Thursday, October 28, 2004
It was worth a lunch to Manager to find out that possibly this joint venture is not what she's looking for.
Not that information was misrepresented to us, because the person who presented it to us was hopeful it would benefit everyone.
Realistically speaking, this business is going to be set up as a business incubator, which requires different forms of investment and commitment than when we believed it would be a private venture. That's understandable, because they are different entities.
Manager would be expected to raise a portion of the needed capitol instead of being hired as a consultant. Since we were unable to raise $170,000.00 to open the Cracked Cauldron at this time (we're still working on it, never fear), I seriously doubt we'd be able to raise that plus what would be needed for a venture in which we have no ownership.
OK, here were the expectations set out at the lunch:
Manager would be able to keep the name of the Cracked Cauldron. Of course.I know this is still early stages and there's room for lots more negotiation, still, it looks like an unworkable deal for Manager.
Manager would be responsible for providing her share of the opening capitol in addition to purchasing all the equipment she would need to run the coffeebar and dessert kitchen and the furniture for her area. That's daunting, as we haven't been able to raise the funds to buy the equipment for the Cracked Cauldron, so raising additional funds is troublesome. She's worried that since the area she would be assigned would be the upstairs section where the indie film producers would pitch their films to investors, that would mean a much higher quality furniture than in our original plans.
From what she understands, Manager would not be allowed to hire or fire her own employees in her coffeebar portion of the business, but must accept whatever employees are hired by the general management, and general management could fire any of her employees at any time - including her.
She says she would be expected to hand over 30% of her income to the investment group (I'm not sure if that's gross or net income), plus pay her portion of the rent and utilities, as well as pay employees and purchase ingredients and such.
Although Manager may ask to change some of these conditions and see if she can make it workable for herself; from what she said last night, she's convinced at this time that it isn't what she can manage to do.
As this proposal was originally presented to her, it looked good. It looked like a win-win deal for everyone.
But as an incubator business, where she's expected to come up with money to invest, it's a no-go for us.
So we're back to where we were 3 days ago: pursuing the initial opening as a personal chef, then easing into catering, then acquiring the funding to open as planned.
It's frustratingly slow, but dependable and guaranteed to work.
The ads placed in the paper should be appearing soon; we've already secured 2 clients. They're one-shots for parties, but at least one of them may lead to more.
So, was the lunch worth it?
Well, yeah. This one came with more lessons in business and finance: never accept the first description as accurate, never make a commitment without getting all the facts, always make sure the deal is at least as good for you as it is for the others.
It's still early days. Who knows?
Things may not be as difficult as it looks right now.