Problem Solver: Frank discussion is needed with your under-performing partner
Small Business Advice with Feargal Quinn
Q. I own a business with an equal shareholding with my business partner. The business is not performing well and my partner is slightly delusional about the work needed and treats it like a nine-to-five job. I have already pumped in substantial money, far more than her investment. What options are open to me?
A. I have come across this situation before and you are right to highlight it now as allowing it to go any further will only cause the problem to become bigger. There is no easy way to tackle this, so it is important you sit down and have a frank and honest conversation.
One of the ways to get your business partner to understand the seriousness of the situation is to split roles between both of you and ensure your partner is 100pc clear on the areas of the business they are responsible for.
While you will be tempted to get involved in these areas, don't. Allow her to take full responsibility and make it clear in your discussion you will no longer be getting involved in these areas and the business now demands she step up to the plate.
In my experience, this has proved to be a valuable tool which delivers one of two outcomes. Either your partner will realise how serious the issue is and will start to perform, or she will realise she is out of her depth and decide to exit the business in a way mutually agreeable to you both.
Q. I run a business which has encountered some problems with the manufacturing process. On the other hand, I have lots of great ideas about new products and new initiatives to promote the business. The business has won a lots of awards over the last year, and I am looking for advice on how I capitalise on this.
A. There are some alarm bells ringing in your email. To some degree you seem oblivious to the risk the manufacturing problems has brought and I can sense the excitement in the tone of what you write about the opportunities and the awards. Indeed they are opportunities, but they may never be realised unless you address the manufacturing problem.
A manufacturing problem usually suggests customers are left short of product and the continuity of supply becomes erratic.
That is a disaster for any manufacturing business and can trigger key trade customers stopping to buy your product.
Is there any danger that you have become distracted by winning the awards and potential future opportunities?
Sometimes you hear the question "Are you an inventor or an entrepreneur?" In other words, are you attracted to shiny new things and have less patience for detail. It is this detail that will keep you in business and make you a lot of money.
Forgive me if I am reading between the lines and getting the wrong perception, but there is only one priority for you - which is to solve the manufacturing issues.
Q. I am at a crossroads with running my business. I have a modest turnover and a modest salary from it. However, I am tired having run it for 12 years. I am sure there is potential to grow it but I really would like to just sell it at this stage. How can I go about this?
A. It sounds like you have worked hard to bring the business to where it is. It does seem to have served a purpose, in that it has paid a salary over the 12 years which is something to be grateful for, and you are obviously doing something right if the business has survived this long.
What you do next is very much a personal decision. I don't think selling the business is going to be an easy option. From the limited information you have given me, it sounds like a potential investor may take the view the business is over-reliant on you as a driver. You will be lucky to get any money for that proposition, or certainly only a minimal amount. If you thought you could refocus and breathe new energy into the business that is probably where the opportunity lies.
Set yourself a target of building the business up much larger than it is current size over a 36-month period. Be selfish about your objective and view it as a way to make the business more attractive for a potential buyer, while also earning more money.
It will require new energy, planning and a will to make this work. The prize could be enormous but you need to throw yourself into it. It might be an idea to sit down with a business mentor who would be able to make an assessment of potential.
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