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How Do I Handle This Kind Of Business?

by Brotherly
4 replies
A friend of mine who happens to be my tenant currently runs a flour distribution business (small scale) from a store i let out to him. He gets the flour from the flour manufacturing company and breaks down the chain of supply.

Bread baking & consumption is high in my neighbourhood and the good thing is that he currently has established bakers and clients who readily buy bags of flour from him. But the down side is that he's not lettered.

For sometime now, he's been having liquidity issues and last year (2014) an Angel Investor came to the scene and invested close to N1m (One Million Naira) which is about $5400 and returns on investment to the Angel Investor amounted to close to N1.2m which is about $6480 at the end of year (December 2014).

This friend of mine is unhappy & furious and he said that last year to him was like he slaved for the Investor and nothing seemed to come his way as compared to the Investor in terms of returns. He said he doesn't want to work with the investor anymore.

This friend of mine called me early this year and asked that we partner and run the business together. Initially, i was thinking it was a ploy by him not to pay his rent but on a second thought, after appraising the viability of the business, i'm tempted to inject some funds into the business.

Now, i'm beginning to look at the prospect of taking the business to a next level. I've been brainstorming and also trying to articulate my thoughts on it but i can't seem to get a good handle on it and how to go about it.

Veterans in the house, i need your guidance & counsel. What would you do if you are in my shoes?

1. What steps would you take in pushing the business to the next level?
2. As regards agreement & documentation, since the chap can't read and write, what would you do to secure your investment?
3. Would it be ideal to have a business website for it now?
4. What would you do to become the "go-to-guy" for flour purchase in your community, and possibly your state?
5. Any other information will be highly appreciated.

Thanks in advance.

Regards.
#business #handle #kind
  • Profile picture of the author DABK
    I don't know Nigeria, how many people have internet access and all that. But the answer to the website question is: If prospects have websites and/or use the internet to find suppliers, you need a website. If they do not, obviously, you do not.

    If they do not, can he/you do any of these:
    networking?
    ads in publications (are there publications for bakers only? for pastry stores only?)
    cold calling
    phone book ad
    walk-ins?
    Are there pastry chef schools around? Are there restaurants that make their own bread/pastries?
    Are there stores that sell flour directly to the public?

    Perhaps, the first thing you could do is make a list of all the possible types of businesses that need flour.


    Originally Posted by Brotherly View Post

    A friend of mine who happens to be my tenant currently runs a flour distribution business (small scale) from a store i let out to him. He gets the flour from the flour manufacturing company and breaks down the chain of supply.

    Bread baking & consumption is high in my neighbourhood and the good thing is that he currently has established bakers and clients who readily buy bags of flour from him. But the down side is that he's not lettered.

    For sometime now, he's been having liquidity issues and last year (2014) an Angel Investor came to the scene and invested close to N1m (One Million Naira) which is about $5400 and returns on investment to the Angel Investor amounted to close to N1.2m which is about $6480 at the end of year (December 2014).

    This friend of mine is unhappy & furious and he said that last year to him was like he slaved for the Investor and nothing seemed to come his way as compared to the Investor in terms of returns. He said he doesn't want to work with the investor anymore.

    This friend of mine called me early this year and asked that we partner and run the business together. Initially, i was thinking it was a ploy by him not to pay his rent but on a second thought, after appraising the viability of the business, i'm tempted to inject some funds into the business.

    Now, i'm beginning to look at the prospect of taking the business to a next level. I've been brainstorming and also trying to articulate my thoughts on it but i can't seem to get a good handle on it and how to go about it.

    Veterans in the house, i need your guidance & counsel. What would you do if you are in my shoes?

    1. What steps would you take in pushing the business to the next level?
    2. As regards agreement & documentation, since the chap can't read and write, what would you do to secure your investment?
    3. Would it be ideal to have a business website for it now?
    4. What would you do to become the "go-to-guy" for flour purchase in your community, and possibly your state?
    5. Any other information will be highly appreciated.

    Thanks in advance.

    Regards.
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  • Profile picture of the author Peter Lessard
    Don't do this!
    If this person is a friend you value I 100% guarantee there will be no friendship in short order if you do this deal.

    You should only do this if:
    1. You don't care about the friendship
    2. You feel like being in charge and having an employee.
    3. You are good with the fact that at some point you will own the whole thing and don't care if your friend hates you.

    Look at the facts.

    Obviously this man is not a good business man therefore not a good partner. He is a good worker.

    He already feels like a "slave" to the previous investor yet he chose to make the deal (again not good businessman). Imagine how much of a slave he will feel like to you? Not only will you have money in this but you will even own the roof that he works under.

    This is a complete disaster in the making just waiting to happen under a partnership.

    If you want into this business so badly and think it would help him then just buy the business and hire him as an employee. Be prepared to fire him when the "friendship" gets in the way of him delivering like an employee would.

    Harsh reality but it's how I see it from years of seeing situations like this play out.
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  • Profile picture of the author IMAnthony
    Originally Posted by Brotherly View Post

    This friend of mine called me early this year and asked that we partner and run the business together.

    Why did he ASKED YOU to be his partner? Does he know you do marketing stuff?
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    PAY ATTENTION TO THIS!!



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  • Profile picture of the author JosephI
    Totally agree with Peter. The only way you can grow is to buy him out and have him work for you.
    Be prepared to replace him and lose as friend.

    If you're getting the rent and a return on your investment and he's happy, then leave well enough alone
    and collect whatever ROI you have now for a long time.
    Cheers

    PS: find another business to invest the profits.
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