Some of you remember how it started. I decided to move forward anyway.
Here is what has been going on:
We were selling product and we were doing okay. We decided early on that we would not take any money/profits out until we reached a certain point. This was my idea. I thought everyone wanted to do this though. We all agreed it was the best way to build. How else can you grow a business? Every time we make a dollar, are we going to take out 50 cents? My view was reinvest every dollar back into the business for more product and business expenses. We didn’t put enough money in to be able to now take money out and still be able to reinvest a meaningful amount. You know? It’s like starting a little business with $500 and then taking out $500 when you get to a $1000. What’s the point? I was in this for the long haul.
About 3 months in my friend wanted to pull out her share of the profits. Huh? Okay, so if she did that, then we all had to pull profits? What would we use to buy more product? I thought this was a terrible idea. She said, she would reinvest half of her take to buy more product and keep the other half. Again, if we all did this, there wouldn’t be much left. Let’s call my friend Ann. We will call my other partner Pam.
Ann said she had always sold the products in her shop and that was her side money. Now, since we were are doing it together and not taking any money out, she no longer had that as an income stream. She felt like she was getting nothing. HUH? I was lost. She knew all the money was going right back in. I did understand where she was coming from though. When you are used to bringing in a a certain about of money and it slows up — it isn’t cool. But we were building something bigger. This was about a brand and a company — not side bread. I was beginning to think she and I were on different pages. I was thinking long-term and she was thinking right this second. It is okay to think differently, but that can be a big issue in a partnership.
I voiced my concern about taking any money out yet. She still said she needed something for motivation. I guess. But, isn’t having a successful business motivation? I said we shouldn’t all pull out profits at the same time. We can do it one at a time, so there is always money in the pot. She could go first, since it was her idea. She could take out $1000.00, once we sold the new inventory and/or once reached a certain number. We would take our cut afterwards. All of this was depending on how well we did of course.
Let me get back to how this turned out.
I was the one doing inventory and the books. I would give them an updated inventory sheet every time we had new products. I was figuring out the best way to keep up with everything. It was hardish. They were buying things and not giving me the receipts. How can I keep track of what we are spending? Product was also being used and not accounted for too.
Let me get back to how this turned out too.
We used a mobile card reader for credit cards. There were so many issues with credit cards! The girl (Ann’s Front Desk Person) who we were paying to take the sales etc, wasn’t swiping them to our card reader for various reasons. She was using the Square card reader on her phone. When she did that, it worked out great. The money would go to our account and there was a record of the sale. We didn’t want her to feel obligated to use her phone, even though her data plan was unlimited. Plus, when she was out, no one else would swipe it on their phone, they would swipe it on the main card machine in the shop. That meant, I was constantly trying to keep track of the money Ann had to give back, because it went into her account. We bought 3 different tablets and they weren’t working with Square. FYI, if you plan on using Square as a mobile card reader, make sure it’s compatible with your device. I also have the PayPal Card reader, but Paypal take like 3 days to deposit your money into your account, once you put in the request. I don’t like that about Paypal in general. With Square, your money is automatically deposited into your bank account daily. I finally settled on the Samsung Galaxy and it worked well. I tested it before even bringing it to the shop. I assumed all tablets would work with Square, but they do not. Well, Ann tells me the Galaxy isn’t working either. Now, I know I tested this thing and I had zero issues. What this all means, is a lot of credit card sales were going to Ann’s account. Ann doesn’t keep track, so we have to tell her what she owes. It was a pain in the ass; I know this led to miscalculations. We have no access to that machine. I go to the shop and try to figure out what is wrong with the tablet. The problem? Ann didn’t know the password to her router or which router was hers from the list. She was signing on to a free wifi and that had a limit on the amount of devices. She was paying an internet bill, she should always have access. She shouldn’t be signing on to her free wifi. That is for when you are away from your home/business. I figure all of the tablets may have worked and they just couldn’t connect them to the router.
Let me get back to you on how this turned out as well.
I hadn’t done inventory since our last big order and I figured we had A LOT of product still on the shelf. Ann was telling me we should be ordering more product every 2 weeks consistently, so we would always be in stock. That sounds like a great idea. But, based on the initial inventory and the money in the bank, we should have more than enough in stock. I don’t want to overstock and get stuck with anything. When I did inventory — we were short $2200 in cash! I guess that is why it looked like we needed to reorder to Ann; the shelves were probably starting to look empty. In addition to the $2200, there was $1000 that was swiped to Ann’s credit card machine, her employee had 4 items that she was paying for in payments (never mentioned to us) and 4 items were damaged. Okay, I knew NONE of this at all. I am pretty sure there were more too. We were short over $4000 in total. The $2200 that was received in cash — we NEVER received it.
Ann said she was going to review her video cameras with her husband to see what happened to the money. The problem? Neither of them knew how to work their system. How long would that take? Even if they figure it out, what is going to happen next? I just wanted to know if we were going to take the “L” in this situation. An “L” is a loss. That’s all I really wanted to know. Personally I kind of felt Ann should have put the money up and dealt with her staff afterwards. We are putting the trust she has into her staff. Once she figured out what happened to the money, is she going to fire or arrest her staff? No. Are they going to repay it? She can recoup the money from their pay, but how long would that take? Is that money going to make it back to the pot? It was just too many variables for me. Ann said she felt it was OUR fault money was missing. Yes, you read that right. We were to blame because money was missing from her shop. We should have done inventory sooner. Yes, we should/could have done the inventory. Pam should have went to the shop more often to pick up the cash. She wasn’t doing it, which was her job, so I would stop buy and pick up cash to deposit. When Ann left the shop everyday, she would take all of the money out of the register and leave our money in the money bag. Yep, didn’t bother to take that with her too.