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GOLD! How I Lost a Million Dollars, But Am Happier And Stronger Than Ever

Discussion in 'General Entrepreneur Discussion' started by MustImprove, Sep 24, 2015.

  1. BKMoney
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    I really enjoyed reading the topic as it reminds me of my current situation. Started a company with my best friend at the time and shortly after he decided to work with his father on their family business so I was left all alone. "Our" company was my only source of income at the time and I had put in my last money in so I had to make it work. And I did. Took me 3 years... Now he's getting a nice 6 digits annually while I do all the work. We barely speak to each other these days and he has no idea what's going on with the company. Even though I'm making more money than I have ever made before in my life I don't feel happy with the circumstances and I have listed the company for sale. Hope to find someone soon so I can move on. Moral of the story - partnering with friends is a bad idea. Choose your partners wisely.
     
    lucasb, Huracan, Magneto C and 6 others like this.
  2. Petahh
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    Petahh Contributor Read Millionaire Fastlane

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    Ouch. That sounded like it hurt like hell.
    Oh anyway. Hi I'm a new guy. Heh. Nice to meet you all!
     
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  3. RazorCut
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    RazorCut Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Everyone on this forum would be wise to heed the warnings here. I wish I could have read them a decade ago.

    I've had two partnerships and one near partnership over the years. Collectively 2 of them cost me $30k of my own personal money and many sleepless nights. The other I was given a serious warning over...

    Many years ago I was setting up a business with my cousin. It was a 100 seater fast food restaurant in a prime location in a major city. I was young, unemployed and had no money (absolute zero) but I had hustled and networked and had gotten a promise of some sponsorship money for young entrepreneurs then used that and the contacts of the biggest accountants in the city (who had agreed to work for us for free) to get a fat unsecured loan from a bank, (one of the partners of the firm was close friends with the area manager and he loved the business plan they had prepared).

    The accountants had predicted 1st year profits of £250k which was around $500 or more back then. This was due to the site location and the lean startup costs as I had spent a lot of shoe leather finding all the shop fittings and equipment at rock bottom prices.

    At one of our last meetings with the accountants I was taken aside and told that I should dump my cousin as they thought he was just there for the ride. I was stunned. They were right of course, he had not contributed anything up till that point save for moral support and £60 towards our licencing application. I was so caught up in it all I had hardly noticed.

    Anyway it took best part of a year to set it all up and the biggest gamble was getting the change of use for the building from a clothes store to food use. This took forever as they postponed the decision several times. I still remember the feeling on the day we finally got permission. I thought I could take the world on. Then it all crumbled in front of me.

    The company we were leasing the building off stopped returning my calls. We had only to sign the lease and off we would go. Then I get the news. Unbeknown to us we were being watched like a hawk watches a sparrow. As soon as we got the building approved for food use McDonalds purchased the building from the company we had agreed to lease from and set about creating yet another burger bar. It's still there today, nearly 30 years later.

    Sometimes I wonder what would have happened to my friendship with my cousin if things had panned out differently. I doubt it would have gone well.

    It would take something very special before I would ever consider a partnership ever again.
     
  4. MustImprove
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    MustImprove Speed Is Good, usually only in the right direction Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    @RazorCut I'll tell you what, that must almost be worth a thread in its own right!

    That's another example of how an administrative weakness can viciously bite your backside and blight your dream.

    You did some brilliant prep work there, especially considering that at the time your youthful bumfluff had barely encountered a blade. Top work chief. What a lesson so early in a career.

    I bet at the time everyone was all smiles, not least your cousin.

    In terms of extracting the value for others now, I'm not a legal beagle, but I suppose it might have been possible to tie up your "first option" to lease before they could consider a sale, in a contract....since you were adding massive value by switching the building use that seems fair to me. Perhaps you could have made the contract subject to you getting the food use by date dd/mm/yy of course.

    That way both parties would have some cover, and most importantly you wouldn't need to choke a little each time you munch a burger.

    Anyway, hindsight is wonderful, and I could imagine many younger folks (including myself) trusting that it would just be OK like you.

    I find it interesting to think how can we help other members avoid our mistakes, and I think your little lesson can do just that.

    How would you advise your younger self now?
     
    Last edited: Oct 4, 2015
    FastNAwesome and RazorCut like this.
  5. RazorCut
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    RazorCut Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    I tried, they gave me the run around stating that as the previous occupant (a clothing store) still owed them a load of back rent they couldn't lease it out again until the legal bods had sorted it out as, technically, the clothing store were still leasing the premises and so raking up a large bill every month. The rent and rates alone came to about $100k a year which was a lot back then so it did make sense in some ways.

    The building had been empty for over a year and so I figured no one was interested (either couldn't see the potential or didn't have deep enough pockets). I had also checked and no other application of any kind had been registered on the building. Add to that I was also willing to pay the asking price and not demanding a rent free period (I was well aware I was unproven and punching well above my weight so had little leverage). The McDonalds move completely blindsided me.


    If I were to give advice based on years of my personal experiences and observations of others I would say this:

    In business trusting someone, even a best friend, is for fools (and I've been too trusting too often so that made me one of the biggest fools).

    The saying goes "Fool me once shame on you. Fool me twice shame on me."

    So, in ANY business dealings hammer out ALL the details between all parties then get it all in writing in a legal document that EVERYONE signs. NO exceptions.

    For a partnership both take 48% of the voting rights and give the 2% so someone impartial you can BOTH trust whom you know will put the best interests of the business first (accountant, solicitor, mutual mentor etc.). This gives you someone not only with a voice of reason but also with the clout to make that voice mean something.

    In show business they say never work with children or animals. In business I would say never get into bed with friends or family. The potential downside is just not worth it in my opinion though many people make it work.

    There is another saying "Its better to give than to lend, and it costs about the same."

    If you have any business dealing where you are not 100% protected you must be able to accept and be prepared for the worst case scenario of total loss. So unless you can afford it, and the upside is of such a high magnitude that the risk is worth it, walk away.

    Any risk, ring fence it with an LLC or whatever. You never want to be put in a situation where your home and everything you own is put on the line.

    These for many may sound like extremes coming from someone who has been burnt a few times. Please bear in mind I am an eternal optimist. It's better to be safe than sorry. Unfortunately in todays society peoples word is no longer their bond.

    For those that have learnt these lessons the hard way you may find this amusing. Well it made me smile.

    fool.jpg

    The moral of the story, never put yourself in a situation where you need a chopper. ;)
     
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  6. MustImprove
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    MustImprove Speed Is Good, usually only in the right direction Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    @RazorCut

    Thanks for you extra insight. You certainly did give it a good shot.

    I imagine that over the course of you life some other business relationships have "enjoyed" the "benefit" of your experience there!

    ...and some solid advice for others too. Rep+ :)
     
    RazorCut likes this.
  7. Scuur
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    Scuur Bronze Contributor I've Read UNSCRIPTED Speedway Pass

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    @MustImprove I have a business that you might be interest in, It a staffing business for a upcoming industry, I have already gone ahead and created the website and still some small marketing, Right now I am getting a couple hundred hits a day. I am well on my way to be on the first the page for the major keywords as well. My problem has been lack of time for reaching out to companies looking for staffing needs in this industry. I have had a few freebies, and they have gone over very well. Would love to hear you thoughts and see if your interested in some sort of mentorship.
     
  8. MrYoshi
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    MrYoshi Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    This thread worries the **** out of me. I'm currently in a partnership with one person in medical school and my brother who works 9-5. We should be making money in the next few weeks based on deals we are close to signing, but I'm worried about the future of the company lol. I already quit my slow-lane job because I hated life and saved 20k to take this project on for a year.
     
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  9. Saf H
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    Saf H Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Classic post. So inspiring and a real cautionary tale. Thanks for sharing something so personal
     
    MustImprove likes this.
  10. annagreenang
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    annagreenang New Contributor

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    Great post, thank you for sharing, i really like your post specially the happier part.
     
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  11. TheOrchestrator
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    TheOrchestrator Freedom Fighter Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    *knock knock* Anyone in there?
     
  12. visiomari
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    visiomari Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    This post is crazy. I honestly don’t ever see myself pursuing business with partners.
    I’m a lone wolf by nature...I want either all the glory or all the defeat. I don’t want anyone to be able to tell me “you only did that with my help.”
    This is why I love lifting/ bodybuilding and hate playing team sports. I’m a control freak (seriously, this is why I want to Fastlane so badly... I HATE not having control of my financial life) and would rather just take on everything. That can definitely get problematic.

    Any time I’ve depended on other people for (important) things, I’ve been disappointed... 9 times out of 10. Zeus help me if I ever absolutely have to hire someone. That’s going to be tough.
     
  13. ytomasch
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    ytomasch New Contributor Read Millionaire Fastlane

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    I can't speak for the others on this forum directly, but I definitely work the same way and assume many do. Stay strong.
     
    visiomari and MustImprove like this.

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