to ditch my business partner?

[PenguinBollard]

We met abroad whilst working for the same company in a rather niche job role - I'd rather not disclose it because it'll probably be too revealing, so let's say Clown.

I'd been thinking of setting up a Clown recruitment agency for a while, and the thought had occurred to her too and decided shortly after meeting that we should do it together.

I'd been putting off setting up because I was worried about handling clients (I'm not a sales-type really) and she seemed an ideal partner because of her extreme confidence and charisma. All good.

I immediately started on branding, built a website, built a database blah blah but she kept on putting it off, next month, next month, next month so we didn't end up actually opening until 12 months later.

I left my job at the same time as the business started, and began working FT on it. She said she would hand in her notice.

This was back in May - she is still working FT as a Clown. This means 10-12 hours a day, 6 days a week (it's hard work Clowning) that she is at work and not available to contact.

In the meantime, I'm working 12 hours a day Mon-Sat, only 6 or 7 on Sundays - running the agency.

The original plan was that she would be bringing in the Clients - but she has failed to bring in any, all of the clients have found us through the marketing that I've been doing online.

After a couple of months, I got sick of doing all the work so we agreed that she would take on Clown interviews - a client would want a clown, I'd find the candidates, shortlist them, background check them etc etc - and she would conduct the registration interviews - about 20 mins of time but a relief to me, partly because I hate doing them.

Except, I've got to arrange these interviews - around her work schedule, around the clown's current work schedule - and then act as her PA to remind her to take the calls.

She repeatedly is late making the calls, and has actually forgotten entirely more than 6 times - last week a candidate was left waiting 2 hours whilst I was desperately trying to get ahold of BP to make the call.
One time, I arranged 5 calls only to have her ask me to rearrange them 30 mins beforehand because she wanted to go to a party.

She has told me the business is her life and she's constantly promoting it - but we never get new clients from her. She bought in 1 client, once, right at the beginning who was a mutual friend.

Obviously whilst she's working FT she can't work properly for the business anyway, but I don't really see what she can add to the business even if she leaves - she doesn't have the technical knowledge to do any of the online stuff, including marketing, and I don't trust her to do admin properly.
The business makes A LOT more than she makes working as a Clown anyway.
At the moment its all split 50/50 so she's making a fortune doing very little. (I worked out she basically gets about £3,000 for every 20 minute interview the other day)
In fact, a full time Clown Recruitment Consultant would be paid a lot less, and get a lot more done.

But this business was meant to be our baby, and I feel horrifically guilty at the idea of dumping her. I know that she won't understand the reasons why even if I explained, and would make a massive fuss about how I betrayed her - which I guess leaving her would be a betrayal?

I know that business is cold, and harsh etc - but I'm not and I don't want to become that person.

you have been paying yourself an appropriate salary/hourly rate haven't you?

No, the idea was that we contribute 50/50 and divide profits 50/50

So my salary is my 50% share

Meet up with her at a neutral place, such as a spa.

😂 Only on MN would it be suggested that a contentious business meeting is held at a spa.

Can I be the first to say tell her to stop clowning around?

Tell her if she actually wants to be kept in the business she needs to bring in the same amount of business you have already made. She has some big shoes to fill

Seriously though, she's taking the piss. Get rid. Do not feel guilty.

*No, the idea was that we contribute 50/50 and divide profits 50/50

So my salary is my 50% share*

But that doesn't happen so get rid of the dead weight. You are giving away 50% of the profits for her making a couple of phone calls. Stop being nice whilst she is taking the piss out of you.

Two clowns in a spa now that sounds like the beginning of a joke.

Wow. She’s doing well out of you isn’t she. You need to dump her. How about phrasing it along the lines of: “I’ve decided to go my own way and develop the business in the way I’d like. We’re putting in very different hours and effort, and I’ve got a clear idea of the direction I’m going to develop the business. It won’t sustain us both on the current inputs, so after these two clients are done, I’ll wind up the accounts and pay you your share for the work you’ve put in. If you can send me a breakdown of your hours that would be great.”

Given you’ve set everything up, do all the accounts, understand the structure between the business and the brand, you’re in an ideal position to walk away with what you need to continue the brand, even if the business name changes and it’s a newly formed ltd company / sole trader / whatever.

However, be prepared for “oh but I’m just about to quit my job to come in with you full time” and be ready to be very firm and keep saying you’re all set to go it alone.

Tell her if she actually wants to be kept in the business she needs to bring in the same amount of business you have already made. She has some big shoes to fill

[snort]

“I’ve decided to go my own way and develop the business in the way I’d like. We’re putting in very different hours and effort, and I’ve got a clear idea of the direction I’m going to develop the business. It won’t sustain us both on the current inputs, so after these two clients are done, I’ll wind up the accounts and pay you your share for the work you’ve put in. If you can send me a breakdown of your hours that would be great.”

This is excellent.

No, the idea was that we contribute 50/50 and divide profits 50/50. So my salary is my 50% share

I am SHOCKED at this. I've seen it happen before but the person involved is someone I love dearly but a complete mug. I honestly didn't think I would ever see it again.

It would be perfectly reasonable to stay paying yourself a salary to reflect your full time work and then to say that profits are shared 50/50 after that. IF she was doing ANYTHING and you REALLY didn't want to get rid of her. But she is getting a salary and half the profits. This is outrageous.

Having said that it's reasonable to get a salary and share the remainder, I'll also say I think you'd be a fool to do that now. that's how it should have been set up originally but as it wasn't, you have to accept that this woman may seem like a really nice person but she's not. She's at best a CF. But really, she's a complete fraud. I don't believe for one second that she's oblivious to the fact that she's earning significantly more between her profits and salary and doing significantly less of the work!!!

So she's getting her FT wages on top of 50% of profits from your company? Does she split her wages with you? It all seems like a very unfair split of work/income.

{oh, and for the love of everything you believe in, cancel the friendship too. The person in my story didn't and it never ceases to amaze me how these people are still taking advantage of him.

In retrospect, the concept of drawing a salary for working hours and then splitting the profits seems sensible and fair.
At the time though, the idea was that we'd both be working FT on the business and we'd simply split the earnings.

To clarify that there are no "salaries" coming from the agency, just a split of the profits.

So I'm receiving 50% of the profit.

She is receiving 50% of the profit, plus her salary from her Clown job.

To play devil's advocate, I chose to quit my job to pursue the business FT - she may ask why she should be penalised because I quit my job. (Which was actually higher paid than hers, so I had more to lose as it were)

@PenguinBollard you really should have raised this before you paid any money to her as the original agreement had already been broken. Regardless of what you do going forward you need to raise this now, point out that you are not being paid for your time, and deduct it from the profits before you pay her any more.

From what you've said, you have 2 clients, one she found, the other you found. How many hours work have you done and how many hours has she contributed?

Ditch her without a second thought.

It isn't profit if you haven't paid yourself a wage.
Wages are costs.
Profit is turnover.minus costs.

You must of course dissolve the partnership.

Did you have a written Partnership agreement? If not, the assumption is that assets and income are divided equally. If value is significant you need professional advice.

Make sure you have all the contact details of clients and prospects written in your own personal notebooks. They will be of some value when you set up independently.

From what you've said, you have 2 clients

Sorry for the confusion.
Since starting with have had many clients - she has found 1 of these who was a mutual friend (ie. no hours put in or marketing expense).

We currently have 2 clients outstanding - so to me it seems fair to draw the line under those.

I have worked 6.5 days a week for the past 6 months on this (average 10-11 hours, min 8 hours) with tangible results - ie. all the other clients, the website, the branding, all marketing materials, the advertising for vacancies etc etc.

To make a [very] approximate guess, I've put in 1,872 hours since the business launched. This isn't including the work put in before.

She literally couldn't match these hours as she works FT, and the only tangible results she's had is interviewing the candidates I've organised for her. She has spent about 15 hours or so interviewing candidates, she used to be the only point of contact for clients but the last few months I've been logging into her emails and doing it for her because she hasn't been able to do it for various reasons - but let's say she spends 3 hours per week talking to clients.
So that brings us to 93 hours.

She says she spends all night messaging potential clients to drum up business, but I don't really know if this is true as nothing has come of it - I don't really know how to calculate that in terms of billable hours, because it has had no results?

In short:

Me: 1,872 of recordable hours over the last 6 months
Business Partner: 93 recordable hours over the last 6 months*

*but as I say, she's been contacting potential clients, I don't know how to measure this

If she has been messaging potential clients and some of them come through after you dissolve the partnership, be prepared for her to ask for some form of payment, commission for that.

You’re doing the right thing, OP. And the Clown stuff is making me Chuckles...

She's taking the piss, of course she is. And it's clearly not going to work with her.

But without meaning to be blunt, if you aren't confident handling clients, and you don't like doing simple 20 minute phone conversations, recruitment really isn't for you.

It's a people business, you can build the strongest database and have the best marketing strategy but you absolutely have to be confident with clients and with interviewing (I'm saying this as someone with a long career in recruitment)

It doesnt mattwe what she says she is doing it is how effective she is being. I'd disolve the partnership and go it alone.

If this is as profitable as you say, I would really consider seeing a solicitor to get advice on the best way to terminate the relationship. You do not want her causing problems in the future for the business (ie disputing who owns IP). They can also advise you on the best structure for the business going forward. A good solicitor would have been alive to a lot of the current problems if you had seen one when setting up and might have saved you some grief. I know solicitors are expensive but in this case I think they would have been worth their money.

How is she messaging these potential new clients? If it's by email, surely you can see them, if you can log in to her email? The first thing I would do is ask her for a list of all the clients she has contacted. You really should have done that anyway as you are also doing marketing from what you say so you shouldn't be doubling up, it will make you look unprofessional. It will also clarify the position if you do dissolve the partnership and work comes in from clients she contacted (or protect you from her claiming that). If you don't know who she contacted, it could be possible that the clients you thought you brought on board could have already been contacted by her.

How is she messaging these potential new clients?

WhatsApp - I think she has been working her way through her social circle. Contacting employers she used to work for etc.

If she has been messaging potential clients and some of them come through after you dissolve the partnership, be prepared for her to ask for some form of payment, commission for that.

Absolutely. I wouldn't want to fleece her.