My Friend Offered To Start My Business

Business By TheBlonde Updated 4 Jan 2011 , 3:47pm by -K8memphis

TheBlonde Posted 27 Dec 2010 , 11:08pm
post #1 of 25

So I have this friend. We have been friends for 15 years now and he's been staying at my house for the past month while he is on leave from the military. Anyways, we were talking the other night and out of the blue he offered to give me all the money I need to open my own bakery. I don't know what to do! I LOVE my day job which has nothing to do with baking but I've always dreamed of opening my own shop. (I'm a manager and my company has been sending me on quite a few business trips. I really do love my job) I'm a single mom to my 6 year old daughter though and I need the steady paycheck. Really though, how many people get this chance? I wouldn't even have to pay him back, he would just be the co-owner...I'm so confused right now!!!

24 replies
cownsj Posted 27 Dec 2010 , 11:18pm
post #2 of 25

That's quite an offer. Congratulations. Before you even think to get to the step of spending money, I'd make sure you have a good, solid business plan, and contract with your friend. It will protect both of you and spell things out very clearly. That's vital to any business and will tell you if this is really a good idea or not. You might not find it's worth it at all, or you may find you are better off starting it part time, or jump right in.

Just remember that it's very difficult to mix friends and money. Ask yourself too if that is worth the risk. Even with it being a "gift" and him being a partner. If it doesn't work, he could end up resenting you, and if it's a huge success you may resent his ownership. Just more food for thought.

justducky Posted 27 Dec 2010 , 11:21pm
post #3 of 25

What a great opportunity. If you have not already done so, do up a business plan and see if this is finacially feasible for you.

Best of luck! This is very exciting.

-K8memphis Posted 27 Dec 2010 , 11:31pm
post #4 of 25

I would preserve the friendship at all costs. Since you have a good job keep it. Opening a bakery doesn't give you the benefits you have with your job. Maybe if kidlette was 17 and her college was secure and she could help.

Just from what you wrote there--no don't do it.

"I won't even have to pay him back He would just be the co-owner."

Oh my. What does that mean? No no no no no no no.
Very nice very gracious very kind offer. Mmmno.

Why wouldn't you have to pay him back? Are you kidding? If it sounds too good to be true...so what skills does he bring to the table? What kind of owner would he make? He would sorta be your boss if it's all his money y'know.

I'm not saying it can't be done. But why leave a great job you love when you have a munchkin to provide for? In this economy?

Karen421 Posted 27 Dec 2010 , 11:44pm
post #5 of 25

I too would suggest you carefully think this out. Going into business with friends isn't always a good idea. Make a business plan, have him review it, see how that goes. Good Luck!!!!

MalibuBakinBarbie Posted 28 Dec 2010 , 12:41am
post #6 of 25

It's exciting to hear that you have someone willing to fund your dream. Just please think it through carefully. I know it's a "chance of a lifetime", but you have a lot at stake. If you move forward with it, be sure to do a thorough business plan, have a detailed contract agreement with your friend and be fully familiar with all facets of running a food service operation. Also, I am sure your friend is offering because he believes in you and your talents, and that is a wonderful compliment. I'm not taking anything away from that (so please don't think that), but many start up businesses do not succeed and this is an incredibly difficult economy for a new business venture. I just saw a forum topic here about confectionary businesses experiencing losses due to the economy. My point is, what if (heaven forbid) your business had to fold? Based on what you wrote, I can only wonder if your friendship could withstand that, considering your friend would be financing everything for you. And how would you feel if it didn't work out, knowing he may be out all of the money he invested in the endeavor? Then of course, there's the steady income thing, and the time investment thing, etc...

I know it sounds like a dream come true, and I am so happy that you were offered this opportunity. But please-please-please think it through from all angles. Sounds like you have a very special friend. (And I'm with K8memphis, about preserving your friendship.) Sincerest wishes for the best for you!!! icon_smile.gif

leepat Posted 28 Dec 2010 , 11:50am
post #7 of 25

I have been in business for 4 years now and have just started breaking even. Can you afford to go without a paycheck for that long? Wait until you are more secure financially.

leah_s Posted 28 Dec 2010 , 1:38pm
post #8 of 25

1. Definitely do the business plan. A thorough biz plan. Done right, and working on it nearly full time, that in itself could take 6 weeks.
2. If he's the co-owner, it's simply not YOUR business. As co-owner he gets input on each and every business decision. In fact since he's putting up the $, he probably is the "more equal" partner. What knowledge, skills and expertise does he bring to the table?
3. Give up a job with benefits as a single mom in this economy? No way baby.
4. Leepat's experience is valid about not being able to take a salary.
5. What have you always heard about things that seem to good to be true?
6. Proceed with extreme caution. The upside is that everything works out perfectly and you make a ton of money. The downside is that he loses his $, gets mad and sues you, takes whatever you have including your child's college fund and your house and you're not only broke, you've been out of the job market for a year or so in a down economy. Weigh the potential upside and downside carefully.

cabecakes Posted 28 Dec 2010 , 1:40pm
post #9 of 25

I would investigate the marketability of this type of business in your area thoroughly before even considering let your friend invest his money. You don't list your location, and it varies from state to state (heck, even city to city). Also family and friends in investments are not always a good thing. I have seen this first hand, between my mother and my aunt. "What could go wrong, they're sisters (close sisters)." I would still be typing tomorrow if I tried to even begin to spill out the tale. I would say 1) check market, 2) business plan, 3) very specific contract defining roles of both parties and profit split. I would make it very clear that while he is investing the money, you have complete control in operations and management, and he will simply be recieving his pre-determined percentage of profits and only after operational expenses and upgrades have been met. I know we never like to think that our friends or family would have a hidden agenda, but I'm just saying be very careful. Is this business worth losing your friend for. I may be all wrong, but it sounds like you are maybe more then just friends, maybe at least on his part. Would it be worth losing this relationship. It is a lot of work opening and keeping open your own business. This is one reason why my mother and sister's business failed. They worked mostly 12-16 hours a day/6 days a week, sometimes 7.

TheBlonde Posted 28 Dec 2010 , 2:10pm
post #10 of 25

You all have very valid points. I know this may sound nieve but nothing could ruin this friendship...He has been such a great friend to me for the past 15 years. And yes, I know he wants more than friendship but we have discussed this MANY times and he knows we are to remain just really close friends.

The bottom line is that he has A LOT of money and likes to spend it icon_smile.gif. He lives about 13 hours away. He told me that it would be my store and that I would have full control over everything. He would just share in the profit if there was one.

This is nothing that needs to be done immediately. I have as much time as I want...years even. If I decided to go through with this it would still be years before I got it up and running. Like I said, I love my job. It's nice to have this as an option though...

leily Posted 28 Dec 2010 , 2:34pm
post #11 of 25

As others have said, do a business plan first.... it doesn't matter where the money comes from you need to do this so YOU know what to expect from the business and what you need to do.

Also, even though it's a really good friend. Get a lawyer and have everything drawn up in legal documents on where the money is coming from, and what the expectations are for receiving any compensation (on both sides). It's not to ruin a friendship, it's to protect both of you.

costumeczar Posted 29 Dec 2010 , 7:48pm
post #12 of 25

[quote="TheBlonde"]You all have very valid points. I know this may sound nieve but nothing could ruin this friendship...He has been such a great friend to me for the past 15 years. And yes, I know he wants more than friendship but we have discussed this MANY times and he knows we are to remain just really close friends.

The bottom line is that he has A LOT of money and likes to spend it icon_smile.gif. He lives about 13 hours away. He told me that it would be my store and that I would have full control over everything. He would just share in the profit if there was one.
quote]

Based on the "he wants more" you're playing with fire. Money is the one thing that can ruin an un-ruinable friendship, so be careful. If you do eventually decide to take him up on his offer, you should go through an attorney to write the contracts necessary to make sure that 1. You really don't have to pay the money back if that's why he's saying, 2. That he really has no say in the day-to-day, and 3. How much of the profits will be his at the end of the day.

DO NOT write something up yourselves, this is a keg of dynamite situation even if it doesn't look like it to you at this point. You need something written by a pro who knows what kinds of situations can arise and how to avoid them.

cakesdelight Posted 29 Dec 2010 , 8:30pm
post #13 of 25

[quote="costumeczar"]

Quote:
Originally Posted by TheBlonde

You all have very valid points. I know this may sound nieve but nothing could ruin this friendship...He has been such a great friend to me for the past 15 years. And yes, I know he wants more than friendship but we have discussed this MANY times and he knows we are to remain just really close friends.

The bottom line is that he has A LOT of money and likes to spend it icon_smile.gif. He lives about 13 hours away. He told me that it would be my store and that I would have full control over everything. He would just share in the profit if there was one.
quote]

Based on the "he wants more" you're playing with fire. Money is the one thing that can ruin an un-ruinable friendship, so be careful. If you do eventually decide to take him up on his offer, you should go through an attorney to write the contracts necessary to make sure that 1. You really don't have to pay the money back if that's why he's saying, 2. That he really has no say in the day-to-day, and 3. How much of the profits will be his at the end of the day.

DO NOT write something up yourselves, this is a keg of dynamite situation even if it doesn't look like it to you at this point. You need something written by a pro who knows what kinds of situations can arise and how to avoid them.





My Mentor before she passed away gave me the BEST advice anyone could ever give me! She Said "Money Ends All Friendships; I asked her to explain that and she said to me " once someone lends/gives/invest money to you it become a business relationship...and if that person should ever get upset they'll always bring up the money..."

My advice to you Blonde... work for what you want... that way if you succeed its yours if you dont succeed its your failure not someones money you failed with... GOOD LUCK TO YOU! icon_smile.gif

KakesbyKris Posted 29 Dec 2010 , 8:43pm
post #14 of 25

After reading the OP's second post the first thing that came to mind was the episode of Friends where a very Wealthy man is interested in Monica, but she isn't interested in him in that way. He offers her the Head Chef (her dream job) at one of his restaurants. His hope is that she will become more interested in him as time goes on and he gives her everything she wants.

My feeling is that this is the friend's alterior motive.

Put everything else aside, and think of this as a woman. I think he is offering to provide you your dream to get you to see him in a different light.

JMHO

Good Luck in whatever you decide.

Auryn Posted 29 Dec 2010 , 9:11pm
post #15 of 25

My advice is - don't do it
but I will give you a reason that has not been brought up before.

You mentioned you are a single mom with a 6 year old.
Granted right now you have to go on lots of business trips that although you enjoy take you away from your child- however when you are not on those trips- you have a regular schedule, your home by 6 pm(or whatever time) and your weekends are yours.

Take the following as the experience of a child with parents that have always owned their own business in one form or another the entire almost 30 years of my life.
Because you won't be having a steady paycheck, as a general rule you will be spending even less time with your child, unless you get your child involved in your business- in which case you are going to have to walk a very fine line in making sure they are never aware of the financial stress you will be going through.

Yes being self employed allows you more leaway- if there is a play or field trip coming up you can try to schedule around it- however the sugar world is very labor and time intensive.
You will be staying up very late lots of nights working on different cakes cookies etc.
If you do wedding cakes you won't have a saturday with your child until after 5 pm.

My parents were (still are) together as I was growing up- so one of them could mind the shop while the other could take us to the doctor/dentist, make dinner, come to my volleyball games etc.
You won't have anyone to pick up that slack for you.

kelleym Posted 29 Dec 2010 , 11:38pm
post #16 of 25
Quote:
Quote:

And yes, I know he wants more than friendship but we have discussed this MANY times and he knows we are to remain just really close friends.



Ohhhhh dear. I think you need to step back and pretend that you are reading your story as if it were someone else's. Would you recommend that this woman take this man's money?

He wants more than friendship, and he will do just about anything to get it. It doesn't matter if he has a trillion dollars, I honestly believe that it would be immoral to take his money. (And yes, that storyline on Friends immediately jumped to my mind, too.)

For this reason, and for all the other very, very good reasons brought up by the others, I think you should thank him profusely, but decline his offer.

costumeczar Posted 30 Dec 2010 , 2:26pm
post #17 of 25

I read this to my husband, and his immediate comment was "He's hooking you in, baby." He said, from a male perspective, that if this guy has been hanging around for that long wanting more than friendship, that he's not interested in a bakery, he's looking to buy you so to speak. He also points out that business squabbles break up families, which it totally true. Don't kid yourself. If you take his money you'll be taking advantage of his hopes that he'll get more out of it than just a shop.

I'd suggest that you wait until he gets married to someone else, then talk to his wife about him giving you the money. The situation might be different and the motives a little clearer then.

indydebi Posted 30 Dec 2010 , 2:38pm
post #18 of 25

In addition to all of the excellent advice already listed, does he REALLY understand how much it takes to open a commercial kitchen? seriously, there are too many people who think "buy a stove and a refrigerator and you're set to go." And they think you can buy the stove at Sears. Seriously. I've met them. No kidding.

erinalicia Posted 4 Jan 2011 , 1:08pm
post #19 of 25

no way, no how would I ever take the man's money if I wanted him to continue to know that we were "just friends" with no possibility for more. That's just sending the wrong message and opening a can of worms you DON'T want to deal with down the road. It all sounds good on paper, but realistically, he wants more and nothing's going to change that.

I wouldn't even consider a loan from him to start the business, but that's safer than what you're talking about. Once you start mixing money with friends and even family it gets ugly quick.

Just my 2 cents....

Bluehue Posted 4 Jan 2011 , 2:12pm
post #20 of 25
Quote:
Originally Posted by TheBlonde

You all have very valid points. I know this may sound nieve but nothing could ruin this friendship...He has been such a great friend to me for the past 15 years. And yes, I know he wants more than friendship but we have discussed this MANY times and he knows we are to remain just really close friends.

The bottom line is that he has A LOT of money and likes to spend it icon_smile.gif. He lives about 13 hours away. He told me that it would be my store and that I would have full control over everything. He would just share in the profit if there was one.

It wouldn't be YOUR store - it would be his.
They wouldn't be YOUR profits - they would be his.
And at the end of the day - you would be working for him.


I love the old saying
Why is common sense not so common

Nothing comes free - everything has a price - and there are conditons on every thing we do in life.
I guess all that is left for you to decide is - whats your price?
Sounds harsh - but its the truth



Bluehue.


This is nothing that needs to be done immediately. I have as much time as I want...years even. If I decided to go through with this it would still be years before I got it up and running. Like I said, I love my job. It's nice to have this as an option though...


indydebi Posted 4 Jan 2011 , 2:19pm
post #21 of 25

I dont' really believe in the "if it's too good to be true ....." type of thinking. I thought my hubby was too good to be true. but I married him and as much as he ticks me off sometimes, I think I'll keep him another 20+ years. I had a job that took me to vegas about 6 times a year. wow, that job was too good to be true, but it WAS true and I had a great ride!! We all find those deals now and then ..... our free dog on craigslist who is so well trained and housebroken that we dont' even know he's around. Wow, too good to be true! A car we found that was $3000 below retail and it runs great! Wow, too good to be true but we're still driving it!

too good to be true situations that work out well happen all the time.

I dont' know ..... I just don't want to be the kind of person who is handed a wonderful opportunity or gift and then sit around LOOKING for the negative part of it. Because when we say with doubt that "its too good to be true", we ARE looking for the negative instead of celebrating the positive.

But .....

I'm not buying the idea that some guy is going to hand you $50,000 to open a commercial kitchen and then sit back and say "eh! if I make some profit or not .... either way is ok with me" and that's ALL he's going to say. Dont' buy it for a second. So I am clicking the "Like" button on Bluehue's comments.

artscallion Posted 4 Jan 2011 , 2:40pm
post #22 of 25
Quote:
Originally Posted by costumeczar

I read this to my husband, and his immediate comment was "He's hooking you in, baby."




In my humble opinion, if she took this opportunity, knowing what she knows about his feelings for her, she'd be just as guilty of leading him down the garden path as he is.

costumeczar Posted 4 Jan 2011 , 3:10pm
post #23 of 25
Quote:
Originally Posted by artscallion

Quote:
Originally Posted by costumeczar

I read this to my husband, and his immediate comment was "He's hooking you in, baby."



In my humble opinion, if she took this opportunity, knowing what she knows about his feelings for her, she'd be just as guilty of leading him down the garden path as he is.




Absolutely! The whole situation just isn't good.

adonisthegreek1 Posted 4 Jan 2011 , 3:42pm
post #24 of 25

Since you are a single mom, keep your full time job that has much needed medical benefits, and possibly a company matching pension plan.

Don't mean to offend you, but you are very naive when you say that you've been friends for 15 years and nothing can end your friendship. I've had a friend for 20 years who wanted more than friendship. He knew that I only wanted friendship, but he would do absolutely anything for me. Nothing strained our relationship more than my dating choices.

If you become involved in a serious relationship: serious strain. If he marries someone else, there is no way this his wife would be supportive of your relationship.

-K8memphis Posted 4 Jan 2011 , 3:47pm
post #25 of 25

He might live 13 hours away now but for the green light on a very large investment he might move too!

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