What to do when that wonderful new relationship goes sour. Wise words from favourite agony uncle
I've been working for several months in a fast-growing business. At the start, I was given a fixed rate and a promise if things worked out I would be made a partner. The trouble is, now those conversations about partnership are harder to initiate and increasingly it appears that I will have little or no stake in the business. What should I do?
You are too late, have lost your negotiating leverage and have placed yourself in an bad tax situation even if you work things out.
I’ll explain what you should have done in a second. In the meantime, you need to move on. I recommend a three-step plan. First, think about what you might want to do next, and start investigating options. One option should be to stay where you are on renegotiated terms. But find another couple of enticing possibilities. (They should be completely different from option one, and from each other.)
Second, take a month or two to seriously explore those options to understand how to make them work. If you stay, then what do you need the overall package and role to look like to be happy? If you chose one of the other options then what would that look like, and what evidence do you have that it will work? The sort of evidence you are looking for is a written job offer, customer orders for a new business or a budget for a year of travel. Don’t be afraid of getting out there and interviewing with prospective employers or trying to find the first clients for your potential new business.
Third, if your boss is still in avoidance mode, write a formal ultimatum letter setting a date at which things will either be resolved or you will leave, and clearly state what you would need to stay. Your work on the other two options will make this letter easier to write, and maybe the answer is that there is nothing that would make you stay. Make sure you don’t sell yourself cheap if you can see tangibly brighter horizons elsewhere. Whatever loyalty you may feel needs to be backed up by shareholding evidence.
Once you are done, then pick one of the three options, and enjoy the fact that you’ve learned a lesson and reset your career. Now for the lessons. One: Next time, and every time, you enter into business with someone, remember to get the deal sorted out up front. Have team workshops, ask and answer the tough questions, agree on roles and use a tool like Backofanapkin.co.nz or a contract to formalise your agreements.
Two: Try to divvy up the shares up front to avoid having to pay each other in equity – which is taxable later.
Three: Remember, going into business with people you know can be a lot of fun, but you should always pause before plunging. Likewise you should periodically pause thereafter to make sure everyone is still happy and being rewarded fairly for their efforts.
I speak from experience. But while it’s regrettable I wasn’t a true partner in one or two businesses I’ve been involved in, it’s also true that other, even better, opportunities came up.
There is always something else on the horizon, so don’t be afraid of walking away and starting again – it’s amazingly invigorating.
Next time, and every time, you enter into business with someone, get the deal sorted up front. Have team workshops, ask and answer the tough questions, agree on roles and...
agreements.” formalise your agreements.
LanceLance WiggsWiggs finds that investing money is a lot more fun than raising it. He tweets at @lancewiggs, offers highly expensive consulting services and after five years is finally admitting he lives in Auckland.