Getting screwed in a business partnership

Getting involved in a start-up is risky business, you need to carefully choose your industry, business structure, organisational design, secure suppliers and canvass clients; but most importantly, if getting involved in a partnership - choose your business partner carefully.

Mine is a particularly interesting scenario because my business partner lived outside of the country for more than half the year. You can see where this is going right, business gets difficult, partner is uncontactable, doesn't return and you, living in the country the business is operating are required to clean up the mess. Ok, no gold stars for that one.

First, you have to question my motivation for getting into such a business, that would be fair. My partner wanted to move to Australia and set up a life, as he didn't want to work a standard job despite having qualifications in demand, a small business is the next step. So purchasing or setting up a business is the next option, we chose the later. 

My motivation was to allow him to realise such a dream, instead what I got was left with paying the bills, legal action brought about by his actions alone and the extra tax burden. Even during the court, appearances, the plaintiff wanted to face his chief tormentor. 

He was genuinely disappointed he failed to show - so was I. He even went as far to explain under oath that he had no problem with me; he actually stated I did the best I could under the circumstances, paying him from my own bank account. 

What happened to my dream of financial independence? Straight down the toilet. Had I not resigned my director's position in the company, I would not be able to manage my retirement fund.

A director can not allow a business to operate whilst insolvent. He, of course, got off scott free while I attended court cases brought about by his failure to pay staff correctly and punctually - he just ignored them.

We actually had some good staff we had to unload because of personal relationships, an arrogance not wanting to work with certain people is normally reserved for the high flyers. I have worked at companies where the worker did a good job.

Bringing in business, making money for the company and generally doing a good job is what you want - but are real arseholes to deal with. Without a doubt, a nice guy losing money or an arsehole making money isn't a hard choice, or so I thought.

For my part in the business, I wasn't exactly a silent partner, I assisted in an operational sense when required on weekends and drove the planning and strategic agenda. As I was employed full-time in a field I enjoyed.

I was not about to resign my position I had worked hard to gain only to take up a job in an industry I had left earlier because I hated dealing with all the lies. This is generally a lifestyle business and does not attract hard core business people seeking profits.

A start-up is generally under capitalised, cash flows are initially subdued and a business is usually on the brink of collapse during the initial two years, profits are sunk back into the business, I never pulled a wage or withdrew any capital, in fact, I invested further capital. 

The next three years are tight too, if you get to five years, then you are generally set as revenues are greater than outflows and you have established a client base and revenue stream. As I was employed full-time already, I not only used my salary to live on, my salary also further capitalised the business.

Of course, my partner was unemployed in such a sense, he was free to clock in the business daily overseeing operations, generating new business, maintaining the accounts and supervising staff. My involvement required weeknights after my full-time commitments had finished for the day, weekends and days off from work.

So now my partner has a second newborn child; naturally, I found out by other sources. I am apparently not that important to him; he didn't feel compelled to share such a life event, pretty much makes a mockery of my intentions to allow him to settle in Australia. 

My family think the child should be named after me; their reasoning is that I am a major contributor to the funding of the child, at least they have their sense of humour left intact. 

So now I know, my motivation to allow him to set-up a business in Australia has amounted to a personal crushing debt, an extra tax burden, debt collectors, creditors, damage to my personal reputation, health issues and my credit rating.

Choose your partner carefully; I didn't, my business partner was chosen on the basis of friendship and the willingness to work together allowing him to move and settle in Australia. He took advantage of my loyalty, my misplaced trust and willingness to do the right thing. 

That is why I paid off all the creditors while he fled the country never to face anyone. He knows it is difficult for me to take legal action internationally; it would cost me more than the actual debt to pursue, he hides behind such assumptions never to face the people he burnt.