School Fees...

When you sets up a new business, you know that you are going to go through a learning curve, and that any lessons you learn on the way, be they financial or dealing with business relationships, will be "school fees".

My wife and I have got involved in a business relationship with a local business man - my wife would run some equipment that he needed a specialist to operate. The deal was fairly informal - the basis that he would supply and maintain the machine, and my wife would supply all other consumables. They would then share the income from the machine according to a ratio that they agreed on.

Advertising and clients would be supplied by him, my wife committed being available to run the machine for a minimum of 60% of a working week.

A simpler deal one couldn't really come up with.

However. It now seems that as far as he is concerned, my wife had agreed to supply the consumables to keep the machine running, as well as supply clientelle.

This, I suspect, has come about due to cash flow issues - brought about by:

1. Alienating and firing the champion of his business
2. Bringing in his daughter as 'Marketing Manager'. Daughter mainly spends her time smoking on the back step, and no obvious time doing any marketing. Not to mention leaving 'drop-in' clients (as well as the occasional booked client) hopelessly ringing the bell and not being allowed in.

The relationship is now coming to a head as my wife will no longer pay for consumables to keep the machine running. It is still a good deal for us, so despite the frustrations, we'd like to settle it down and continue.

So, lessons learned:

1. When setting up a business relationship, MINUTE the meetings. Seems pretty obvious, but we did not, and now we have no records to refer to when it comes to "he said, she said" arguments.
2. Make your contract as detailed as possible. We did the best we could, but nowhere does it specify who will provide the consumables for the machine.

Both pretty obvious points really.

Meeting to be held in the next week or so - watch this space!