Over the last couple of years I have been on a long slow train wreck called Lima’s Gallery 309.
In the year 2000 I decided to take my knowledge of construction and start a handyman business. All of my life I had wanted to be in business but had never been able to come up with what kind of business I wanted to be in. My problem from the beginning was that I did not really want to be the guy swinging the hammer. I wanted to be the manager of the business. I started advertising for bigger jobs and hiring employees to do the work. Problem was, I sucked at bidding, managing the employees and doing paperwork.
After a couple years I was bankrupt and a lot of clients lost the money they had given me as a down payment when they signed a contract with me. Although defeated, I could not admit defeat. I tried starting over again and ended up having a client press charges on me for not finishing their job. I became a convicted felon and did time in prison.
I went from business owner and entrepreneur to odd jobs then making pizza and flipping burgers for about 5 years.
Selling Storage Sheds
A couple of years ago I was offered the chance to sell storage sheds built by an Amish company here in Ohio. The numbers looked good and being the ultimate optimist I quit my job as a cook and tackled the shed sales full time.
The initial location did not work out so I so I set up a new location in the parking lot of a local Flea Market called Gallery 309.
I liked the new location as it was right across from the Allen County Fairgrounds in Lima Ohio. The Allen County Fair is the largest fair in the state of Ohio including the Ohio State Fair. Hard to believe that a county fair can draw more than a state fair but it does and I figured the site would be a good one for selling storage sheds. As a bonus the Flea Market was located right next to a Tractor Supply retail store, about a block away from a Wal-mart and on one of the busiest streets in the county.
How could I go wrong?
After about a month sales were still flat so I started selling BBQ chicken on the weekends. That did not generate much money, but it was better than nothing.
In the mean time I was getting to know the vendors of the Flea Market. It turns out I had located in the parking lot of a Flea Market that was barely surviving. The owner of the market, Hippie Mike, was on disability and had moved into a back room in the warehouse as he could not afford his apartment and the business.
The Flea Market was in an 11,000 square foot metal building located on about 2.5 acres with a paved parking lot. A little less than 4,000 square feet of the building was rented out. Vendors would spread their products out in the empty space to make it look like the store was fuller than it actually was.
I did not spend a lot of time inside the building as I did not want to miss customers that might drop by to look at the sheds. When I started selling chicken I got the chance to get to know some of the stores vendors. Once word got out that I had sold at various Flea Markets around the country I started getting involved conversations about the business and how to make it better.
Right after I had moved the storage shed lot models to the site, Hippie Mike had gone into the hospital. He was deathly ill. His friends and fellow vendors ran the store for him for a couple of months in hopes that his health would improve and he could return to running the business.
One day I was informed that the business would likely have to close down. The vendors were told that the doctors did not expect Hippie Mike to live. His lease was up on the building and if someone would not sign a new lease, the vendors would have to start moving out.
Taking Over Gallery 309
A couple of the vendors asked if I would be interested in taking over the business. I was surprised that none of the vendors that had been in the store longer than me were not interested. It turned out that the only vendor interested in taking over the store was widely disliked by all the other vendors. Most of the vendors threatened to move out if he took over.
There were no books to look at or profit and loss statements to examine in order to make a sound decision. The business had existed month to month off of what rent was collected, Hippie Mike’s social security check and the pittance he made by selling books that were mostly donated to him.
Knowing all of this I had to make a snap decision, should I confess to the Amish company that we had made a bad move by putting the sheds on this lot and look for another location or take over the Flea Market and try to make it a profitable business.
The sheds were still not selling but I had hoped that by the time the Allen County Fair and Max’s Flea Market was held, sales would pick up. From September through March the fairgrounds also hosted a Tri-State Gun Show one weekend each month along with a host of other events. I imagined that with all that traffic right across the street, business could not help but get better.
I was introduced to Ron Spencer, the owner of the building. I explained to him that I had sold at various Flea Markets and had a pretty good idea what made a Flea Market profitable. At the time I was flat broke so when he asked how much I would put down on the business I told him “nothing”.
I explained to Mr. Spencer that the business was not earning a profit and that Mike had moved into the warehouse because he could not afford the rent on his apartment along with the rent on the business. I told him I would do everything I could to make the business profitable, but that I would not be setting up living quarters in the warehouse.
The deal was made and I took over the business in the middle of August 2013.
Lima’s Gallery 309 Ltd
One of the first things I did was pay for the business name Lima’s Gallery 309 Ltd along with the limited liability filing with the state of Ohio.
My immediate priority upon taking over the store was to try and get some cash flowing. At that point I had not had a paycheck for a few months and was pretty much out of money. While the vendors in the store were making assumptions on how rich I was, I was struggling with just having enough gas to get there on a daily basis. I could not let them know that their leader was in fact broke. I needed them to have confidence in me or I would have no chance in turning the business around and making it profitable.
One of the vendors attended a weekly auction and got books there pretty cheap. They had donated those books to Hippie Mike for him to sell in the markets books store. They donated to him with the understanding that if he ever left, they would do what they wanted with them. They gave the books to me.
This was kind of a dream come true for me. I had always dreamed of owning a bookstore and coffee shop. I set up a corner selling hot Starbucks coffee. Nothing fancy, just drip coffee along with some flavoring that my daughter sent me from Seattle for my birthday. On the weekends I sold snacks and sold food I had made in crock pots. Most of my food and coffee sales came from vendors and never really caught on with customers. This was very disappointing as this was to have been one of my primary revenue streams.
Immediately after I took over the market a few vendors moved out. Two of the vendors that moved out not only had been on the informal committee that talked me into taking over the store but were also paying for large sections of floor space. Vendors in the market were paying $1 per square foot. Those two vendors respectively occupied over 500 square feet. All told I believe I lost about 800 square feet of rental income that first month.
It also turned out that there were consignment vendors that had positioned products throughout the store in spaces that was not rented out. I spent the first couple of months cleaning the store along with identifying what was on consignment and consolidating consignments to a central location. All told the consignments were taking up over a thousand square feet of space and did not make the store even $100 per month. Most of the consignments came from one vendor and was for the most part used furniture.
I gave the consignments about 4-5 months to see if sales would pick up, when it didn’t I had the owner haul it all away. He was not happy, but I was not going to pay rent for him to have a free place to store products no one wanted.
Marketing Gallery 309
Upon taking over the store I determined I needed two primary things to happen in order to make this project successful: more and better vendors along with more customers.
My answer to getting both centered on marketing. Believe it or not, when I took over the store there was not even a sign that could be read from the street that told the public that a business existed. There was a 5′ tall x 15′ wide sign right next to the street that had been painted white. Apparently a couple vendors had paid for the old sign to be painted over and then could not get the other vendors to donate any money to put up a new sign.
I initially made a 4′ x 8′ sign on the sign board, but it was not really big enough. I could not afford to have a sign made so had to make them myself. A few months later when I had the chance, I made a sign that filled up the sign board and was definitely noticeable
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A couple months into the venture I hired a local advertising company to put together a TV commercial and started doing radio advertising.
One of the vendors had started a Facebook page for the store. When she put me on as an administrator the page had around 700 likes. I immediately started paying for advertising on Facebook in order to get more likes and hopefully more business. Initially the spend on Facebook advertising was not much, less than $100 per month.
Most flea markets I had sold at in the past did most of their business in the summer with outside vendors. I was told that the opposite was true for Gallery 309. In the past they had done most of their business during the winter months and summers were kind of slow.
Initially I had the store open Thursday through Sunday and eventually open every day except Monday.
As we progressed into the first winter my primary concern was to try to rent out more floor space. With the advertising a couple vendors expanded their individual businesses but other vendors would leave. I never tried to keep vendors that wanted to leave. My theory was that if they could not make any money with the products they had and the advertising I was doing, then they never would.
I thought that when the public saw how aggressive I was being with the advertising we would not only get more customers, but that there would be entrepreneurs who would be interested in setting up a business in the store.
While we did get the occasional new vendor there was always a vendor that would also move out.
Facebook Groups and Mass Meets
After a couple months of operation I was told about something called Mass Meets. At that time I did not know anything about it and at first had a hard time figuring out what it was all about.
On Facebook there are a lot of groups. I did not know it at the time but a lot of these groups are used primarily for buying and selling. Kind of like a large garage sale online. In my own area there are probably more than 50 of these groups, some with thousands of members.
In order to make buying and selling safer for the participants, the Allen County Sheriff’s Department had arranged with the owners of the Northland Shopping Center to let buyers and sellers meet for a couple hours in their parking lot every Saturday afternoon to conduct their transactions. The theory being that it would be less likely for people to get hurt or robbed if transactions were conducted in a public setting with lots of people participating.
I was skeptical when told about the Mass Meets but when I went to inspect the situation was pleasantly surprised at the amount of people participating.
I immediately approached the leaders of the various groups and tried to convince them to move the Mass Meets to Lima’s Gallery 309. My main selling point was that during bad weather they could use the 3000 square feet in the warehouse and could stay dry and warm. The only real drawback was that our parking lot was not as big, but I thought it would be a win-win situation for everyone. They would bring in more customers and we would provide security and shelter.
I spent about a month with a few volunteers cleaning out the warehouse. It was full of stuff that belonged to vendors, trash and abandoned stuff. We managed to get about 2000 square feet cleaned out and the rest of the warehouse organized.
Despite getting a couple of the major participants to come over to the store as vendors I was never able to get the group to make the move and eventually gave up that idea.
Christmas 2013
As we went into the Thanksgiving and Christmas season of 2013 I had high hopes that business would pick up. The economy was still under the effects of the recession that had started in 2008, the job market was poor with unemployment still high. I thought we would be in the perfect situation to get customers into the store that were looking for bargains.
My hope was that when customers came in they would see that the store was cleaner and better organized. I counted on the changes made to bring these customers back in on a regular basis.
We did get more traffic, compliments on the way the store looked and compliments on our advertising. Despite all this, I was not breaking even let alone making a profit. By the end of 2013 after running the store for a little over 4 months I was already behind $10,450 on the rent and behind on payments to the advertising companies. The building was heated by electricity and the electric bill during the winter would average $3,000 per month with the heat set as low as I could without customers complaining. A lot of the vendors complained they were to cold, but I could not afford to raise the heat.
In my own personal life I was the sole breadwinner. We were working on getting my wife on disability. After two hip replacements, cancer and multiple other surgeries she was no longer able to work. My personal bills did not amount to more that $1500 per month, but still had to be paid.
One of the vendors worked at a local bargain store as a cashier during the week. She told me that in a typical 8 hour shift during the Christmas Holiday Season she would bring in $15,000. If the Gallery could do that in a month we would have turned a profit.
As the Christmas season progressed it was starting to look like a complete disaster. I had convinced a couple of vendors to help convert part of the store into a consignment shop. They helped run the consignment shop as volunteers and got to sell their products without having to pay rent. The consignments mostly consisted of women’s clothing. I had visited a few other consignment shops, read what I could about the business and it seemed to be something others had found profitable.
During the week that led up to Christmas sales were slow. A couple days prior to Christmas we had a lady that purchased $65 worth of products. At that point I felt like I was doomed! The week before Christmas and the best sale we had was $65!
If my wife and I had not done our Christmas shopping for our grandchildren back during the summer, they would not have gotten anything. As it was, the ladies that helped me run the store were barely able to get there families anything for Christmas.
Winter 2014
After Christmas a crazy thing happened. Business picked up! All of a sudden we started getting more customers into the store. I did not make much more money but a couple of my volunteers made more in the first two months of 2014 than they had ever made on any given couple of months. One of the vendors had been in the store since it originally opened about 5 years prior to my taking over. I was the third store owner and she was convinced that the store was finally on track to becoming profitable.
Some vendors said they were making more money, others groused that they were still not making any money.
As the store owner I was able to pay the rent, utilities and keep the snow plowed off the lot, about $8,000 per month for the first two months of the year.
By the middle of February the store was back to barely making enough to keep the electric on.
By the spring of 2014 It was looking like I would have to close the store.
Boyd Rader
We started hearing rumors that a local entrepreneur, Boyd Rader, was interested in selling his kettle corn in the store. Rumor was he met one of the female vendors during an event at the Allen County Fairgrounds and was so impressed with her that he wanted her to help run his business. The story went from him being interested in selling kettle corn in the Gallery to that he had warehouses full of merchandise he was interested in retailing.
I was skeptical of the story when the rumors first started. The particular vendor associated with the story had started a few stories about me when I first got involved with the Gallery. The story she told about me was that I was a very wealthy entrepreneur, she had known me for years and that I was going to make her the manager when I took over. Needless to say I was a little skeptical about the new rumors.
Eventually Boyd and I met. He had already taken a couple of vendors to his warehouses and they told me he had 4-5 warehouse full of new merchandise that he wanted to sell. Boyd took me out to one of the warehouses and showed it to me. It was probably a 5000 square foot building with 10′-12′ sidewalls crammed full of new merchandise on pallets. There was so much stuff in there you could hardly get in the building or move around in it. He seemed like a nice older guy and I had no reason to believe he was not legit.
The story Boyd gave me was that he had retired years ago from a union job that had paid him in the mid six figures and was collecting a pretty hefty pension. After retireing he went into the business of selling at flea markets and other events around the Mid West. He had an ongoing business selling kettle corn at events all over Ohio and Indiana. He owned a gulf putting range and pro shop. He bought large quantities of items from auctions and sold them to dealers for cash all over the country. In the garage at his house he showed me two large CNC machines worth in the neighborhood of $50,000 each that he used to make items he manufactures out of wood.
Boyd told me, “I’m a millionaire and I will make you money.”
As I got to know him, I believed him. Although 75 years old, he had a work ethic unmatched by anyone I know. I would normally work 6-7 days a week at the store from 7am till 6pm each day. Boyd was the only person I knew that might have worked more hours than me. He was always either at the store, at an event buying or selling or on the road to pick up or do something business related.
When I was 20 years old a wealthy friend of the family had made a similar offer of “helping me make money”. Much to my regret I had turned him down, I was not going to repeat that mistake!
On May 7, 2014 Boyd and I came to an agreement. I would let him use part of the warehouse and from 1/3 up to a 1/2 of the retail floor space. In return he paid me $2400. The deal was that he would have until August 31, 2014 to get his side of the building set up with merchandise. Given that we had information telling us that the local chains of the bargain stores earned daily revenue in the 10’s of thousands of dollars it seemed a smart decision to transition the store from being a flea market to a bargain store that sold liquidations and close outs.
About half the retail store space was empty already, I just had to move vendors and items around so that the Flea Market vendors would be on one side of the store and the items Boyd sold would be on the other, with consignment items and books in the middle of the store.
At the time we struck the deal my largest vendor paid me $800 each month at the rate of $1.25 per square foot. I was basically giving Boyd 3,000 square feet plus warehouse space for 5 cents a square foot per month for 4 months plus I agreed to help set everything up along with getting volunteers to stock, keep the store clean and run the cash registers. He paid $100 cash to one person to work part time on the register.
Our agreement was that come September 2014 I would get 20% of his gross revenue. We also agreed that as the money got better we would buy merchandise with each of us putting up 50%.
By July I was pretty worried that Boyd would never follow through with his promise to “make me money.”
My sole reason for becoming involved in the Flea Market had been to sell the Amish storage sheds. The shed sales was not happening so I started to research what the problem was. Turns out I was trying to sell some of the most expensive sheds on the local market.
In June I borrowed $1,500 from Boyd and gave him a receipt saying it was for rent. I paid him back in July.
At this point I should have closed the store and filed bankruptcy but I still held out hope that by the end of summer Boyd would have his side of the store fully stocked and money would start flowing.
I ended my relationship with the Amish shed company and started advertising sheds for sale manufactured by Gallery 309.
Gallery 309 Shed Sales
Boyd and I took a trip over to the Amish area of Ohio and toured a factory where the sheds were built.
I decided to start selling the sheds with the idea to have employees pre-build as much as possible in the warehouse, then take the parts out to the customers job site for final assembly.
In the factory we toured they were cranking out a dozen sheds or more each day. I figured that if I could get the right crew we should be able to build a shed every day or two depending on size.
From the beginning I had problems with labor. I was lucky if I could get a shed out in a week. As time went on some of the smaller ones got done in 3-4 days.
I sold the sheds at 15-20% less than the Amish company did. My idea was to put the competition out of business by selling massive quantities and eventually becoming more like a factory than a construction company.
September rolled around and Boyd’s side of the store was barely bringing in $1,000 per month with my 20% barely $200 per month. On top of that I had to let other vendors sell their merchandise for free in order to get them to run the store as volunteers.
Bills were piling up and nothing was earning a profit or even coming close to breaking even. By September I was $42,000 behind on the rent and was paying the electric bill on the shut off notice day each month.
Boyd’s attitude had gone from “I’m a millionaire and will make you money” to “I’m doing the best I can. What do you want me to do?”
I was continually trying to find competent carpenters for building the sheds but had very little luck.
By December I had reached the end. I asked Boyd if he wanted the store, he said yes, so I gave it to him. It was reported in the Lima News that I sold it to him. That was erroneous. When the reporter asked me if I sold the store, I said I turned it over to him. I did not want to harm the vendors by saying it was a worthless business so I glossed over the question.
I went into the winter dead broke and owing about 20 customers a shed.
The Demise Of Gallery 309 Ltd.
With a helper I was able to finish a dog house and a couple sheds in December 2014. After that the winter was to bad to try and build anything until the first of March.
Sometime at the beginning of 2015 someone sent me a picture of a dog bed that they suggested I should build and sell.
At the same time I was exploring the idea of selling shed kits. I still liked the idea of building a factory selling sheds so thought that if I could get sales going I could rent a building specifically for manufacturing sheds and woodworking projects.
I advertised the shed kits and dog beds for sale on Ebay, Facebook and my own website for Gallery 309.
Before I knew it I had over 200 orders for dog beds and a half a dozen orders for shed kits.
It turned out that the dog beds would cost as much or more than I had charged in order to ship them so I returned the money for about 100 of the beds from customers located in the south and west of the Mississippi. I figured that I could make the other beds and deliver them on the east coast myself.
The problem was that I had no employees, very little equipment or a factory to build in.
I was confident that as the weather broke there would be carpenters who had been laid off for the winter that I could hire. I scouted out buildings that I could rent and selected a couple good locations.
As spring broke I hired a crew and got them started building sheds. I had expected that I would be able to find a couple journeyman carpenters but that was not the case. Everyone I tried to hire had to be trained starting with the basics. I went through quite a few people during March – May of 2015. Guys would tell me they had construction experience but nothing seemed to work out. Between slow and poor quality workmanship and bad weather it was a disaster.
I had hoped that by the end of May the shed side of the business would be running smoothly and I would be able to concentrate on getting the dog beds manufactured and delivered.
By the end of May I realized that the crew I had working on me would probably never be able to build at the speed and quality needed in order to make the business viable.
All told, at this point I was in the hole over $100,000 with no way in sight to get out of the hole.
Receipt for filing Chapter 13 Bankruptcy
On June 5th I paid a local Attorney, Athena Nyers a down payment so that I could file a Chapter 13 bankruptcy. My hope was that if I could get the paperwork filed and agree to pay everyone I owed back that I would not end up in jail.
The first appointment I had with the attorney she could not be there as she had been called into court. My second appointment she could not make as she had to take her husband to the hospital in Cleveland. She finally made the third appointment, talked to me and told me what paperwork she would need to file the Chapter 13.
On the day of my appointment I found out there was a warrant for my arrest in Logan County, cancelled the appointment and turned myself in. I was told to expect indictments from at least a half a dozen counties as well as a Federal indictment. I let the attorney know that I would no longer need her to represent me on a Chapter 13 Bankruptcy as it is not possible to work and make payments from jail.
As I write this I expect to be picked up any day by another county or on Federal charges.
I would like to apologize to everyone that lost money and was hurt by my actions on this venture. I never set out to loose or fail in this business. It was not my intentions to take money, goods or services without giving in return what was paid for. I have always been an optimist and have always believed that if I worked hard enough things would eventually work out.
At this point it is painfully obvious that I was wrong.
I wrote this post so everyone would know what happened to me and to Lima’s Gallery 309. I wrote this for everyone whether or not I owe you in particular or you are someone that can learn from my mistakes.
If you are a client and want to press criminal charges against me contact Christine Whitsett. Her number is 1 937-935-8371, email is ourblessingsphotography@yahoo.com
She is leading the way in making sure I am criminally charged with her Facebook group called the “Gallery 309 Victims“.
Again, I apologize to everyone, but realize that an apology is not enough in a situation like this.
