Business Education

My Business Partner is Hiding Clients from Me — How Do I Deal with this Situation?

You’ve just found out that your business partner has been hiding clients from you. Of course, this has a number of important implications including, but not limited to: revenue, reputation, day-to-day operation, and a variety of other issues. All of these, not to mention the breach of trust and value of the interpersonal relationship. It’s a very difficult set of circumstances to deal with, but obviously, you can’t just ignore it. You must take action, not only for your own sake but for the sake of your career and the business at large.

Dealing with a Bad Business Partner Emotions

Anger. Disbelief. Disappointment. Resentment. Shock. Sorrow. You could easily cite any one of these negative emotions because you’ll experience at least one or more of them. Before you do anything at all, it is essential that you understand your gut reaction and the long-term feelings you’ll probably encounter as time goes on. While you will get past this situation, you’ll probably never completely get over it. And, that’s okay.

Not all partnerships or deals work out well. Some just can’t formalize because of extraneous factors affecting the agreement, while others can be impacted by poor communication skills or a lack of flexibility on goals or approaches. This means that it is essential for leaders to stay aware of the state of a pending deal or partnership, especially if there are quiet signs that things aren’t going as well as they’d like. —Small Business Trends

You’ve no doubt experienced difficult circumstances in the past, and this is really no different. While it may be new, it most certainly won’t be the last time. The point being, do not allow pure, raw emotion to dictate your actions. If you give in to your negative feelings, you will make rash, poor decisions that will only make things worse. You need to approach this from a calm and rational perspective. So, give yourself a little time to vent and get those negative emotions out of the way.

How to Deal with a Dishonest Business Partner Who is Hiding Secret Clients

Once you feel calm and collected, you’ll need to methodically approach how you will deal with the situation. Here is a brief but effective guide for the steps you can take to deal with a business partner who has been hiding clients from you:

Learn as much as possible about these clients. This probably won’t be easy or pleasant. If you are able, learn as much about these secret clients as possible. You might even go so far as to contact them yourself under the guise of following up with regular business. The whole idea is to try to get the best picture you can about these secret clients.
Thoroughly examine all the business’ finances. The very next thing to do is look through your business’s financial documents. While these might not reveal anything at all — if your business partner was clever and deceitful enough — it could reveal an unseen pattern that you never detected before. At the very least, you might find some discrepancies, or this revelation will reveal past discrepancies you could not explain before.
Formulate a couple or few separation scenarios. After you’ve done your detective work, it’s time to concentrate on how to best move forward. Since this is such a big betrayal of trust, it’s probably unrealistic to think that you can just patch things up and go on as if nothing has happened. So, you need to formulate at least a couple of ways that you can break up the relationship and do as little damage while causing as little disruption as possible.
Talk to your business partner about ending your arrangement. This will most likely be the hardest part of resolving the situation. If you are able, don’t simply cut off communication and walk away. Instead, talk to your business partner in order to gain an understanding of his or her motivations. Although this certainly doesn’t excuse his or her behavior, it might help you in the future to detect when something’s awry when you otherwise wouldn’t.

What other suggestions do you have for dealing with a dishonest business partner who is hiding something important? Please take a moment to share your thoughts and experiences so others can benefit from your unique perspective! Interested in learning more about business? Then just visit Waters Business Consulting Group.

Like this article?

Thinking of Hiring a Family Member for Your Small Business? Here’s Why You Should Think Twice

August 25, 2023 No Comments

Bringing family members into your small business might seem like an appealing idea, often driven by the desire to strengthen family bonds and keep the business within the family circle. It very much seems a win-win situation. At least, on first thought. However, this decision merits careful consideration. While there are undeniable advantages to hiring family, there are also potential pitfalls that can impact both personal relationships and business success. So, read on to explore the pros and cons of hiring family members in your small business. Pros of Hiring Family in Your Small Business There is certainly no question that hiring one or more family members comes with a few enticing benefits. (You can probably think of a few right off the bat.) Here are some of the biggest advantages to bring a family member on board your small business: Shared values and loyalty. Family members usually share your values and vision for the business, resulting in loyalty and dedication. Family members are more likely to be invested in the success of your business than non-family members. They’ll be more likely to work hard and go the extra mile to help the business succeed. Trust and reliability. Family bonds often translate into greater trust and reliability, reducing concerns about employee dishonesty. Plus, you know their strengths and weaknesses, their work ethic, and their commitment to the family. This can make it easier to trust them with important tasks and responsibilities. Flexible work dynamics. Family members might be more willing to work unconventional hours or take on varied responsibilities, contributing to the business’s flexibility. Additionally, hiring a family member can save you money on labor costs. You won’t have to pay them as much as you would a non-family member, and you may be able to arrange a more novel pay structure or compensation package. Another benefit is their personal knowledge of family dynamics. Family employees often understand the nuances of family dynamics, which can be quite advantageous in managing the business together. Cons of Hiring Family in Your Small Business Obviously, as with anything else, working with one or more family members can cause a few headaches. While the good can easily outweigh the bad, there are some things you should think long and hard about before hiring family to work in your small business: Blurred boundaries. Lines between work and family life can blur, leading to conflicts and stress that spill over into both realms. Working with family members can create conflict, especially if there are personality clashes or disagreements about how the business should be run. This can damage your personal relationships and make it difficult to work together effectively. Lack of objectivity. Family dynamics can hinder unbiased decision-making, potentially leading to poor business choices. When you’re working with family members, it can be difficult to be objective. You may be more likely to give them preferential treatment, even if they’re not the best person for the job. Creating unfair perceptions. Non-family employees might perceive favoritism or unequal treatment, affecting team morale. What’s more, it could involve limited skill diversity. Relying solely on family for expertise might limit the diversity of skills in the business. The decision to hire family members in your small business requires careful consideration of both the benefits and challenges. While shared values, loyalty, and trust can be advantageous, the potential for blurred boundaries, lack of objectivity, and conflicts should not be underestimated. Navigating this dynamic successfully requires a balance of clear communication, well-defined roles, and professionalism. Before extending a job offer to a family member, weigh the pros and cons, assess the potential impact on both your business and personal relationships, and establish strategies to manage challenges that might arise. By doing so, you can make an informed decision that serves the best interests of both your small business and your family ties. Interested in learning more about business? Then just visit Waters Business Consulting Group to learn more about us and the services we offer.

Easy Ways to Build Up Retained Business Earnings

June 23, 2021 No Comments

The U.S. Bureau of Labor Statistics estimates about one-third of new businesses fail in their first two years of operation. Approximately half go out of business within the first five years. Banking statistics reveal around 82 percent fail due to cash flow issues. Those are grim and stark figures. But, these unfortunate circumstances can be avoided by building up a business emergency fund in the form of retained earnings. Top Reasons to Save Retained Earnings There are several benefits to saving retained earnings in any business, no matter how small. (But more particularly, for medium to large sized organizations.) Obviously the most important is for emergency situations. It could be a natural disaster, a pandemic, a sizable dip in the economy. Regardless, emergencies do happen and your business will benefit from having savings in-place. Retained earnings reflect the amount of net income a business has left over after dividends have been paid to shareholders. Anything that affects net income, such as operating expenses, depreciation, and cost of goods sold, will affect the statement of retained earnings. —The Blueprint, a Motley Fool Service Another advantage of having retained earnings ready-to-go is for opportunity buys. Your business might have the good fortune of being able to purchase inventory and/or equipment in bulk at a substantial discount. Or, there might well be a circumstance where cash becomes temporarily tight. Retained earnings are an ideal source of capital that can later be replenished. Clever Ways to Save Retained Business Earnings It’s not always easy (or simple) to put aside money within a business that isn’t specifically for something like inventory, equipment, materials, et cetera. But, there are ways to save retained earnings for your business — it just takes a substantial amount of discipline and patience. Here are some effective ways to save retained business earnings: Make it simple. Rather than trying to save money in a business checking account and “pad” the balance, open a dedicated account, such as a money market (since it earns interest) and that will provide more incentive to set money aside. This way, you’ll largely avoid the temptation to spend what you’ve ostensibly saved. Automate savings. Once you have a money market account to save retained earnings, set up automatic deposits to go into that account on a regularly scheduled basis. After a time, it won’t be such a big deal and you’ll grow accustomed to it. Take advantage of discounts. If you’re planning on a big purchase and have a budget set for the expense, take some time to find the same item at a discount. Or, broaden your search to find something similar but less expensive. Then, take the difference you save and put it in retained earnings. Sell off old or unused items. You’ve probably bought one or more things in the past that you rarely use or have grown out-of-date. So, go through your assets and find prime candidates to sell off and then put the money into retained earnings. Take advantage of higher revenue. Whenever business is good, it’s a good idea to put some money aside for a rainy day. While many business owners do this, it’s only sporadic. But, making this a priority and a habit will help to beef up retained earnings. What other suggestions do you have for building up retained business earnings? Please take a brief moment to leave a comment and share your thoughts and experiences so others can benefit from your strategies. Interested in learning more about business? Then just visit Waters Business Consulting Group.

How to Move Past a Bad Business Policy

May 16, 2017 No Comments

You identified a problem, took action, and enacted a new policy. Your people don’t like it (read: hate it), and, now you’re dealing with the fallout. It’s not an enviable position to be in, but nonetheless, here you are and now, you have to take action–again. The advice you’ve long heard about learning from your mistakes is now a reality, and, you are willing and able to accept it. The problem is how to move past a bad business policy and avoid repeating the same mistake in the future. Though you know this one backfired, you can’t be sure of how other policies you enact moving forward will impact your team and your business at-large. It’s okay to be retrospective and to attempt to peer around the corner, but for now, what you really need is to make things right. How to Move Past a Bad Business Policy The very fact that you are willing to recognize you made a mistake is a positive sign. However, you might still have a problem to deal with and you don’t want Murphy walking back into your organization, wielding his rule which states, “every solution breeds new problems.” You’ve already seen that unfold and it should have phased you enough to make a change. …we hate to fail. We fear it, we dread it, and when it does happen, we hold onto it. We give it power over our emotions, and sometimes we allow it to dictate our way forward (or backward). Some of us go to great lengths to avoid failure because of all the pain and shame associated with it. —Forbes It’s also good that you’re self-aware enough to accept the blame instead of digging in and defending what you’ve done, which will only insult your team members. So, how do you prevent this from happening again, but, still be able to enact policies that don’t end-up backfiring? Here are some helpful bits of advice you can use: Don’t be afraid to admit you made a mistake. This bears repeating, and, it does so big time. There’s little else more damaging than a leader who won’t admit he or she is wrong. It’s arrogant, harmful, and can cause good people to leave. In fact, the best thing to do is to have a sit down with your employees and others and talk about how you arrived at the decision, why it was wrong, and, how you plan to resolve the situation. Identify the problem and be proactive. Speaking of resolving the situation, you’re inevitably going to face problems again, so, before they have a chance to materialize, do what you can to thwart them. This won’t necessarily be easy, but your intuition will tell you when something is about to become a problem. Get ideas from your team about solutions. Your team members are among your most valuable assets. Don’t go it alone, speak openly with them and listen to their suggestions. You’ll likely find that doing so will present many ideas which can be molded together for a solution. Avoid new policies that create new problems. This is more difficult than you might think, but it’s still possible. Before you do enact a new policy, think about what it will do and how it will be received by your team. If you play it out and identify possible result scenarios, you can usually avoid making another bad policy. In my 34 years of business experience with ownership in 9 different businesses and consulting/coaching with hundreds of business owners, I have a long list of bad business policies that I have made. All of the policies well intended, but many times not fully thought through. My greatest lesson in making policies, is that hiring the right people with the right core values will minimize the policies that seem necessary to police and hold your team accountable. Those employees with the right core values will do what is right almost all of the time, thereby eliminating the need for many policies. [shareaholic app=”follow_buttons” id=”26833294″]