View Full Version : Business Nightmares
07-05-2008, 11:49 AM
Rachel Elnaugh has announced her new book- Business Nightmares (see http://www.shell-livewire.org/news/?catid=latest&artid=1210155780.123) with some famous names sharing their nightmare moments in business. We at Shell Livewire are wondering if anyone has had similar experiences.
We would be interested if anyone wants to share their stories of ‘when things go pear shaped’ and how you managed to overcome them? You can post them on this thread or why not blog it on the Social Network at www.shell-livewire.com/network- remember you just log in with your usual Livewire details.
Yes, I had my own special "Business Nightmare" when Red Letter Days went into administration owing me a load of money.
07-05-2008, 01:13 PM
Far too many business nightmares, or as I like to call them "learning experiences"...here's just one.
When I was running a management consultancy business in the early 1980's (yes, I know, way too old for this forum) I met up with a talented furniture maker who was unemployed and just making things for family & friends.
After a couple of discussions, I helped him but togetehr a business plan and grant applications, lo and behold, he became a business owner with over £6,000 in grant aid.
A year went by and he called to see me again, his business was not taking off as much as he would like, he spent all of his time in the wokrshop and not enough time on marketing, which meant that for three months he would go out and sell his products and spend the next six months fullfilling orders, but this process meant that he only had real income for 6 months of the year.
After going through a range of optins, he convinced me to give up my management consultancy and go to work for him as a Marketing Director .
Within 2 months I had made sales 100% more than he had achieved in the last year and he had to take on three members of staff to cope with the orders.
What was my mistake? I was confident in my ability, so I agreed to work on commission, 10% of gross sales.
Within 6 months, we set up a new retail arm of the business as a limited company and secured high street premises, where became MD of the company (but again agreed a commission rate for the job).
All went well for 6 months, I earned on average £700 a week, which for the 1980's, was very respectable.
Towards the end of the first year working together I had a really good week, taking orders for £15,000 of goods (with 20% deposits), so I had earned £1500 for that week...then came the problem.
Although I had helped this person build a business from his hobby, got the grants to help him set up, made sales that he had never dreamed possible and helped him put away several £1,000's into savings bonds (and a nice holiday abroad), he decided that he could not afford to pay me 10% commission on sales of £15,000.
He called into the shop at end of business for the month, paid me the £1,5000 as we had agreed and told me that the future commission would be 5%, no discussion, take it or leave it.
I promptly gave him the keys to the shop, resigned as a Director and walked away.
Within 12 months, the shop closed, his workshop closed and all staff made redundant.
He now blames me for the collapse of his business.
It would be interesting to hear how others would have handled the issue....
07-05-2008, 11:38 PM
Ah well i have had a few disasters in my time but the real killer was doing nothing and chucking good money after bad. if i just had had the balls to close the company and go and do something else i would have saved a fortune and a couple of years of my life.
On bills point. if you negotiate a comission and the sales person sells twice what you expected..pay him and smile, he deserves it. I have often had salesmen earn more than me. Dont be cheap. It is a variable cost so celebrate it. But dont pay all the commission until the customer pays for the work. It is easy to get sales by giving credit to companies that are going under. The sales commission should depend on the sucess of the sale. If others took this line there would be no sub prime collapse.
12-05-2008, 08:30 PM
I heard about this book and the thing that I found very funny about it is that I went into my local Waterstones book shop who said that they dont stock the book because it is not in high demand lol!
Other than that, I think its a great idea - cant wait to get my hands on a copy.
12-05-2008, 09:53 PM
I agree - its not a nightmare its a lesson.
To cut a long story short, my supplier went bankrupt with £15k of our money. We caught up with him and got 50% of the cash back two years later. Perhaps a few wrong decisions were made which I have learnt from but I feel Im lost a little of my families faith in my business acumnen.
Three years on and I am employed part time and self employed part time. I think the family have concerns that it will happen again.
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