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It was late 2005 and I had about $30k saved up that I wanted to invest in a business. Although I had done a few things online, I was frustrated with how that was going and opted to go offline into a field I was very familiar with.
It so happens that my dad was in that same line of business and so I asked him if he knew of any opportunities. The actual line of business is irrelevant -basically a local distributor of certain products.
My Dad at the time was moving out of the country and said to me, "I know this guy who is looking for a partner, If I weren't leaving, I would partner up with him".
I went to visit the warehouse, got a look around, talked to the guy, and got a general feel for it all.
The first red flag should have been when this person looking for a partner said he needed an answer before x date otherwise he would need to move locations, because the lease, etc.. it was some excuse I don't remember too clearly but it was basically a pressure tactic.
Anyway, long story short, I jumped in on my dad's recommendation and within a few days had the sinking feeling that I had made an extremely bad mistake. Essentially the guy was a complete idiot, no wonder he had gone through a few partners and none of them hung around.
Next, I did an inventory unbeknownst to him and caught him stealing.
Oh did I mention that I came to find out after the fact that one of the employees was an illegal?
On a Sunday morning I remember going in and sitting in his messy office and opening his drawers- I guess at that point I wanted to see what else I would find. I found drawers full of IRS letters unopened.
At this point I was already looking for an exit and basically confronted him with the stealing, he denied it of course, but the numbers don’t lie. And I later came to find out even more history on him that confirmed everything.
In the end, we sold, I lost about $15k in the sale plus three months of pure stress but I just wanted the hell out of there. However, I learned some valuable lessons. Ironically, that failure led me back to online marketing where I did succeed for some time.. until the big push from Google in 2009 to remove affiliates from adwords.
Why didn’t I do my due diligence you ask?
I guess I trusted my dad and his recommending this opportunity for me.
Did I even look at the books?
No I did not, this business deals heavily in cash and we all know how that goes.
I hope this story helps anyone thinking about buying into a partnership or business…even if it is highly recommended by your dad or anyone else that you may trust.
It so happens that my dad was in that same line of business and so I asked him if he knew of any opportunities. The actual line of business is irrelevant -basically a local distributor of certain products.
My Dad at the time was moving out of the country and said to me, "I know this guy who is looking for a partner, If I weren't leaving, I would partner up with him".
I went to visit the warehouse, got a look around, talked to the guy, and got a general feel for it all.
The first red flag should have been when this person looking for a partner said he needed an answer before x date otherwise he would need to move locations, because the lease, etc.. it was some excuse I don't remember too clearly but it was basically a pressure tactic.
Anyway, long story short, I jumped in on my dad's recommendation and within a few days had the sinking feeling that I had made an extremely bad mistake. Essentially the guy was a complete idiot, no wonder he had gone through a few partners and none of them hung around.
Next, I did an inventory unbeknownst to him and caught him stealing.
Oh did I mention that I came to find out after the fact that one of the employees was an illegal?
On a Sunday morning I remember going in and sitting in his messy office and opening his drawers- I guess at that point I wanted to see what else I would find. I found drawers full of IRS letters unopened.
At this point I was already looking for an exit and basically confronted him with the stealing, he denied it of course, but the numbers don’t lie. And I later came to find out even more history on him that confirmed everything.
In the end, we sold, I lost about $15k in the sale plus three months of pure stress but I just wanted the hell out of there. However, I learned some valuable lessons. Ironically, that failure led me back to online marketing where I did succeed for some time.. until the big push from Google in 2009 to remove affiliates from adwords.
Why didn’t I do my due diligence you ask?
I guess I trusted my dad and his recommending this opportunity for me.
Did I even look at the books?
No I did not, this business deals heavily in cash and we all know how that goes.
I hope this story helps anyone thinking about buying into a partnership or business…even if it is highly recommended by your dad or anyone else that you may trust.
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