, let me take you on a rollercoaster ride through the ups and downs of entrepreneurship and home building, complete with some tough decisions, a few laughs, and maybe a lesson or two.

The Beginning: The Rise and Fall of Chasewood Homes

Imagine diving into an industry with no real experience—sounds like a recipe for disaster, right? That's exactly how I found myself at the helm of a home-building company called Chasewood Homes. I was a marketer by trade, not a builder, but the dream of designing and constructing homes was irresistible. I figured I could learn as I went—how hard could it be?

It turns out, it was a lot harder than I ever anticipated.

In our first year, Chasewood Homes did surprisingly well. We were operating out of my garage, building semi-custom homes, and even managed to pull in about $450,000 in sales. Not bad for a newcomer, right? But as the saying goes, "Success can be a lousy teacher," and I was about to get a harsh lesson.

Things seemed to be on an upward trajectory when we were invited to participate in the local Street of Dreams event—a golden opportunity to showcase our work to a broader audience.

We even managed to pre-sell a home to a prominent figure—the mayor of a small town in Washington State, who also happened to be a prosecuting attorney. If there was ever a client you didn’t want to disappoint, it was him and his family.

The Crisis: A Lesson in Lead-Times, Profit Margins and Responsibility

Everything seemed to be going smoothly until one fateful day.

You see, in the home building industry, there are a few critical things you just can't overlook—like your profit margins as well as ordering lumber and trusses for ongoing projects. Unfortunately, I learned this the hard way.

At that point, we had about 22 custom homes in various stages of construction. During a routine meeting, my superintendent casually inquired about the lumber and trusses needed for these projects.

That’s when the bombshell dropped: the person responsible for ordering these essential materials had completely dropped the ball. And by "dropped the ball," I mean she was too busy playing solitaire at her desk to do her job. The result? Massive construction delays, furious customers—and banks threatening to with hold funding which ultimately reduced our monthly revenue by 90%.

Coupled with not keeping an eye on each project’s profit and loss, margins, it was a recipe for a total dumpster fire.

Ultimately, this was a financial crisis that would bring Chasewood Homes to its knees. I needed an innovative?business turnaround strategy.

The Aftermath: Facing the Music and Moving Forward

When your business is sinking, there's no running away from the problem. So, I did what any responsible business owner would do—I put on my problem-solving hat and tried to salvage the situation.

When custom construction lenders smell that a home builder is having some trouble, the first thing they do is stop all funding, which in turn initiates a domino effect. The next domino that falls was our inability to pay sub-contractors and suppliers for work and materials that had already been delivered. Once that happens, they file liens on our client’s property in order to protect themselves. The client is then notified of the lien, which they in turn inform the construction lender, and then we’re dead in the water.

No cash-flow, no work being performed on each of our projects, next thing you know we were in a hellish nightmare… not to mention some of our customers who might have to pay twice for some of the work that was completed on their home.

That included our beloved “Street of Dreams” home, the mayor and his wife which ended up with multiple thousands of dollars in property liens. (Not good)

First, I had to lay off all my employees. It was heartbreaking, but with no money coming in, I had no other choice. Then, I faced our customers, many of whom had liens slapped on their properties because I couldn’t pay the contractors. This wasn’t just a hiccup; it was a full-scale disaster, and I was right in the middle of it.

And then there was the mayor. This wasn’t just any client—this was the mayor and a prosecuting attorney, with more than $30,000 in liens on his brand-new home.

Trust me when I say, I wanted to vanish from the face of the earth. Disappearing wasn’t an option. I lived in the same community as my customers, and there was no way I could look them—or myself—in the eye if I didn’t try to fix this mess. So, I decided to meet with each customer face-to-face, explained the situation, and gave them a plan to finish their homes without me.

It wasn’t easy, but it was the right thing to do.

The Comeback: Building Stanbrooke Custom Homes

After closing the doors on Chasewood Homes and filing for Chapter 13 bankruptcy which meant I would spend the next 4 years making payments, you’d think I’d had enough of the home-building industry. But you’d be wrong. The truth is, there was good money to be made, and I wasn’t about to walk away—especially since I still had a mountain of debt to pay off. My next move would include a well thought out business turnaround strategy.

So, I started a new company, Stanbrooke Custom Homes. This time, I wasn’t going to repeat the same mistakes. I knew I needed a partner who could handle the financial and operational side of the business while I focused on what I did best—marketing and sales. With a growing market, innovative marketing and sales techniques, and pure determination I was motivated to make my second home building company a raging success.

I knew that my blind-spot was finance and administrative operations… so I began recruiting an investor. By the end of my first year, we had inked $2 million in signed contracts with new clients.

Enter my business partner, a former CPA with a sharp mind for numbers and a knack for day-to-day operations. Together, we built Stanbrooke Custom Homes into a powerhouse, generating between $600,000 and $700,000 in monthly revenue. In year three, we generated over $11 million in revenue and our company was ranked the 6th place in Washington State’s 100 Fastest Growing Companies by the Puget Sound Business Journal.

I can attribute much of our success to some simple lessons learned from Chasewood Homes… here’s what we did:

• PROFIT MARGIN - Ensured our profit margins were healthy by properly setting our retail pricing based on our actual hard and soft costs
• TRADE RELATIONSHIPS - Established working relationships with reliable, competitively priced sub-contractors and suppliers
• MANAGEMENT - Put in place a construction manager with the requisite skills for managing project budgets, timelines and proper material lead-times.
• MARKETING - Created innovative marketing campaigns that truly differentiated our company, it’s products and customer service
• SALES - Hired dedicated sales teams, gave them extensive training, and put in place Salesforce CRM tools to manage incoming sales leads and proper follow-up.

But that’s not the end of the story. Remember the mayor? The one with thousands of dollars in liens on his new home? After four years of making payments to the bankruptcy court, I was only able to payback a portion of his property liens.

His situation weighed heavily on me, even as I built my new company. So, after a few years of success, I reached out to him and offered to send him and his wife a final payment that virtually closed the gap as a gesture of goodwill. He appreciated the effort, noting that I had fulfilled all my bankruptcy legal obligations, but it was the moral gesture that truly mattered to me.

Lessons Learned: The Highs and Lows of Entrepreneurship

If there’s one thing I’ve learned, it’s that entrepreneurship is not for the faint of heart—especially in an industry as complex as home building. There are a million moving parts, and if even one of them goes wrong, it can derail your entire operation. But that’s also what makes it so rewarding.

Here are a few key lessons I’ve learned:

1. Build the Right Team: I’m a marketer at heart, and while I could sell homes, I wasn’t equipped to manage the operational side. Bringing in a partner with complementary skills was the best decision I made the second time around.
2. Own Your Mistakes: When Chasewood Homes went under, I could have walked away and left my customers in the lurch. Instead, I faced them, owned up to my mistakes, and did what I could to help them finish their homes. It was hard, but it was the right thing to do.
3. Cash Flow Is Crucial: In the home building industry, cash flow is everything. If you don’t have a steady stream of income, you can’t pay your contractors, suppliers, or even your employees. Keeping a close eye on your finances is vital to staying afloat.
4. Learn from Your Failures: Chasewood Homes was a disaster, but it taught me invaluable lessons that I carried into Stanbrooke Custom Homes. Failure is painful, but it’s also a powerful teacher if you’re willing to learn. It’s like going to a university!
5. Do the Right Thing, Even When You Don’t Have To: Legally, I didn’t have to reach out to that former customer and offer him money years after the fact. But morally, I felt it was the right thing to do. It’s actions like these that define your character and set you apart as a business owner. I’m no hero, trust me. But when your gut tells you to do the right thing, the legal system is not part of that equation.

The Power of a Second Chance

As entrepreneurs, we all face challenges that test our limits. Sometimes, we fail spectacularly. But it’s what we do after that failure that truly matters. For me, rebuilding from the ashes of Chasewood Homes was about more than just making money—it was about redemption, growth, and proving to myself that I could succeed where I had once failed.

If you’re going through tough times in your business right now, remember this: You have the power to turn things around. It won’t be easy, and it may require some tough decisions, but if you stay focused and learn from your mistakes, you can rise from the ashes stronger than ever.

Ready to Take Your Business to the Next Level?

Entrepreneurship is a wild ride, full of ups and downs, but with the right mindset and strategies, you can navigate the challenges and come out on top. If you’re ready to take your business to the next level, sign up for my newsletter. I share insights, tips, and stories like this one to help entrepreneurs like you build, grow, and thrive.

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Jerry Suhrstedt | #startup #dumpsterfire #businessturnaround