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RiverWillRock
03-06-2005, 12:16 PM
Hi folks,
I hope this is the best place to post this. I just wanted to seek everyones advice on a situation I find myself in. Basically, myself, my brother and a friend of ours run and own a poker website. It is only the three of us in it. We have owned the site for a couple of years, but are only really starting to do things with it now. It has taken a considerable amount of work to get it where it is today, as we are basically learning everything as we go along, and have very little money to make things happen at a faster pace. But we are happy with the way things are going.

Anyway, onto the point. Myself and my brother do most of the work by far. We make all the decisions, have all the ideas, and generally make things happen. Our friend on the other hand shows very little enthusiasm in this respect. He puts in a minimal amount of work, and would never take the initiative to do anything. And any work that he does do is because either my brother or myself have asked him (often numerous amounts of times) to do it.

We have discussed this issue with him before, and told him how we feel about his input. At the end of the discussion we decided on a 40/40/20 split. Everyone agreed and that was fine. He said he would do more work etc etc. But after a considerable amount of time, he has shown a bit of improvement, but not much at all. For example, my brother and myself would be very actively contributing to the website forum, to encourage an active community etc. The last time my friend logged onto the site was over 20 days ago. Compared to me and my brother's multiple times a day, every day.

All the back end work of the site is down to my brother and I. The friend wouldnt even notice if something was changed, or would never get the idea to change/updated something himself.

As it stands he is getting half of what myself and my brother are each getting, but is probably doing less than 10% of the work that we are each doing. We agreed in the past on the 40/40/20 split. If work load was accurately reflected, it should be in the region of 45/45/10, and even that is being generous.

If we would ask him to do something, he would do it. But only after being pushed, or guided through the process. He would never notice something had to be done, and then just do it! The closest comparison I can think of is a mother trying to get her child to bake a cake. She has to stand over him/her all the way through the process to make sure everything is done correctly,right ingrediants, utensils, temperature of oven etc etc etc etc etc etc. /images/graemlins/frown.gif Its easier for her to just cook the damn cake herself!

They say you should never go into business with friends or family and I can see why they say that. But we are still good friends and can communicate well enough about all this.

Advice?
Regards
RWR

Myrtle
03-06-2005, 12:48 PM
Take accurate notes of your meetings........refer to them when appropriate.

Peter Harris
03-06-2005, 01:04 PM
if you are a company with shares, ensure that they are split thus. If not, form a contract agreeing to this share. Ensure your legal obligations are clear!

That said, business and friends are sometimes best kept mutually exclusive...just ensure you have the share portfolio sorted and take copious meeting notes and keep riding the person to up the workload.

Al Schoonmaker
03-06-2005, 01:31 PM
I hate to sound so negative, but it looks as though you should terminate the partnership. An undercapitalized small business requires commitment above all. If everyone is not committed, the committed ones end up doing everything.

If your business ever takes off, you may find that your friend expects you to treat him as a 20% partner, even though he did hardly any work.

One thing poker should teach us is to get away from losing hands quickly. The further you go with this partnership, the more difficult it will be to end it.

I must object to the general rule that friends and relatives should not go into business with each other. The data are very ambiguous. Some partnerships of friends and relatives succeed, while others fail. The critical issue is whether you can isolate the personal feelings from the business imperatives.

That's another lesson you should learn from poker. I might be your buddy, but you should still play hard against me. Take the same hard-nosed attitude toward business.

This partnership has almost no chance of working. Get out as quickly as possible.

Regards,

Al

RiverWillRock
03-06-2005, 01:38 PM
Thanks for your replys

The partnership works very well as far as myself and my brother go. We work well together, have individual strengths that compliment eachother etc. The friend on the other hand is not suited to this kind of venture, he doesnt have the creative capacity or enthusiasm.

The tricky thing is this; he has been the most financially contributing. While I cant go into the details of this, the finance generated from him has meant we have not had to make further investments up until recently. While his contribtuions have helped, they are still very small in comparison to the websites potential, and the amount of hours my brother and myself have put in.

Los Feliz Slim
03-06-2005, 02:23 PM
There's actually a way to get rid of him, keep his financial contribution, and "do the right thing". Make an agreement that guarantees him a certain percentage of the business revenue (not "profit" which can be hard to define and easy to fudge) for a LIMITED period of time (even if it's five or ten years, don't let it be forever). If you want, you can build conditions into the agreement that increase/decrease his stake based on his time/money investment.

If you see this business growing, you need to do this NOW and you should have an attorney create the agreement.

The Goober
03-06-2005, 04:42 PM
[ QUOTE ]
The tricky thing is this; he has been the most financially contributing. While I cant go into the details of this, the finance generated from him has meant we have not had to make further investments up until recently.

[/ QUOTE ]

So what's the problem? This is just how it works in business - you may be busting your ass day and night while he does nothing, but the cash that he puts up entitles him to a share of the business. Lots and lots of small business owners have to deal with investors that do absolutely no work for the company, but have an enormous amount of control due to the money they put up. In this case, he is taking a minority share of business, isn't trying to control you, and (begrudingly) does what you ask him to do. Sounds good to me!

jskills
03-06-2005, 06:58 PM
Offer him a buy-out and get him to sign resignation papers. Remove him from all bank-accounts and legal partnerships using the resignation document.

Do it nicely and try to stay friends.

I went through this exact same thing myself with a website we run (shameless plug) Goofball.com (http://www.goofball.com) and our "friend" decided he needed a huge payoff to leave quietly.