The perils of going into business with friends

Unfortunately, this is something that I have encountered multiple times in my life and in every single one of the situations, two of which were relatively major, it has always failed.

I don't know if this is a common statement or mantra but it should be:

"Don't go into business with a friend, because you are going to lose at least one of them."

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When I opened a business in Thailand it rapidly became one of the most successful businesses of its type. I'd like to say that this is because I am a master of industry but that isn't the case. There was just a series of events that happened that made success quite easy for me such as a rapidly growing industry, lack of competition, and me having a technological background that enabled me to advertise and reach new customers a lot better than any of my competition. This was a while ago though folks. Facebook didn't even exist when I started to give you an idea of how long ago this was.

Anyway, my business was absolutely killing it to the point where other businesses started copying my design and one place even paid to have my sign copied word for word including the logo and business name. We took legal action and made them change it.

Later, I expanded to two additional locations and things were going fine for years. However, like a lot of things that require a lot of your time; after 7 years of working 15 hour days and almost never having days off, I started to lose interest in the whole thing. Business wasn't suffering due to lack of attention... yet... but I could tell that it would as I started to just get drunk every day and became one of my bar's best customers. My health was taking a hard hit because of this. I recall many days being so hungover when I was opening one of my restaurants in the morning that I would start every day off with a large coffee with a double shot of Baileys and then follow that up with pineapple juice mixed with coconut rum.

Because I saw the writing on the wall and how my business would eventually self-destruct without some major changes, I offered a friend of mine a novel opportunity: I would give him control of one of my establishments and he would keep all the profits minus a "franchise fee" of sorts. This was basically a gift on my part because I had already done all the heavy lifting by establishing and popularizing the location.

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_{This is not the bar in question, but basically we were SLAMMED every single night}

Because he was a friend, we didn't get any lawyers involved and although there was a contract of sorts, it was in no way legally binding.

This was a seasonal industry and I had 7 years of experience in it so I warned this friend of mine time and time again that when the money is coming in hand over fist during tourist season, to not go wild with personal purchases since all of my businesses operated in the red during what was known as "low season." Basically you could give stuff away and still not have customers during 4 months of the year.

It didn't take long before I noticed him making lavish purchases such as new guitars, TV's, a motorbike, and even a car. Basically, he didn't listen to anything that I warned him about as far as the need to save all of those profits from high season and only after low season has passed should big purchases be made.

Lo and behold, low season hit and he was having trouble even paying the rent. The sales receipts started to become suspiciously low and this was extremely obvious to me since I had already run this same business for more than half a decade and knew what sort of numbers to expect. Basically, my "pal" was fucking me over and he wasn't even being terribly clever in how he was "cooking the books."

Every month when it came time to hand over the pittance of my part of the profits, a near fight would ensue and he would actually accuse me of stealing from him even though I handed him a successful business, told him EXACTLY what he needed to do in order to make money with it, and didn't even charge him anything for what was contained inside the business. This business wasn't a huge one, but normally when a business of this magnitude would trade owners, tens of thousands of dollars would change hands. I knew he didn't have tens of thousands of dollars so I did him an extremely solid favor.

Fast-forward a year and a half and every interaction I had with the guy was a battle of words, some of which nearly became physical violence. At that point in time I estimate that he had already stolen $10,000 in unpaid profits from me and then one day I was contacted by the land-owner and was told that "if we didn't pay the rent in the next 7 days the police were going to come remove us from the premises."

Dude hadn't been paying the rent for months and was lying to me about that as well.

I was able to get the rent out of him for those months and then told him that "we are done here" and our business arrangement was over. Thankfully no authorities had to get involved but when I went to do an inspection of what was once again my bar and restaurant, I found out that he and his wife had not been maintaining or replacing anything in the place either. Everything was broken.

I offered a friend of mine a sweet deal that nobody ever gets offered and he completely screwed me over. He had also tarnished my business name a bit by serving sub-standard food and even refilling premium spirit bottles with knock-off copies. Not only is this a bad business practice but it is highly illegal.

I was able to salvage the business with an apology tour of sorts and then later sold the pub, properly this time with lawyers involved, and have put that dark part of my past behind me. Me and the guy that had previously been one of my best friends have not spoken to each other ever since and this was over a decade ago. I'd like to say that he had some plan to pay me back the thousands of dollars that he stole from me but as it turns out he has been extremely unsuccessful in everything he has done ever since. Even if I were to sue him, there is nothing to take.

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People concoct what they believe to be great business ideas with friends on a regular basis but I'm telling you right now from experience do NOT do it! If you are glutton for punishment at least get rock solid legal contracts written up with genuine consequences if one party violates it. You might think that a "handshake agreement" is enough between friends but money has a tendency to drive people apart.

You would think that I would have learned my lesson from this but unfortunately this would not end up being the last time I made this mistake. I'll get into those, one of which is even worse... at a later time.