For those interested in my transformation into Walter White, I have this week come to terms with a dude who put a partnership proposal to me last week.
He’s a Korean Australian, brash, enterprising, ambitious. He’s a high-flying, quick-moving character, but someone I think I can trust. He’s a bit pleased with himself, which is the common by-product of such a driven character. We’ve been in discussions for several weeks, and seemed to find mutual understanding very quickly.
Initially the discussion was regarding a conventional partnership, but then he put to me an alternate proposal. The proposal is that he comes into the business with no money down. He buys his way into the business based on performance, not dissimilar to options I posted on the net (but which he apparently didn’t see). If he can increase business by 75% within 30 days then he wants a 10% stake in the business; if he doubles it then he wants 20% equity. It’s a reasonable offer and a better long-term option than getting a packet of money up-front but muddling along business wise.
It’s a bold and ambitious proposal, and on the face of it I have little to lose. If he manages to increase the business by 100% (ironically we’re now trading about 20% above the long-term average he’s based his proposal on) then we make a clear profit of about $2,500 a week. At that rate he’s entitled to a cut, and it still means I take a couple of thousand without getting out of bed. If he misses those targets there’s no deal. It means that he’s motivated to get it done, and clearly that he’s confident that it can be.
In all honesty I don’t expect he’ll hit even the 75% target in that time frame, but I’m sure he’ll improve the business. He has experience running massage shops here and in Korea, he has the contacts, the marketing nous and the people. He proposes to bring in a receptionist/therapist to run the show day-to-day on a performance contract also. It reduces my overheads straight away. I certainly think the targets are achievable within a few months, but any increase in the interim is welcome. And the bonus is that I can untie myself from the place – I’m in 4-5 times a week currently and on the phone 3-4 times a day. In this arrangement once a week is sufficient.
Naturally there are reservations. There are no guarantees in life. We’re having a trial period, which is sensible, but I have to make sure that nothing is done in that time that can’t be undone if needs be. I’ve stressed that to him repeatedly. There are trust issues as well, but I don’t think they can be overcome until we do the job together. In any case I plan to have one of my people close to protect my interests. Finally, I’m protective of my staff. I want them to be safe and secure, but the reality is that the reception role now becomes tenuous – which is where my two most reliable people work. End of the day it’s a business. One has already said she’s prepared to step aside – she has a marketing internship to complete anyway. The other, Jeep, I want to keep as my inside man. They’re both great people.
It kicks off tomorrow – 2 weeks review and recommend, then 30 days to hit the mark. We’ll review again after that. If he hits 75% then there’s no discussion, but I’ll keep him aboard if he manages 50% and trending up. Regardless, no equity deals are done until the improvement has been sustained.