How Do I Handle This Situation? (Long, Sorry)

Business By SugarNSpiceDiva Updated 16 Apr 2011 , 9:44am by SugarNSpiceDiva

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SugarNSpiceDiva Posted 16 Apr 2011 , 12:35am
post #1 of 14

Hi fellow CCers! icon_smile.gif

I have recently come across a difficult situation, and I'm not too sure how to handle it.

I am in the process of moving, and opening my business when I get there. My mom has shown a lot of interest in my cakes and really wants us to go into business together. I really like the idea of working with family, and a couple of my other family members have offered to help me in the kitchen when I need it.

I will, of course, be offering cakes, cupcakes and cake pops. My grandmother also offered to give me her yeast bread recipe which is really popular among our friends and family, so I think I'll be offering other "bakery items" as well.

My mom likes to do canning stuff, like jams, jellies, bar b que sauces and stuff like that, and she wants to incorporate those into the business as well (I don't know how the bar b que stuff will work in the business, but she says we will figure it out).

Well, I was talking to her today, because I already have some possibilities for shops and/or kitchens I am looking at. I asked her what "official part" she would like to play in the bakery. She very adamantly told me "Well I'm not going to be an employee for sure!" So, I figure, ok, she wants to be a partner.

But here is my problem. I'm not saying anything bad about my mom, but I kind of have a feeling that a majority, if not, all of the costs to start and run this business are going to fall on me, with the exception of her canning stuff. I will also be teaching her my recipes, as well as teaching her how to decorate and so forth.

The last thing I want to do is hurt my mom's feelings. But, I'm not sure if I like that arrangement while splitting all the profits and decisions down the middle. I hope that doesn't sound terrible. icon_sad.gif

Does anyone know how I should handle this situation? Some of the ideas I have ran through are: Make her a partner with limitations and a % of profits. Or I was also wondering if it would be difficult, if at all possible, for me to not make her partner, but that we each pay the other whatever amount since she will be helping me and vic versa.

I hope I haven't confused anybody. It's difficult not to, when I'm confused myself. Lol. I really want to make this work, but I'm just not sure how.

If anyone has any advice or suggestions, I and my sanity would be forever thankful. Lol.

13 replies
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bobwonderbuns Posted 16 Apr 2011 , 12:38am
post #2 of 14

Why don't you leave her out of it until the business is established then bring her in?

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bakencake Posted 16 Apr 2011 , 12:44am
post #3 of 14

good post. i would also like to know what other people's advice is

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CWR41 Posted 16 Apr 2011 , 12:57am
post #4 of 14

If she has nothing to offer (other than her products), I wouldn't bring her in... she can leave her products on consignment and pick up her money when they sell.

If she has a talent for baking and decorating (without you needing to take the time to train her), then she'd be an asset to your business and helpful to have around. She'd need to be paid as an employee, if she isn't contributing any money or taking any of the financial risks.

If she doesn't know how to bake or decorate, she could "intern" for free until she learns. If her skill level reaches professional quality, perhaps you could work out an agreement that she gets a commission or percentage of each cake that she produces less your ingredients and supplies. That would solve her wanting a percentage of your entire business if/when you do most of the work.

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cakedoff Posted 16 Apr 2011 , 1:03am
post #5 of 14

Maybe consider opening your business by yourself and if your Mom wants to sell her stuff there...keep it separate. I'm sorry to be the "bad guy" here, but I can't help but cringe at the "not an employee" comment. I'm sure your Mom is a very nice person, but in the end, you are going end up being the underling in decisions about YOUR shop. I give discounts to my family members (and there are ALOT of them), but in my very long and varied working experience, bringing in family members to work for/with you is almost never a good idea unless they are made to understand upfront that the buck starts and stops with you. Someones toes always yet stepped on or feelings get hurt that can create terrible rifts. Just calling it like I see it with the info given. Best of luck in your new venture!

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cutthecake Posted 16 Apr 2011 , 1:12am
post #6 of 14

I'll throw in the old saying, "Never do business with relatives."
Sometimes it works, but sometimes it doesn't. And it could get ugly.

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indydebi Posted 16 Apr 2011 , 1:13am
post #7 of 14

I'm going to suggest that her stance has nothing to do with business and its deeper than the surface, and I say that because bluntly, I went thru the same thing with my husband.

he "kinda" wanted to be part of the biz, but didn't want to do any of the research, set-up, hard work, baking, cooking, etc. He made similar comments of "I will NOT work FOR you .... I will work WITH you", which ticked me off that he thought it was demeaning for him to work FOR "the wife". And seriously .... that's what it was. It was an ego thing that he was not an employee, that he didnt' work FOR me (code for stomping his little foot and telling me, "you can't tell me what to do!" icon_lol.gif )

Difficult as it may be, you may have to have what they call a "come to jesus" conversation with mom and ask her, "so if you don't want to be an employee, what is it that you are expecting?" If she says anything close to "equal partner", then have the numbers ready so you can tell her how big her check needs to be to buy in as a full partner AND ask her what day works best for her to go see an attorney to draw up partnership papers.

On this issue, you are no longer parent and child (which seems to me is how she is viewing this ... she's the parent and she does NOT take orders from her child!). You are two adults heading into a business venture.

It's not personal ... its business.

BTW, you might also check with your health dept about "home" canned foods and if there are add'l requirements you have to adhere to if selling those types of things. She may just see your place as an opportunity for a "me too" type of thing. I also had something similar with hubby .....

Way back in the early days, hubby would talk about how he could "take" one corner of my shop and sell his woodworking stuff! I had to CONSTANTLY remind him that I was opening a kitchen, not a flea market! (big sigh!)

Family - ya gotta love 'em anyway, I guess! icon_lol.gif Moms are hard enough to deal with on daily personal things ..... add a business thing into the mix and you two better be the world's absolute best friends and even then, its going to be rocky!

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Kaytecake Posted 16 Apr 2011 , 1:25am
post #8 of 14

I would nip this in the bud. If your mother wants to be a full partner, you would need to go to an attorney to write up a business/partner agreement. You and your mom have to be clear as to how the responsibilities are laid out. Who is bringing in what % of money, skill, etc. There are also contingency agreements to set up, like what happens if one partner wants to leave or can't fulfill the original agreement. A business attorney would be able to draw a contract up. This way you have all these issues out in the open. Your mom may be surprised by the responsibilities that a "not employee" has to assume. She may also get angry about going through an attorney but business has to be taken seriously. Good luck to you. icon_smile.gif

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MBHazel Posted 16 Apr 2011 , 2:13am
post #9 of 14

Partners means equal commitment, responsibility, etc.

The biggest caution flag I see, is that you seem to be uncomfortable just talking about the possibilities with your Mom. It is your business, your commitment, your responsibility, etc. If you can't have the strong business discussion now, it will only get worse.

I learned the hard way about money and family/friends. It is near impossible for most of us to do what business requires when matters of the heart are involved.

I feel for the difficult position you are in. My guess is that in your gut, or in the bottom of your heart, you already know the way you will find peace with this decision. If not, I hope you find it soon.

Good luck.

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Motta Posted 16 Apr 2011 , 2:24am
post #10 of 14

As someone with a very caring but pushy mom, I would find this pretty hard too. On one hand you totally need her support and time and on the other hand, it comes at a huge emotional cost.

One thing - my mom would totally understand if I sat down at talked to her that this is MY business. She would want me to be happy and comfortable first especially when we're talking tens of thousands of dollars on the line. It's a hard talk to have but, like MBHazel said, it sounds like you know it has to be done. Give her the opportunity to sell there but that's it. And barbeque sounds totally unrelated to what you want to do! Good luck!!!

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BurnsyJ Posted 16 Apr 2011 , 2:37am
post #11 of 14

Never never never do business with family. Did I mention never? It hardly ever ends well.

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cakesdivine Posted 16 Apr 2011 , 3:01am
post #12 of 14

Been there done that with horrible results. My mom also wanted to go into business together. I had all the know how and business experience, plus much of the equipment. My grandfather put up the money that we needed. Mom refused to listen to me about how to run the business. She never advertised the way she should, she also refused to hire a food service provider and her constant trips to the local grocery store to keep food product was costly not only in the food inventory bottom line but the monthly gasoline bill that she insisted the business pay for was over $2500 a month. She refused to listen to reason and also ended up saying to me that she owned the business because it was her money. But it wasn't her money it was my grandfather's money. Her reasoning was since he was her father it was her inheretance and she was just getting it early.

Needless to say I will never do business with her ever again. I love my mom, but I learned my lesson. I lost equipment, and earned no money for almost a year because of her inept business practices.

DON'T DO IT! Mothers will always play the "I'm the mom" card with their children.

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scp1127 Posted 16 Apr 2011 , 6:33am
post #13 of 14

I am in business with my daughters, but I put them on with me as owners. I have extensive small business background and they have none. I also have all of the baking knowledge. I don't need to work, so this bakery will be part of their inheritance and a source of income for them now. We all understand that this is a gift to them and I am completely in charge. It was also all of my money that started it.

CWR41 has the best answer in my opinion. Just have her get her own inspections and licensing using your kitchen. If you actually rent her counter space, she may not have to have a wholesaling license. And Debi brought up a good point. Canning is considered manufacturing in my area... many more regulations and a separate license... logs of temps, times, ingredients, to name a few. The liability is so much greater than bakery products.

Partnerships are trying in the best situations. This is obviously not one of those situations. One chief.... If you are going to be in business, this is just one of many tough situations you will have to handle. I learned this lesson from my first business mentor and it was a valuable lesson to me. Over the years, I have had to say this many times and it is still true...

"This is not personal. Business is business."

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SugarNSpiceDiva Posted 16 Apr 2011 , 9:44am
post #14 of 14

Wow! First I want to say a huge THANK YOU to everyone's advice. My mom and I have been talking about doing this together for over a year now. The idea has only recently begun to become a reality, so until now, it was just idea. I don't think either of us thought about the negative aspects of going into business together..Until today of course, when I realized I might be running nearly an entire business myself, but giving the profits away for free.

Sorry it took me so long to respond. I was on the phone with my aunt, and reading her some of your comments. Of course, she agreed with everyone, and said she really enjoyed Ms. Debi's comments (I told her that's pretty common around here, lol). She suggested that I work this out with my mom immediately, before it gets too far. My mom and I are really close and my aunt was concerned that if we didn't get on the same page like NOW, we were going to have some problems.

So I called my mom, and we stayed on the phone for a while, trying to figure out something that will allow us to do this together without running into all of these problems that could potentially ruin our relationship.

Maybe it's "little kid-ish" but I am actually really excited that my mom wants to be involved in my business. And I want her to feel important in it, because she is. During our talk, she told me that she wasn't really worried about selling her canned goods to consumers right away. She thought it would be a better idea to work on one thing at a time. So the bakery would be first. She even suggested that, instead of selling the jellies and stuff to customers, that we make them to use in the cakes, so if someone wants strawberry preserves for filling, then we can offer them some of our very own preserves. I think that sounds really cool, using them as a flavor of filling exclusively for our kitchen.

To the PP who said that I need to be comfortable with these kinds of conversations with my mom (Sorry, computer is crashed, I'm doing internet stuff on my Wii, and can't see your name, lol), you have a point. So, I explained to my mom that we really needed to have this conversation, because it was important to me that we work it out before it gets ugly.

I asked her exactly what Ms. Debi said, and explained to her that, as partners, we would have to share the financial burden, the workload, and would have to discuss things that probably wouldn't be comfortable for the both of us. I explained to her that we would need to find an attorney to draw up a contract to help us decide what we would do in the event one of us failed to fulfill our responsibilities. I explained that we would be equally responsible for all the bills, equipment, ingredients and taxes associated with being partners.

Then, I gave her other options. If she was to be employed under the business, we would need to register for her to receive wages. Then at the end of the year, instead of paying taxes, she would be able to get a refund.

So after talking about it for a while, and working some numbers, here is what we worked out:

I will be the sole business owner, and she will be employed as the "business manager" (If there's a better title, please let me know, lol). Even though I would have the final say so in all decisions made for the company, I don't have a problem discussing them with her first, and getting her ideas and opinions. So, in a sense, we will still be "partners" per se, but I will still have the final say on my company. After all, the bakery is my dream, and the cannery is hers. We also talked about, after the bakery is established, she could apply for her own business license and make her canning business separately. Home based foods aren't allowed in Texas, so she would use my kitchen and give me a part of the profits.

Ok, I'm sure this is really long already. We also discussed some calculations on how it would work. Of course, this isn't set in stone, but I think we have at least a good start.

Ex. $100 Cake
-20 Cost
=80 Profit
-40 50% for business
From there, the rest of the profits would then be split in half. So that would mean that we each made 25% of the profits after bills, and the money that will be put back into the business.

What do yall think? I know this all may seem a little oversimplified, but the jist of it is that the company belongs to me and me only. I think that 25% commission on each cake for her is fair and reasonable. This, of course, is providing we both work on an order together.

Does this sound like a good solution?

Thank you all again. I am so thankful for all of yall's help. It does seem to be a conflict between doing business, and trying to keep your mom happy. Lol.

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