DawgTalkers.net Forums DawgTalk Tailgate Forum Would you be mad? I need some advice!

Hey guys. I usually leave my personal business off this board but since my wife is still at work I feel like I got to vent to someone. So here is the situation I just had to deal with and I am starting to come down from being very angry. I'm trying to put things in perspective now.

Here's the deal:

I work for a Heavy Equipment rental outfit and my Boss and I have been running it for 4 years. Not only have we grown a tight friendship in those years we also decided to open a Family (sports oriented) Hair Salon in the fall of 2006. Due to the fact that the Heavy Equipment rental (in Canada anyways) is so seasonal I have volunteered for the past two years to be laid off and work on our other business venture. This saves him allot of money during the slow months and helps him make it through the winters. The rental business is not managed well by him and every winter he has to take out loans to make it through. However during the summer months when he is making money he never saves in order to get through the tough times. Every summer I've worked for him I keep saying to him that he needs to put aside so much money in order to have something to fall back on in winter. Instead he eats fast food EVERY day and never holds back on anything. For example he complained last month that things were getting tight and then goes out and gets a Jeep Cherokee when he could have gotten a more economic vehicle. All the while he runs his rental outfit I have looked after 90% of the customers while he typically sits around talking about how depressed the business makes him. I have tried motivating him in the past but it has never stuck. On top of all this our business together has just finished it's second year and we have showed a profit in 3 out of the past 4 months which is considered great for a new business started out of scratch. For that business I practically run the whole thing except that his wife does the payroll. It's a very promising business and it's getting better every month. The rental outfit is always on the brink of failure due to many of his poor decisions and his inability to plan ahead. In April of 2008 he hired a "consultant" from the Business Development Bank for $7,000.00 to help with the rental business. Well this guy was hardly ever at the business to help and when he was he spent his days smoking outside and sitting down chatting. I never saw him talking to customers reviewing budgets or anything that would allow him to understand the business. So nothing changed at all except a move into a BIGGER more costly building. So instead of having to make $25,000 a month to pay the bills he must now make $32,000 a month. Well business hasn’t changed much but we were looking forward to the early spring and really felt the move to a more visible area would be better.

Ok so forward to today. My Boss/Business partner/friend asked me to come in today at 9AM (I've been laid off since November to help him out) because this "consultant" from the Business Development Bank wanted to go over things to help with making it through the winter. I feel like this should be a great meeting and may help my boss/business partner/friend strategize the next couple months until it got busy again.

So I come in and greet my boss/business partner/friend and the Consultant (who my business partner knows I dislike because of him basically taking his money for doing nothing). So the consultant starts to talk and reiterates that the rental business is not doing well right now so the Business Development Bank sent him back to us to make decisions for the rental outfit. He explains that he "owns" my boss/business partner/friend because the loans for that business are through the Business Development Bank. Then he proceeds to tell me that I will not be needed back at the rental outfit until further notice because they feel they need another mechanic rather than a customer service agent. This is said even though my boss/business partner/friend is a mechanic and he always handled that area while I handled the customer relation’s aspect. Anyways I look at my ex-boss/business partner/friend and ask him why is this man telling me this instead of you. He says nothing. So I walk out and the Consultant follows me out the door asking me why I can't sit down and have a business meeting without getting mad. Of course I feel like my ex-boss/business partner/friend just threw me under the bus. This guy has reassured me time after time that he will be able to get through the winter...though it will be tough he'll be able to do it. Now I hear that I no longer have a job.

Ok so now I'm sitting in what used to be my office upset about the situation and the Consultant says in a very unprofessional manner that not only will I not be needed back but that my ex-boss/business partner/friend will be selling his shares of the Hair Salon business that we both own. The Consultant goes on to say that if I can't come up with a buyout plan or find another partner buy the end of January then he will find someone himself. Keep in mind that this ex-boss/ex-business partner/friend could have set me down himself and told me but instead he had someone that he knows I dislike tell me instead. Not only that I was given no indication that I would lose my job and that he was selling his half of the business until 9AM today. I got no warning at all from my “friend”!

Sorry if there are misspellings and bad grammar in this post but I am still shaken up and venting. I would like to ask any of you for advice on how to handle this and how you would take it because I 'm at a loss. Any comments are appreciated. Should I be mad or understanding? Right now I feel like my “friend” bent me over and had someone I dislike doing the deed.

Wow,...

Time to get out and startup your own ??

I know several people that have been burned/lost friendships due to business "partnerships." I'm sure many on this board do as well. Might be best to get out without losing too much more. You'd be alleviated of sharing on any future loans. You said the business has been struggling, so it seems it shouldn't be too difficult to cut ties. Is there any opportunity he can buy your shares out of the rental biz (as he wants to do to you with your other business)?

I feel for you MDB - good to hear that other business is doing well (I recall you posting pictures of the salon - wasn't it sports/racing themed or something?).

A couple of things and mostly includes speculative advice...

First, it sounds like this won't financially ruin you...that's good.

Second, buying him out of the hair salon, providing it is and continues being profitable, might be a good course of action. Play hardball on the buyout...if you've done most of the work there, make sure he's just as equally inconvenienced by not profiting from being bought out.

Another direction might be threatening to outright close out the hair salon business if he plays hardball on the buyout (if you can afford that).

On your Rental venture...time to do it yourself. He has consistently made poor decisions...be glad he didn't financially ruin you yet. Find an investor or another partner where you will be able to make the decisions. OR if you think he's so poorly leveraged, find an investor to buy him out completely and take over the rental company.

You should be upset but don't mix the friendship with your business decisions. If he makes poor business decisions, as you've noted, you shouldn't ever be in business with the guy no matter how good of friends you are. One thing is certain...when friends lose money together, they have a VERY high chance of losing their friendship altogether.

Be glad you haven't lost your shirt.

Good luck!

Maybe I misunderstood MDB's post. I thought his partner and the consultant wanted MDB out of the rental business for good - with no opportunity to buy it. In addition, they wanted MDB for buy out his partner's stake in the salon business, thereby severing all ties between MDB and his partner.

Thanks for some of the replies guys. One thing I might not have made clear is that I don't own any of the Rental Business. I am his employee. Our shared business is the Hair Salon. So basically he dropped me as an employee and is selling his part of the business. Both came without any warning at all. It's not like our friendship was getting tainted before this. He basically is allowing an outsider to come in and make decisions for him. The same outsider that took $7000.00 from him early in the year to help consult with his rental business which has resulted in the business becoming even more unstable than it was. So I guess I'm seeing it as he is selling me out in hopes that he can make the rental business work. Not only that but he is having the other person do it rather than being a man and telling me himself. During the whole time this was happening he (my boss, business partner, frined) didn't say anything to me. When I asked to speak to him myself without this consultant being there he ask the consultant if he could and the consultant said to him that he would advise him not to. It may seem like our friendship was not strong but that's far from the truth. We talk everyday and nothing...I mean nothing up until today made me believe we were not great friends that have worked together for 4 years and even became business partners because of the friendship we formed. In the end I think the consultant is telling him to sell his shares of the Hair Salon business so that he has money to get through this winter all the while screwing me over...

In the end I think the consultant is telling him to sell his shares of the Hair Salon business so that he has money to get through this winter all the while screwing me over...

Bingo!

I am his employee.

Can't speak to the right-to-work laws in Canada, but here, you have a right not-to-work.

It would be very interesting, say a year from now, to see how business is without you there.

It will be the same if not out of business. He is selling the only thing with a future in order to survive for a couple of months. Next winter he will go through this again. Only thing is by next winter the Hair Salon will probably be making enough to have provided him with some relief for his family. Next winter he will not have anything. I was the motivator behind both businesses. I feel bad bad that he felt forced to make this decision but in the end he threw me under the bus without any warning.

I'm really confused. He owns a business that borrows money from some type of bank. He then hires a consultant from that very bank who tells him what he has to do, not what he should do. That sounds less like a consultant and more like a boss.

Did your friend lose control to the bank? Maybe he is just too embarrassed to say so? Why else would the business consultant for the one business tell you he will find someone to buy out his part of your guys joint venture?

Offhand, I'd say Bingo.. that guy was never a consultant. The bank took over the business. The fastest way to create a more profitable bottom line is to reduce payroll.

Thats what happened to you.

Wow,,,

First off, can you buy out his half of the hair business? if you can, do it.. Get as far away from that exboss as you can.. run away and DON'T look back.

Second, if you like the rental business, then you have the hardest part of it down pat.. you were the FACE guy.. Hiring a mechanic isn't the hardest thing you could do.

So, start a rental business on your own.

In the winter, when the business slows down, keep the mechanic on payroll, but take yourself off. At that point, you could live off the Salon business.

Then when the rental season comes back, put yourself back on payroll.

IF you can do that all at once, then buy the salon, work your butt off and get yourself in a position to start a rental business. Open up across the street from your ex friend and run his butt out of business...

But that's just what I would do......

Thanks again Guys.

pdawg - You got it. The bank he borrowed money from for the Rental Business is also the same one that we used to help the Hair Salon get started. Go figure...I'm a customer of theirs too!! As far as losing control..no idea. Only thing I knew was that he wanted more money from them to get through the winter and that he had to meet some of their demands to get it. Never mentioned me or our business. He never even asked me if I would buy out our Salon business beforehand. That would have at least been the right thing to do IMO.

SaintDawg - The problem is that the consultant said they are going to hire another mechanic instead. As someone that worked there for 4 years...they don't need another mechanic. So now they will have 2 mechanics and face of the business considering my friend has very little customer service skills.

Damashot - good advice but quite frankly there is no room for 2 rental businesses and I see a big future in marketing my Hair Salon. I'm not in a position to buy out his half right now. I've been thinking that maybe if someone on their side buys his half then maybe that will be for the best anyways. I would then have an actual partner that believes in hard work pays off.

The more thought I put into this the more I realize that in the end this is the best thing that can happen to my business. I'm more worried about finding a job in this recession. I can lose it all if I can't find work.

Understood. I know times are a bit dicey now. Best of luck Dawg.

Are you two 50/50 at the salon? Is it in your operating agreement that one of you can sell your half to just anyone without the other one approving? Do you have an option to get majority control of the business before he sells his part? Has he been footing the bill for any of the salon's expenses? Has he been reaping the profits?

This could get dicey depending on how you two set it up in the beginning. I would check my agreements ASAP.

can you start a business as an all knowing fantasy sports guru? just kidding

Your buddy is in much worse finanical straits then he is letting on, you are just seeing the tip of the iceberg right now... its could very well get worse. I would cut ties quickly as you can.

oh and get a quality attorney

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Your buddy is in much worse finanical straits then he is letting on, you are just seeing the tip of the iceberg right now... its could very well get worse. I would cut ties quickly as you can.

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My thoughts exactly. It sounds like the boss is in dire straits and desperate. I'd just do what he says and leave ASAP to salvage a longstanding friendship.

If the hair salon is showing a couple years of profit, you should be able to put together a nice business plan to take to the bank for a loan to buy it out. Banks would rather see payments being made than try to sell off assetts at a loss. Tell them you'd rather not work with the consultant schmuk.

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I'd just do what he says and leave ASAP to salvage a longstanding friendship.

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Longstanding friendship my butt... that would have been over for me when he had the consultant do the hatchet job on me instead of sitting me down and discussing it himself. Yea, I'd leave ASAP but it would only be with good legal advice, my bases covered as best I could to protect my interest, and I'd walk slowly backwards out the door to make sure he didn't give it to me again just for old times sake. He needs to protect his livelihood, his assets and his family FAR more than he needs to protect this "friendship"...

Good luck with everything.... and I hear you on the "lose it all" thing. Lots of us in in that boat.

Yeah I don't think I can be friends with him any longer. I could never trust him again quite frankly. The good news is I am getting interest in the Hair Salon already and may have a new partner in place soon (who is highly motivated).

I've had some friends in desperate straits that did things they weren't proud of. They turned out to be pretty good friends once they're problems were resolved.