In business, money, ramblings, therapy on January 5, 2014 at 6:44 am

I own a business. I have two minority partners. I started it a couple years ago with a different partner, a friend. We will call this fellow Bob. Bob’s friend Barney was where our business opportunity started. He had a larger business and wanted a smaller independent business in a specific market. He though Bob would be good at it. Barney thought it would take $10k to start the business. I ended spending closer to $20k to get the business started and another $5k to move back to the US. When I got back I was told that Barney had also spent money to get things going. I was told this number was between $6k and $8k and that I would be provided with all the receipts. I said that we would try and get him paid back but I was a bit alarmed that the $10k start up actually cost closer to $28k. In the mean time Bob has realized he didn’t like the business and owning a company means that you have to do a lot of work. It isn’t just ordering around other people. He essentially threatened to tank the business unless he got bought out. He didn’t bring any money to the table in the first place. He was supposed to be bringing managerial experience and time (while I was still working my day job on another continent). It turns out he was pretty worthless on both counts and I keep learning about stuff he lied to me about. Bob wanted $15k to walk away. At this point I don’t have $15k. I have about $5k. I use that and I borrow money from family to come up with the rest. Bob is gone.

Bob and I had a friend in common. We will call this friend George. George was between jobs and driving around California in a beat up RV with his girlfriend (how about Abby for the girlfriends name) at the time. While I was still out of the country Bob had asked George to come help out getting the new business up and running. George and Abby drove down and helped Bob out. When I get there it turns out that Bob wasn’t paying George or Abby and he was requiring much more out of them than he was out of himself. Most of this comes to light when Bob leaves. Because George and Abby had helped out I gave them the opportunity to buy into the company. For $15k (the amount I paid to get rid of Bob) the could become %50 owners. We agreed they would have 2 years to pay off the $15k. In the mean time they would be treated like half owners and they would be paid as half owners. This was a mistake. I will never do this again. I tried to do the right thing by the people who did the most to help while getting everything up and running. It was still wrong.

The first year we made decent money. We spent some that we shouldn’t but we had every expectation that things would continue in the same vein. Barney did not get paid back. He didn’t get any receipts to me until after the summer rush was over. During the winter we broke even most months and lost a little bit in February. We had enough put away to survive the winter and handle a couple of emergencies. The second year the money was much worse. The business still made some money but not enough for the good times to continue. I had planned on paying Barney back in whole over the summer but we just never had any real extra money. We were paying our bills but not making any extra. In the meantime the building our business is in has problems. Much of the work that Bob and Barney had done was done very badly and sometimes with the wrong supplies and parts. I am spending money having to redo everything that Barney had contributed money for. We survive the summer but winter is coming. George has been pretty much worthless through most of this while Abby has worked hard but disagrees with me about everything and wants to fight about it. Combined they have paid $4.5k of the $15k they owe.

Winter is here. We are making enough to cover the business’ operating expenses but not enough to cover our expenses. I make just enough to pay my rent but nothing else. Barney wants his money. He now claims that we owe him $13k. Now is when I start hearing about stuff that he paid for but I was told lies about from Bob. I had already decided that I was done at the end of the next summer. I would use whatever money we made over the summer to pay off the company credit card and any other bills that I could. When my apartment lease was up at the end of the summer I was leaving. If George and Abby wanted the company they could have it as long as my name was off of everything. Barney shows up out of the blue and wants a meeting.

While talking to Barney, he asks if I really want to keep doing this. I tell him no. I am ready to leave at the end of the summer. He offers me $25k for the business and we forget the debt to him. I said that I have partners and I need to know that they will be taken care of. Barney says he will talk to them and offer them jobs with the opportunity to buy in to his business. I suggest that the $4.5k George and Abby have already paid in might be transfered to Barney’s business. He says giving them a partial stake worth that much as part of the deal is a possibility. He agrees to meet with George and Abby so that they can talk and hammer out their side of the deal. Getting the three of them together was like pulling teeth, but it finally happened tonight.

I went to meet with George and Abby after their meeting tonight and find out how it went. George is pissed. He says he refuses to work for anybody else and will only work if he is the boss. He is pissed that Barney wants more than $15k total for him to be a %50 owner. Barney also (quit rightly) wants the money up front rather than payments. George wants the money he gets from this business so that he can continue to work on other projects. He doesn’t do anything for the business at this point accept the bare minimum expected from an employee. It sounds like he is trying to tank the whole sale while blaming this on everybody else. He keeps talking about all he has done for this business and how terrible it will be if he doesn’t get a %50 ownership out this deal. It’s my fault apparently. He has been paid as a %25 owner (Abby was paid for the other %25) while he only paid for about 1/3 of that over 18 months or so. I don’t see where this sense of entitlement comes from. I’m ready to sell the entire thing regardless at this point. I’m so pissed. I try to take care of these people and they just use the opportunity to stab me in the back and blame me when things don’t work out perfectly. Opening a business is risky. I knew this going in. George and Abby were told this when they were offered a share. Coming out of this with no debt is not the worse thing that can happen. They were paid for 2 years. They got to live in a beautiful part of the company and I hope learn a lot about business in the process. For George to tell me that if I sell this business that he has gotten nothing out of this after all his hard work is such bullshit. His hard work lasted all of a month and since then he has been a burden, not a help. He was paid and I tried to do right by him once again even though it screwed me when I did the first time. The only person coming out of this with less than they went in to it is me.

I can’t afford to walk away from this company right now. I have a lease I can’t afford to break. I have some debt on a company credit card. I owe Barney money. If I sell the business to Barney that gets me out of the money I owe him but not out of the company credit card. Each of the three partners has about $2k on the card. George has the most. Abby and I are probably about even. The card is a company card but was opened in my name. I know from past experience that this means I am responsible for this card, not the business. So it needs to be paid off and the account closed or at least my name taken off of it before I leave. I still owe a couple thousand on the $10k loan that was taken out to buy off Bob. I could use the money to pay off all this other stuff and walk away. But I can just as easily pay off Barney over the summer and let George and Abby have the business (and any other debt it has as long as my name gets taken off of all the credit cards and bank accounts) after August and walk away. Either way, I’m out and I have no money. The best option for me is to sell the business at the end of the summer as I originally discussed with Barney. I use the summer income to pay off the credit card and take the $25k on my way out the door. The company pays off George and Abby’s personal debt on the credit card in exchange for their shares in the company. They come out of it square. Nothing gained, but nothing ventured either. I come out behind no matter what. But at least with some money in my pocket I will be able to do something else. I am so pissed tonight after talking to George that I want to just kill it all right now. Declare bankruptcy on the company and walk away. I won’t, but God do I want too.

Barney wants a meeting tomorrow. I don’t really know what his take on the talks today is. I don’t know if he wants to wait till after the summer is up. It didn’t sound like that was his plan after talking to George. But I can’t really except anything George has said at face value right now. If he wants it right now, I need $55k. As the sole owner of the business he should more than make that up over the summer. That would let me pay off the credit card and break my apartment lease. I would pay George and Abby back their $4.5K so that they have some money in their pocket to survive off of. George has expressed interest in the corporation I formed. I would be happy to remove myself from that and give it too them as part of the deal as well. Once I’m out I don’t really care what happens to it.

I wasn’t going to write up most of this. I was planning a blog on the final deal and maybe some of the behind the scenes stuff and lessons learned. But nothing personal. Nothing somebody could look at and say “he is talking about me. and he isn’t being very nice.” But I was so angry about everything tonight on top of the stress of dealing with this day-to-day that I needed to get it out. There will be another blog or two on the subject I’m sure. But for now, I’ll let this stand as it is. I hope everybody else’s new year has brought more promise than mine has…


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