Starting New Business With Others I need help in making my decision

[odomike 0]

Like everyone in here does, I design websites. There was this man whom I met and who wanted a website designed for his Non Governmental Organization and another website designed for a Tourism company he wanna start off with some other people. After looking at the mightiness of the job, I told him that he would be paying the sum of N550,000 ($4,230 approx). He said that he doesnt have that kinda money at the moment, but he also made me a proposal which is:

 

Design the website and get paid.... or

Design the website and dont get paid but you will get a share in the tourism company (between 15-20% share he said).

 

I have tried to evaluate the two options. The first one allows me to immediately have access to my money and that means that I can do about anything I wanna do with te money as soon as I can lay my hands on it.

 

The 2nd option though has a promising fuuture if you understand my line of arguement. It means that I will become one of the board members of the company and I will have a huge say in the company since, Like he said, I will be the Director for Information Technology.

 

My friends have offered their own advice, telling me taht I should understand the fact that I could get cheated in the long run and that I should also understand the fact that I am dealing with people who are much much older than I am (Old enough to be my dad) and that I have to be very careful about that. I have tried to make them understand too that cheating me means crashing their website which I believe they are very unwilling to do considering the fact that this is gonna be more of an online company that wouldnt wanna do anything to jeopardize their online presence.

 

I wanna know you guys' opinions of this and your advices too. This is one thing I really need now so I wouldnt take a wrong decision I would regret later in life.

[Plenoptic 0]

If this tourism company is already established, have him give you a look at their financial records and see if they are known to be doing well and then sort of plunk out for something. Or if it's new, ask him about what he has done in the past and if this isn't his first business he is starting ask about the old ones and what happened to them and try to get as much physical proof as possible instead of taking his word. If you create a signed contract with a witness explaining that you are the Director of Information Technology and receive 15% of income or stock or whatever then you shouldn't have a problem unless the company goes bankrupt. Another thing would be they could fire you as Director of Information Technology, and find another site for cheaper as you already had started a base for them.Of course I have no experience in this whatsoever so that's just some 16 year old opinion. To tell you the truth I probably would take the money when he got it and tell him that I am not going to take the risk that my time goes to waste if the company goes down. If it is a long established company though I would in fact do it after I look into their background and see that they have been at least somewhat stable over the years.

[Soby 0]

Like you mentioned that there are two choices for you. Well first you didn't mention properly whether they depend solely on the website for their tourism and other matters of revenue generation. Are they an established company or are they newly founded.Another thing that you may think as a fail safe plan is, if they decide to cheat you for your work and money, you can shut off their website and stuff. What do you think they are gonna let you go off so easily. As you mention these people are old enough to be your dads, they will have ways out of this.If the conditions are right, it is a good investment pertaining to the fact that you may generate enough money to overcome what you are charging them for the designing.One is for sure is that you kind of have already made the decision which reflects from your posts. I can only tell you that take this step after full consideration. If I would've been in your place, I would've checked if the amount for making the website, if i lose it will not affect me as much, I would've taken the gamble of joining their business. Mark that I used the word 'gamble' coz thats what i think this is.Otherwise I would've taken them for what they're worth and taken my money and moved off.

[odomike 0]

Like you mentioned that there are two choices for you. Well first you didn't mention properly whether they depend solely on the website for their tourism and other matters of revenue generation. Are they an established company or are they newly founded.Another thing that you may think as a fail safe plan is, if they decide to cheat you for your work and money, you can shut off their website and stuff. What do you think they are gonna let you go off so easily. As you mention these people are old enough to be your dads, they will have ways out of this.
If the conditions are right, it is a good investment pertaining to the fact that you may generate enough money to overcome what you are charging them for the designing.
One is for sure is that you kind of have already made the decision which reflects from your posts. I can only tell you that take this step after full consideration. If I would've been in your place, I would've checked if the amount for making the website, if i lose it will not affect me as much, I would've taken the gamble of joining their business. Mark that I used the word 'gamble' coz thats what i think this is.
Otherwise I would've taken them for what they're worth and taken my money and moved off.

YEa I undestand the fact that it really is a gamble. And I also understand that these people are olf enought o be my dad and might wana hve their way. It is not more like I am just gonna be their Director for information tech, but they are depending on me for the existence of the company.

It is a company that, irrespctive of having a physical office and genuinely registered as a company, would be making most of its monay through online advertisements and getting people know about tourism in Africa and where the locations are and what to do to get their and probably providing you with a road map and stuffs like taht.

Yes, they will be depending on mwe ,cos they wont just want anything to happen to their website. One person amongst them suggested using a Content management system (CMS) software to get the website done, but I tols him that I am gonna code the site from the scratch. if i do it that way (I know its gonna be a very difficult task that I dont even know how long its gonna take me to finish the whole website of more than 200-300 pages) it would be very difficult for anyone to imitate my codes and layout and everything I put in there. On the other hand, if I decide to use the CMS software, anyone with enough computer knowhow should be able to make any necessary changes in what I have in there...which means that they can really do without my expertise which is one thing I really wanna prevent.

I dont think it would be that easy for them to let go of me as they understand very very well that they need an expert in the field and not just anyone out there.

[lusako 0]

I dont know how far have you gone in your decision for this matter, however, I beg to differ from your choice ( though in the end of the day you are the one to make the choice). You said that they wanna give you the position of Director of Information Technology, I dont understand as to why dont you think about becoming the Managing Director by starting up a similar company since you have the know how. I clearly understand how hard it is for some one to start his or her own company but this is an idea. whenever there is a will there is a way, after all you are a grown up person, take the challenge of setting up a similar company.
It from that ground I suggest that you get paid for the work and think of similar idea. Never compromise, some of the so called older people may con you arround and you will regret forever. It doesnt matter how many pages you will create, there will always be someone who can do a similar job and gess what it will be the time when the company start leaping profit.

You know for sure, in this life there are two key things that have been a source of fighting, war and indifference in human beings, these are MONEY and WOMEN/MEN, so if it is money take care.

If you wish to persue you ideas than find a good lawyer, and let him advice you the way forward, otherwise, it is tiresome to work for some one it is better and paying off to work for your own and get a rip of profit for yourself and future generation

Regards

YEa I undestand the fact that it really is a gamble. And I also understand that these people are olf enought o be my dad and might wana hve their way. It is not more like I am just gonna be their Director for information tech, but they are depending on me for the existence of the company.
It is a company that, irrespctive of having a physical office and genuinely registered as a company, would be making most of its monay through online advertisements and getting people know about tourism in Africa and where the locations are and what to do to get their and probably providing you with a road map and stuffs like taht.

Yes, they will be depending on mwe ,cos they wont just want anything to happen to their website. One person amongst them suggested using a Content management system (CMS) software to get the website done, but I tols him that I am gonna code the site from the scratch. if i do it that way (I know its gonna be a very difficult task that I dont even know how long its gonna take me to finish the whole website of more than 200-300 pages) it would be very difficult for anyone to imitate my codes and layout and everything I put in there. On the other hand, if I decide to use the CMS software, anyone with enough computer knowhow should be able to make any necessary changes in what I have in there...which means that they can really do without my expertise which is one thing I really wanna prevent.

I dont think it would be that easy for them to let go of me as they understand very very well that they need an expert in the field and not just anyone out there.

[odomike 0]

It is not like I am defending the whole thing. But the issue here is that I was made to understand that it aint like I am going to design the website for them, but that I am designing it for us. Meaning that I am included in the very day2day decisions concerning the company. Of course, we have to reach an agreement about the whole thing.Concerning what this man has achieved in his past, he is the president of a Non Governmental Organization that has really helped a lot of children in my country. He is more or less the not gaining type if you understand what I mean. Has been trying to give me taht impression that he will never try to cheat me.

[Soby 0]

Well what we all are trying to say is that you've gotta be really carefull among things like money and stuff. It has ways of turning the persons character in an instant. The point where you are telling us that the company man is making you see that it's not that you're doing the work for them but you're doing the work for a company you are going to be a part of. Not trying to question the persons intentions but bluntly saying thats the oldest line I have seen in trying to settle an agreement and get quality work.Apart from all this I would say that being the part of the company and to being a part of the revenue generated, the only safe way for you is to get everything written down. Like an agreement that can hold up in court, 'Stamped Paper' is what we call here. Once the agreement is in place, even if they decide to con you, of which I have my doubts, since this person works for a Non Governmental Organinzation and for the welfare of people, you will have everything on hand to get back at these guys.I say, get the papers right and take the gamble. It's only a couple of thousand dollars, that you can get from any other projects that you will do but if this thing works out, it will be an alternate stream for revenue for you that has the chances of prospering.Once again I will say, get the papers right, and code the website so others will have a difficult job of using it. Don't use CMS like you said above.Hope this thing works out for you. I wish you best in this endeavour of yours. Best of Luck there mate.

Edited September 14, 2007 by Soby (see edit history)

[crazyfray 0]

First off, I would check whether this position confers limited liability - that is, if the company goes under, do you have to remortage the house in an attempt to pay the bills? Limited liability protects the assets of the investor (which is, in effect, what you are) from being seizable if the company hits a losing streak it cannot afford to repay (I may be off in terms of the specifics, but the concept is accurate - if liability is unlimited, as with a small business, you make sure you don't take out loans and then go under...).

 

You should be protected, from the description you have given, but laws vary country to country on this. Also, bear in mind that if this is a non-profit organisation, are you going to get any dividends on your 'investment' that has earned you your slice of the pie? Is it on revenue? We would assume so, but you know what assumption makes...

 

 

Apart from all this I would say that being the part of the company and to being a part of the revenue generated, the only safe way for you is to get everything written down. *snip*

I say, get the papers right and take the gamble.

I agree wholeheartedly. To be cliché, verbal contracts aren't worth the paper they're written on (unless you can prove 'em).

 

 

This is one thing I really need now so I wouldnt take a wrong decision I would regret later in life.

To go back to this, you stand to regret more from losing out on a share of a company (regardless of the current profit-loss situation) than from choosing to be paid, for the reasons I've outlined above...providing that you are not liable for any loss, and that the position gained does not have additional requirements above maintenance (for example, it's a good deal for them if they are completely non-profit and you are then tied in to maintaining content and updated the site frequently).

 

Basically, before saying yes, get proper (and by that I mean real world, non-forum ) legal advice - if you're from the UK, speak to the Citizen's Advice Bureau. If the deal checks out, the worst you have to lose is the time taken to make the site.

 

 

I have tried to make them understand too that cheating me means crashing their website

As a side note, I would be cautious about this approach...taking this kind of tack puts you on the same level as those trying to cheat you, if it comes to that. There's a world of difference between not maintaining their website if they do not live up to their side of the bargain, and intentionally causing harm. A world of difference with a lot more 0s on the settlement sum, I would guess. I'm sure you aren't suggesting this (I'm sure you mean that they won't know what they need to do to maintain the website if they lose you), but it's worth clarifying this.

 

Good luck, I hope that it checks out and you profit!

 

NB: Please note that when I replied to this topic, I selected reply to several points, but only was able to auto-quote Soby's. I have added the quote details manually, so let me know if you feel I have messed it up

 

EDIT: I notice that you are from Nigeria in your posting profile...not sure how the legal aspects would work with that. Still, same point - proper legal advice needed.

Edited November 14, 2007 by crazyfray (see edit history)

[OneMinute 0]

This seems to be an extremely tricky question :rolleyes:Err well, sometimes, it'd be better to change the problem if you are unable to solve this problem. This means you have had always had the opportunity to step down from this offer. And, afterall, it's just an offer for a design template? You can always get on and do another project. By rights, if he violated the contract, you should be able to get back the original skin and sell it off at a little bit lower price. This will only make you suffer minimal loss.Just my 2cents worth.

[anwiii 17]

anyone who creates web pages for profit should be open to any ideas to get paid. when you do a job and they promise profit sharing, what they are actually offering is an investment opportunity but instead of you giving them money, you are giving them your time. not bad if you think they will succeed. and if they are counting on their webpages to be the main selling point and where that will be their main or only source of income from that business, then you should also know how to drive traffic there and read up on seo to get them on the first or second pages of the search engines for specific keywords. i like the partnership idea because it will push yourself more in doing the best you can since the sales will be relying on how well you did your job in some ways.just make sure that you have a contract that states exactly what share your percentage is and when you get paid. i am assuming in this case, it's a new company with very little to no sales. that's why they are offering such a big % of the profits.i would do it! if it fails, you gain experience and more to add to your portfolio. it wouldn't be a total loss and heck, you may be able to sell the design to another travel co. make sure though that you protect your source as something that's copyrighted and put a clause in the contract that if the use of the source code is only good for a year or so(or another specified period of time) unless the company is making at least $10,000 in profits per year. if in the first year they accomplish this, then no problem....but if not, make sure they have no rights to the codeotherwise, it's too easy to steal. if i wanted to take advantage of you, it would be easy. i would have you build it, save the code, and forget about ever paying you. i would even keep it as mine and you would never be able to claim it as yours or add it to your portfolio. it would be hard for you to prove it's yours unless you paid money to copyright it first.

[crazyfray 0]

anwiii, if it's a new business, bear in mind that most businesses have a 3 year business plan of loss first year, break even second year and only gain profit in the third. Even tech companies struggle to earn profit without a market share!

[mikeyboy63 0]

If he can't afford to pay you (he can't) then his business is already in trouble. You actually have zero options. If you tell him you need the 4500 bucks he won't go for it, and if you want to be the IT Director of a company that has no working capital, you won't get paid either. Also, the website will be company property and sabotaging it will land you in jail. Move on, friend. This guy is a used car salesman.