[quote=ecymosis;215202]I purchased a 49% stake in a relocted optical.
Your best advice is from Tmorse. If you cannot wrest control of this business, you'll never stop spinning your wheels. Get majority or get out of this situation. Nothing you do will be as important as this.
Ecymosis:
I feel your pain. I'm am just completing a 3+ year struggle with a former business partner. Not an optical business, but many of the same problems. PM me and I can share what I did right, what I did wrong and what I would do differently.
Lulubelle
We have our contract in place. He is 51% is only a number. The only reason he is 51% is he put his house up for the collateral on our $180,000 loan. Three years into our venture in June our contract becomes a 50-50 equal partnership. My question to all of the optiboarders is this. I want to increase profits by cutting non essential costs. My partner doesn't think that is a way to help the business. He wants a sit down meeting to come up with ideas to spur on business. Now he has owned this business for 10 years. He has never produced a mailer, he never advertised, he never promoted a trunk show. The old store was in a high end mall location. He lost the lease. I do the mailer I promote the store in many ways. I do not want to do the bait and switch tactics. I am a high end boutique. I read everyday in the business section that companies stock go up when cost cutting measures are in place. My partner thought that was the dumbest idea he ever heard. I could cut over $1,500 per week. The only reason he thinks this is a bad idea is because he would have to change his lifestyle. No attorneys have to be called. Wow what a bunch of war mongers. I only wanted to know if decreasing payroll can help a business.
Originally Posted by ecymosis
WAR MONGER!!.... Moi?
Them be fightin' words...:D
Ecymosis,
No, what was represented so far, except for killing him, was diplomacy. Posters have been offering suggestions that would empower you to address what was presented as a challenge to the correct decision, a decision that you had come to in absence of input from a majority partner who is ignorant of the relevant information to which you have daily access and interaction, a partner who further, never bothers with the day to day activities of the business. The very notion of conflict was reflected in the title you chose, “Struggle with my partner” If it is not a contentious arrangement you would never have had to mention the division of ownership. Perhaps there is a little animosity in denial just under the surface, after all, who is he to challenge you.
If “I only wanted to know if decreasing payroll can help a business.”
Then that’s all you would have had to ask.
"When a true genius appears in the world, you may know him by this sign, that the dunces are all in confederacy against him." Jonathan Swift
ecymosis said "No attorneys have to be called."
Well, this says it all. Good luck!
Your posts clearly indicate a lack of business acumen. You need an adviser or guru to lead you through the troubled waters ahead. I am not suggesting any litigious action just someone to take you by the hand and protect your interests. Your posts indicate to me that you have made some poor decisions and I have no reason to think that you will do any better in the future.
If you become 50/50 in June, can you wait until then to bring it up? It would be an easier battle then.
-Steve
Agreed, but he says he's not looking for a battle (although it may not be he choice in the end).
He seems to be looking for a nice way to tell his partner...
"I'm right, you're wrong."
Ophthalmic Optician, Society to Advance Opticianry
This is where good legal council can be invaluable. Our boy must first of all understand where he stands from a legal point of view. Only then can he propose any changes and have alternative remedial action plans in place.
Of course, all of this is just reading tea leaves. We do not know whether the business is a partnership or some form of corporation. So, right off the bat we do not know who is contractually responsible. Do these guys even have a contract?
As to the question "I only wanted to know if decreasing payroll can help a business," I can only reply; it all depends.
Perhaps instead of good legal counsel, you need counsel by a good copentent CPA.
Chip
Day one: Partnerships don't work!
What is described in this thread, is an employer/employee situation,a partnership in name only. The employee is the managing director and the carrot which keeps it going is a 49% equity position. Basically worthless on the open market, but attractive if and when profits are divided.......but only if 51% agree on that.
"Always laugh when you can. It is a cheap medicine"
Lord Byron
Take a photo tour of Cape Cod and the Islands!
www.capecodphotoalbum.com
He has already stated he isn't looking to go to war..... so....
Why can't you do both????
Advertise to promote business AND cut expenses!!!!!!!!!!
Companies do this ALL THE TIME when business is at a lull.
It certainly is not unreasonable to cut expenses at such times. Maybe this would be a way to approach Mr 51% on this.
One expense that certainly sounds like it needs to be either cut or re-diversidfied.... is Ms Newspaper.... get her to do MORE or get her out of there.
Because his "partner" disagrees with this.
Who doesn't want to get their Lawyer or Accountant involved when it comes to business?:hammer: They are the two most important people to your business besides the owners in this case. I would say do both as well, advertise and push your salses force and at the same time cut cost. I look in a few places when cutting cost, labor, debt, COGs, and lease. The lease is a done deal so move on, the COGs look to see if you have a lot of unnecessary product in th eoffice you know that frame that looks great, but you know you'll never sell. Labor, you got a lazy optician or personell, cut their hours to cover the busy shifts, if theirs not enough work productivity goes down, if theirs too moch work productivity goes down (make sure you staff right basically, don't cut hours too much or people get disgruntled and the ones eft working end up getting burnt out). Debt, make sure you are getting good rates from your lender, if not could you be? Business loans unfortunately are not so easy as the lender will more than likely want you to switch your business accounts over to him which could be more of a hassle than it's worth, but it's always worth checking to see what you got compared to what you can get.
51/49 even with agreements in place doesn't work, unfortunately the 51 can recind any agreements with his majority stake. Suggest some of your ideas and don't push it, then in june if it truly becomes 50/50 make more of a stance. Oh and business is war sometimes, don't be afraid to fight it could mean bigger pay stubs for both of you.
And now I'm off to raid my place of business, warmongerer out!:D
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Couldn't agree more!
I meet with my accountant at least 3 time a week, and probably communicate via e-mail at leat twice a day.
My attorney gets a call anytime I think there's a chance I might get in over my head, which is probably 6-8 times a year.
Ophthalmic Optician, Society to Advance Opticianry
Tell us about your payroll situation. You have mentioned only one employee. You describe her as disgruntled (what do you mean by this?), an excellent salesperson, and say she reads the paper all day. Why does she read the paper all day; is it that slow at your store? Tell us more about her and your other employees.
How is cutting payroll going to save $1500 a month? Are you talking about laying a couple of people off?
Perhaps everyone is being a little too negative and pessimistic. Let's look at it from the perspective of mr 51%. He would like nothing better than to have a flourishing business that requires none of his time or effort. He could put his feet up and collect the proceeds. Therefore, it would be in his best interest to consider very carefully any reasonable suggestions that would ultimately bring in these golden eggs. Put your ideas together in a concrete business plan backed up by numbers and research, and present them to him. Let him see that you have what it takes to make this business prosper. If you can sell this pitch effectively you may have a more compliant partner who has gained confidence in your ability. It's possible that at the present time your partner does not have the requisite confidence in your abilities to fully accept your reforms. It's up to you to convince him otherwise.
Really, on Optiboard? Oh wait - you didn't say sarcasm. :)
-Steve
I think I understand where you're coming from or want to go. But, you cannot economize into profitability. You can economize into better cashflow. And, that better cashflow might allow you to enhance your marketing initiatives. While you have already raised the hair on the back of your partners neck, you might call time out and admit that your use of the term profitability might have been misused. There also may be a chance to sweeten the sour grapes a little by checking out what positive changes might be in store from your tax liability standpoint due to the reduction. After you've run the numbers and presented them without a grimace(sp?) you'll have a certain sum available for marketing initiatives you ordinarily wouldn't have had. If the enhanced marketing draws new traffic the need to staff up becomes a necessary next move. So, while you may be "rightsizing" from the initial reduction, the sound of more little feet pitter pattering on the floor again will come back and all will be well in Cleaverville!
Simple answer=NO!
I fear cutting payroll is the least of your problems.
Have known several friends who were starting out or haveing a hard time in a business who paid everyone else and put thier own pay check in a drawer unsigned until the business got itself out of hard times. You might try this with your and your partner's checks until the business becomes solvent.
I am quite sure both you and your partner will get the message very, very soon and you employees never need be aware of your troubles.
Chip
Someone pinch me. I am in full agreement with Chip.
Someone play lotto for me (1228)
Doc
Solution..........................
Good boy Chip..........................:cheers:
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