Contracts and stuff – emotional decisions! Getting advice from ‘professionals’?!
I made a stupid emotional decision some 20 years ago that cost me(and my family) the house, financial base, in fact everything except that family and some great friends. AND I was to all intensive purposes ‘street smart’.
I will write a book on that at some stage, but having just finished ‘DevelopThroughLeadershipThinking’ I have to regain the energy.
So Back to the subject
Case study one
A friend engaged a designer to help them work through a renovation and subsequent styling.On the face of it, if this is not your thing, a great idea.
Initial cost of $13,000 later, with a resultant plan base at $230,000 against the stated clear budget of $150,000 they are in reality worse off by far. This didn’t include the interior furnishings, white and brown goods etc either and so was far off the agreed scope.
My advice is to terminate the contract and ask for a refund. Certainly not pay and more and certainly own what ever has been done to date.
What ever this initial advice person does now, has to be foreign to their initial recommendation and anything they agree to, will be by virtue of the situation, be and feel lesser.
It will need a complete rethink to establish the ‘fun and fulfilment’ of the project.
Case study two
Two friends decide to go into business – hope many times have In had to save one from the other in these circumstances!!!! – 50 /50.
The idea is good, the industry in on the ascension, things look great. One of the partners decides to introduce a third person, known to partner 2. They decide the added capital is useful and they each give 10% of their stake to the now third partner, hence a 20% stake. It could be seen that the original partners have controlling interest BUT, now one partner and the new partner have controlling interest when voting together! They together can devise a situation that can derail partner one – such as requiring a capital injection they know partner one can’t provide.
From there the situation becomes scary. Partner one still at this stage has 40% ownership AND LIABILITY (at least academically) and little say over the business if that is what partner 2 and 3 want.
Partner 2 decides to put various options to partner one, none of which are favourable to partner one.
This is when serious thought has to be given to all available options/risks/legal consequences etc
No time for light weight talk, for assumptions, for missing any unintended consequences of ANY actions. No time for attributing the potential of ‘best intentions’ of partners 2 and 3.
More of this to come ……