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      09-14-2019, 06:30 PM   #1
Our03z4
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Drives: 2008 BMW Z4 3.0si Coupe,
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What would YOU do? Business Question

4 years ago my wife acquired a client list that compliments her other company. The seller was a family member who collapsed the company through many poor mistakes. Shame too because it was to quite a nice size. No broker would touch it due to poor book keeping and contracts that were pre-paid.

The PO wanted $50k but we agreed to a continuous 25% of net net if PO worked for us on the online marketing for said 25%. This is something he was VERY good at. He also was going to work for us as an employee on the production side making $20 per hour not including the 25%. We also honored all of the pre paid agreements for the first year. Had an almost 100% renewal year upon year since.

Everything worked well at first, but then he started to take random bouts of time off, including spur of the moment, well knowing this screws schedules up. Always talks about doing the marketing but has yet to give us anything to use to date. He had no contact with us for the past 3 weeks, leaving us to handle everything, then tonight asks for the monthly 25%. She is very hesitant to pay it since he hasn't done anything. Our dilemma though is he did acquire most of the clients from his previous company.

We are on the fence about shutting down the company after this years contracts are complete, just isn't where it should be. Profit is 26% compared to 53% of our other company, about 20+% of accounts are consistently past due. Yes, yes, I know, don't do business with family...also don't have a contract. Also found out he has many court proceedings against him now due to business loans not being paid back. Not connected to us luckily.

So the question is:
Pay him for the rest of the year, take the high road? Shut down next year due to low margins and head aches? Say screw you and not pay?

Thanks for any advice!
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