Starting a business – Joint management business – the real story

Starting a business – Joint management business – the real story

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In a joint business, as in marriage, it all starts with mutual trust partners, and in the future may result in claims, quarrels, litigation, and eventually rupture. Even with the equivalent section of the business profit share business itself is almost impossible, so one of the partners is not always destiny. A similar situation occurred with friends “thick as thieves” and Paul Alexander. After years of hard labor in a business that people thought their child, he was left with nothing.

Two friends from Kazan – Paul Alexander – decided to start a business selling expensive oak doors in Moscow. Shortstop counted on a good profit, but for business development needed investment. Paul has invested in the development of $ 30 thousand, and Alexander put only your enthusiasm and borrowed from a friend $ 10 thousand. Ltd. company called “Oak” started its activities with a starting capital of $ 40 thousand.

Even if you have money and friends Alexander Paul could not promote a business without connections and acquaintances.Deliveries oak doors from France established another participant businesses that contract did not formally belong. The contract was listed CEO Paul, as it had the lion’s share of money invested in the business, and Alexander got the status of a commercial director.

After a few months the business has expanded substantially. Moscow not only sold oak doors, but the windows and even kitchen furniture. In the capital there were many customers willing to spend enough money on the arrangement of their houses and apartments. Accordingly, the business began to bring a steady income, which is constantly increasing.

After a few years, the market of the product had a strong competition and growth of the firm stopped. The ratio of the founders to work too has changed dramatically. Paul had not paid enough attention to the work, and Alexander assumed the role of manager, and only all documents also was a commercial and not a CEO. In addition, Alexander took a job at his company many members of his family.

Situation became familiar glow Paul hinting him that Alexander spends money machinations, and puts part of the profits in your pocket. But Paul still trusted friend, and did not want to even think about dishonesty Alexander.

Affairs of the company got worse. People involved in the supply of doors from France, decided to open their own business.Of “Oak” was not profitable to outbid goods at exorbitant prices. Comrades decided to turn the business and open a new company to manufacture wooden staircases. Already been taken by the wizard, found space for workshops and prepared advertising. Case remained for small – to sell unsold goods old firm, and the money to invest in new business development.

To start a new job with new forces Paul a couple of weeks left to rest on the Canary Islands. And when he returned, found that neither Alexander nor explanation, no money is nowhere. It turned out that Alexander has sold all the goods and disappeared along with the entire sum of money. Pavel did not have any savings to get to his feet. Betrayed by a friend, he operates in a conventional employee in a public institution.

Love Gorbunova, an expert in organizational consultation, commented the situation: “Initially wrong was drafted memorandum”.

First, I had to be clearly defined, in what time frame, and from which the money should be returned to Paul Alexander borrowed $ 10 thousand. Also, incorrectly identified by the statutory share of each of the co-founders. Value of the contribution Paul has been reduced.

Second, Paul is not insured himself, handing the reins of the company to a friend, apparently relying on his honesty. But the business world can not tolerate such negligence. Of course, appoint a manager can be any adequate employee firm, but it is necessary to prescribe in the contract that it is up to you the last word in key decisions in the firm, such as major investments, the appointment of staff in strategic positions. Should be a clear reporting system, otherwise it will be impossible to control the business. Even if the founder and manager – it is one person, these positions are different roles and powers. Founder wants to get some income and puts certain tasks manager. And the manager, respectively, performing these tasks, and depending on the result achieved receives some income.

More important that the contract shall contain clear rules for the distribution of profits. How much money will go to the development of business, and how much personal pocket founders. Must clearly indicate what percentage of the profit is entitled to each of the founders. The contract mates Alexander and Paul was not included this time, so Alexander could assume a certain percentage of their profits, without regard to his friend.

Most likely, in the contract of OOO “Oak” has not been entered yet important point about the rules out of the business of one of the founders. Why, then, Paul could no loss go out of business, which ceased to be repaid, or it does not become interesting.

But the biggest mistake was not to enter into the contract and the third party is very important business, around which was built the entire business. Employee has accumulated experience and decided to open his firm, and OOO “Oak”, thus, were left without a valuable supplier of basic products. The continued existence of the company without ties and opportunities of the third employee was impossible.

According to experienced and successful entrepreneurs, the business must be based only on the law and clearly defined in the documents of the relationship, but not on friendship. Indeed, in this changing world of friendship too shaky concept. Not surprisingly, the business collapsed so quickly. In addition, the founders do not take seriously the statements and trade was “black.”

Only legitimate businesses can be durable. Only if a properly drawn up contracts and reporting documents can assert their rights in government. So Paul could not get justice.