Business partner is a alcoholic

peeka

hi guys ,any advice would be welcome here

im currently running a business in its six year built up from home to its current state competing on par with others in its field with an annual TO of approx 2 million a year

Problem is my business partner, who at the time of starting up we worked in the same company which closed down due to the owner retiring,i managed the company at the time, and to start up on my own i didnt have enough means to finance it,so asked my friend who worked there also, would he like to join me in my venture as we nothing else to lose apart from the 10k we would each have to invest in it

Fast forward six years, we did quite well to bring where it is now ,but throughout that six years workwise i would do about 90% of the work whilst he would do about 10 % and he is always happy to just sit back and let me just get on with

Now ive always knew he liked to have a drink (we would always make a point of having a session once a week)but only lately iv noticed and with a bit of snooping have learned he drinks every night, and i mean a lot and has been for a very long time (infact it could be two years since the last night he didnt have one)

Now due to the downturn in business i dont go abroad as much as i used to for buying trips ,and have noticed his work pattern ,and what i notice is incompetence,lazyness,bad manners towards customers etc plus a lot more and basically waiting for closing time so he can rush to the pub and when i am away he closes up early anyway and if i ask why he come up with some excuse

Im actually on holidays now and even though im 9000 miles away, ive had to sort out 3 problems already this week that he f**ked up ,and when i rang him the other day to sort one problem ,he had closed up at 3.30 and when asked him why ?he came up with some half arsed excuse why and tbh he sounded like he was in a pub ,i kept my cool and said nothing but deep down that was the last straw for me ,and cant take anymore of this crap from him

So the advice im looking for here is what can i do to solve this problem ?i had a long hard chat with him over this a few years ago and he improved for a while but after time he was back to his old ways but now he is ten times worse
and if he keeps it up the company will collapse in six months time

BTW the company is not limited is a Partnership/sole trader one and we also have revenue bill thats currently being paid monthly due to an audit we had, again another cock up on his part but too long to go into

Basically what i want to do is get rid of him but how hard is this to do??

PS im 38 mortgage and young kids ,hes late fifties no mortgage and kids left the home

Thanks in advance

lanternman

Well done on building a successful business.

I think you need to seperate your business from your friend ship and deal with them.

On the business front you already know what you have to do. It is not right that he run the business into the ground. We are all to aware of how easy it is to lose clients compared to getting them etc.

However, he is suffering from a terrible problem and might be using it to mask something else so it depends on your level of friendship as to how much help you think you should be to him.

Did you draw up a partnership agreement when you started the business? What does it say about a partner exiting the firm?

FusionNet

Sorry to hear about your situation, thats not easy to deal with. I knew of a similar situation in another business once. Except to make it worse the alcho in that partnership used to steal from the till to fund the habit. He did similar things though closed early, didnt turn up for work, was odd to customers. This business fired him. Now I think they might have been limited so it may have been easier to do. I guess there are a few things to consider.

Firstly: What agreement or legal paperwork was done first day. Did it have a "what if" scenario in it?

Secondly: Have you built up a list of things he has done wrong and more importantly have you proof of this record?

Thirdly: If you wanted to buy him out, pay him off have you the means financially to do this?

Finally: Will there be any rift in the business if he goes? As in will staff take his side/your side. And also have you talked to your solicitor about it?

There is probably a dozen ways to sort this out. As in, ye could wind down this business and you could re-open in a week with the same name and I dont think he could stop you. You could pay him in one lump sum to feck off for good (that would tempt someone in his situation). You could offer him a percentage profit for a period of time 10 years etc something like 10% again to leave the business for good. He can sit in the pub then and make a few bob. Not ideal but if he were to do this you'd have to draw up an agreement with the solicitor to make sure he has no imput.

Id personally prefer the closing down and re-opening as a sole trader or paying him off to leave.

Hope it works out for you. Try and enjoy your holiday if you can, if you dont you'll regret it..

Sposs

You have four options in a case like this;

1. Buy Him Out - if viable

2. Sell the Business

3. He removes himself completely from the business and get's an annual share of the profits or a set wage - probably the idea with the least amount of headaches.

4. He goes away , get's help for his addiction and when he's ready can come back and actually be an important part of the business.

It's a messy scenario - best of luck.

Trojan

Great advice above, I'd agree 100%.

One other thing I'd look at is your relationship with his family, you might be able to carefully tiptoe around the subject with them and learn what they know and think, and maybe even what they'd like to happen in this situation. But do it very carefully.

Best of luck, and please keep us updated as to how it turns out.

Bandara

My advice is speak to a solictor with expertise in this area today.

peeka

thanks for the sound advice guys

I have thought of buying him out but then i thought about it, why should i ?hes got a free ride of me for the last six years and feel i dont owe him a cent in any kind infact it should be the other way round

As in the contract we signed i dont have that as my previous accountant has died

I have thought of going down the route of opening a similar business in the same area and slowly but surely letting the present one go but that could messy as in suppliers and accounts not being paid

i have also talked to my present accountant about this but hes against me opening up on my own as it could get messy (but i think hes just worried about losing a good acc)

Anyhow theres not much i can do about it here atm, but i think i will take hammertimes advice and see a solictor about it next week

cheers guys ill keep you posted

SouthKerry

Any updates buddy?

deepriver

peeka wrote: »

thanks for the sound advice guys

I have thought of buying him out but then i thought about it, why should i ?hes got a free ride of me for the last six years and feel i dont owe him a cent in any kind infact it should be the other way round

Do not get personal about it, unfortunetely that was the agreement you had and he was fully entitled to benefit financially

peeka wrote: »

As in the contract we signed i dont have that as my previous accountant has died

I think you need to get your hands on that if you are looking at making a change to the partnership, if something changes, it breaks the original agreement and he manages to get his hands on that you are looking in bad shape

peeka wrote: »

I have thought of going down the route of opening a similar business in the same area and slowly but surely letting the present one go but that could messy as in suppliers and accounts not being paid

i have also talked to my present accountant about this but hes against me opening up on my own as it could get messy (but i think hes just worried about losing a good acc)

I think your best option may be to start out alone again as it seems you are the business and his loss will be a positive factor. However you cannot leave creditors unpaid or you will encounter legal action and possible strike off. You need to tie up all lose ends.
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If his performance is bad, I think you should record make that a matter of record and introduce warnings in relation to conduct, hours, performance etc. If you dont have this on record in a possible dispute scenario you will regret it. Have you tried introducing job roles with agreed inputs? Then if he shuts down early you can point to a job contract and highlight how he is not meeting agreed levels of input. Issue him with a guide on how to deal with customers and incorporate that into a job contract. Generally you need to make him aware that things are changing and that you will leave unless he changes and then leave him to consider the consequences of this action on his personal and professional life. However I think you have take the right approach and do not become overly aggressive. Everything needs to be done in a calm, calculated and fair way. But it sounds like you need to get the wheels in motion and end the partnership, unless he makes a dramatic improvement which is probably unlikely.

Just my two cents, if it does go pear shaped you could consider the services of the mediationpanel.ie