Monday, November 12, 2012

Business 101: The Nitty Gritty - Part III (The Final Part)

The beginning has been discussed, and how exciting the offer and proposal were... and I'm sure you can imagine all of the thoughts (and maybe even some dreams) that were going around in my head.  But in all truth I am a very realistic person, and there were some things that just seemed "too good to be true" to me from the beginning wih this ordeal.  I would even voice that to the partners in the business.  They would just smile or even laugh at that, and tell me that I worried too much!  And then say something like "now when are you going to start working?"  Ok.... so now let's move on to the nitty gritty of what ended up happening... and maybe how my doubts were really not so ridiculous afterall.  Like I've said several times, I have been extremely blessed through this experience to have so many friends in different parts of the business and legal world, and I received a lot of great advice and guidance throughout the journey.  So let's move on with the story....

My trip to Italy really changed my perspective on the studio partnership deal in many ways.  There really was a lot of discussion, an outpouring of support, a multitude of warnings given... and I came back seeing things from a different angle.  This was a great advantage for me, because as I've said before: I am not a business person by nature at all.  While I'm very organized, it's something I force on myself because I actually am much more of an artist (yep, I'll admit, I get quite lost in my own little world when I am busy doing my thing!)  I don't operate naturally on a timetable, or with lists and schedules... therefore I have to make myself do those things to stay afloat in the world of business.  When I re-entered the reality of this studio deal upon returning to the country, it was full-swing.  Within a couple of days after my return, and still dealing with some pretty major jet-lag, I was back to the challenges of seeing how this deal was going to work out.  The County Fair was underway, and there was a small display showing four samples of my work... this was along one edge of the massive display that they had at the Fair.  Also there was a sign with the announcement of the new Partnership... right there in the middle of my work.  While I was excited to see my work displayed there, I was disappointed that the only thing they had decided to print and display of mine was work that didn't really compete with his.  And that was maybe my first clue that there might be some things I hadn't seen before in this whole deal.  I'm not one to throw a fit or make an issue, so I let it go.  But my concern was that I wasn't coming in to the studio as competition, by not showing my work in full, I was being treated as competition. Rather I was coming in as a partner preparing to start taking the reigns of running the business as time went by.    And again - this was not something I had proposed or asked for from them... they had approached me.

Again the questions of when I was going to move in and when I was going to start work began again.  Now let me explain the "moving in" part of this.  In merging these businesses, I would obviously be moving out of my home-business into this much larger studio space.  And that was the most appealing part of any of this opportunity!  My kids are grown, so basically we converted most of our upstairs to my office and studio space.  My in-home studio, while not a huge space, is a very nice space and mostly used for photographing newborns and babies.  The need for a larger studio space (as well as a space outside of my home) has been something discussed for quite a while before this opportunity presented itself.  So moving my studio would still be a pretty major endeavor.  I have tons of props for newborn sessions (baskets, buggies, bowls, boxes, suitcases, chairs, pillows, etc), backdrops, floors, shelves for organizing all the hats, wraps, blankets, headbands, backdrops and on and on goes the list... and then there is lighting equipment and backdrop stands, reflectors, umbrellas, soft boxes, etc... oh my, the list just goes on and on!  And that is not even beginning to mention anything in my office space... that is simply just the studio area.  Whenever I'd think of moving all of this, I would remember the warnings I had been given: have everything in a written contract before you do anything!  So I would hold back.  When asked, I would respond: let's get those written contracts done first.  And I would either meet with being ignored, or a generic response of "yes, we do need to do that...we can go over that next week."  For me, I was going on with my own business as normal.  When clients got in touch wanting to know if they still scheduled an appointment with me as always or did they need to now call the studio, I would tell them that until I let them know otherwise to continue contacting me.  When a client was ready to place an order, I continued with my ordering process as normal.  For my business, nothing was changing at all until the time that contracts had been signed and the deal was officially done.  As far as I could see it, the deal was not a "done deal" until all paperwork was finalized.  And that is one thing that I did do correctly. 

Down to the Nitty-Gritty:

Finally I was contacted by one of the partners by text message that we would sit down and go over the contract the following afternoon.  This was following an email I had sent at the end of the previous week with a rough draft of a proposed contract/agreement - stating most of what they had proposed to me but leaving blanks for dates and exact numbers (such as salary and commission amounts in the beginning, exact dates of transfers, exact percentage of transfers, etc.) The following afternoon when we sat down together at the studio, I was given a copy of an email that I had actually sent weeks earlier with a very brief list of some of the issues that needed to be taken care of and included in any contract that was drawn up.  It was not a complete list by any means, and definitely didn't have things listed and stated as the proposed contract agreement last sent.  Yet it was a starting place, and to me it was at least a step in the right direction.

Then came the shock...the boom was lowered...the truth was finally revealed.

All of the warnings that I had received over the past 2-3 months of what to be careful of, what to look out for... they were all a reality.  Once the two partners started going over things, each point was different than what had been proposed at least three times at the beginning of all of this.  There was a part of me that felt confused, a part of me that wanted to scream, and quite honestly a part of me that wanted to cry.  Was it me or them that had lost their mind?  What they were proposing at this time for the details in a contract was ridiculous, and anyone with any sense would never sign such an agreement...yet here they were smiling at me and acting like this was all something that had been discussed before.  I had spent time with them, they had gotten to know me over these past months... and they were literally breaking every point they had proposed to me to get my interest.  Do you remember the initial proposal?  Let's compare with what they revealed in the end:

•A "substantial" salary that would basically break down to less than $10 an hour.  And from the beginning (literally, the first phone call) I had expressed my concern at not wanting to be expected to be somewhere every weekday, completely tied down and unable to maintain taking care of my other demands in life, with the response being that I would always have complete control over my schedule.  Well, now it was being stated that they would expect me to be working in the studio at least 4 days during the week (this was in addition to doing any photo sessions that I might schedule for evening or weekend appointments, or weekend weddings.)  Right there I felt like I was in the wrong place -- maybe they were confused that I was applying for a position, and not the photographer that THEY had approached about a partnership. Along with this salary, they would pay me a "substantial" commission (much more than they would someone else, they explained, because of my ability and experience) of 25% of my sales.

•After the first year I would receive 7.25% interest in the business.  (Less than half of what they had been proposing from the beginning.)  And each year thereafter another 7.25%... therefore in 14 years it would be my business.  It would be 7 years before I would have controlling interest, and once I did have 51% interest I would start paying rent or have a purchase option for the building.  My question was "well, if I only have 51% interest, I expect that I would only have to pay 51% rent?" And that was probably very rude to have even said out loud... but let's consider that I was in absolute shock over what I was hearing at this point!  Then it was very smoothly stated that the photographer felt it was only fair to make sure that I at least had the option of a buy-out clause... because, he explained, when I got to 51% interest in 7 years, he would be 65 and possibly not wanting or able to work and bring money into the business... so I probably wouldn't want him taking his share of interest from the business when he wasn't even working to bring money into the business and it would be best for me to just "buy him out" at that point.  To me this very clearly sounded very different from "no money will change hands" stated clearly over and over in the weeks and months already.  And also keep in mind that I would be bringing into this partnership my own equipment, which is all new and top-of-the-line and worth quite a bit of money.  My contribution into the business would carry a hefty value from the beginning.  And let's remember that as time goes by technology changes drastically.  The computers and photography equipment that we use now will virtually be a dinosaur in 5-7 years, much less 14 years.  And working for the business, I would be a major contributor to the money used to purchase equipment to replace and upgrade through the years.

•It was also discussed that each partner would have a clause that, in the case of their early-death, any interest that they held in the studio at that time would automatically be divided back between the remaining partners... that their family or estate could not come in and claim interest in the studio.  As shocked as I had already been through this conversation, I was even more shocked when one partner looked at me and stated "you don't need this money to support your household" -- so basically anything I would work years for was all in vain. 

•It was discussed about the business name, and the two partners carried out a conversation about how it really wouldn't work to have my business name added (even though this had been one of the main things discussed from the very beginning.)  There was a dialog between them about how "experts" in marketing had already approached them and pointed out that adding my business name at all would just confuse the market, and thus run away business.  And by this point I didn't even ask anymore questions.  I can only imagine the look on my face by this point.

and finally, the last thing......

•They said they would be thrilled for me to take over taking care of website and social networking, and felt that I did an incredible job with that for my own business already. (Yep -- that's the same as in the inital proposal!!!  Horray -- I hadn't completely lost my mind!)

To say that I sat through this shocked and amazed would be an understatement.  I had an array of feelings and emotions throughout all of this...but "completely shocked" would have to be the top one on the list.  Even when I left the studio to head home, it still hadn't all sunk in with me.  It was playing over and over in my head.  I felt frustrated, angry, confused, sad, overwhelmed... among so many other things.  I had written down what was said through this meeting, and when I got home I got my notes from the previous discussions and started to compare, and there was nothing pertinent that lined up at all.  Everything was different, and everything was much worse.  I would basically be bringing thousands of dollars worth of my own equipment into an established studio and then getting paid a small percentage of what I earned to work for someone else.  It was not sounding so good at all... and the words of many respected people along the way (and especially hours of conversations in Italy) were playing over and over in my mind.  I sent my husband a message to call me, and we went over the points of the meeting... after which he also pointed out and we agreed that I would be crazy to walk into such a deal.  The prospect that after 7 years of working hard, I would then be in my 50's taking out possibly an enormous business loan to "buy out" this photographer... something I had stated in our very first conversation that I had no interest in getting into, and still here I was months later with this before me.  It was very disheartening. 

Later that same day I wrote an email that was sent to both partners, and I pointed out the differences in their original proposal and the points they had given that day... and I told them that I was very concerned with the changes and would not proceed under those terms.  I also told them that I was willing to discuss getting the terms back to more agreeable terms, as in the initial proposal.  The following afternoon I received a very brief email stating "Please know how much we appreciate the time and effort you have put into this proposal; however, it appears that it is not in the best interest of either party to enter a partnership at this time."  Absolutely no explanation at all.  After all of their advertising and announcements of this new partnership...all of the was that simple.  Their intentions were not to honor what they had proposed to me in the beginning, but rather to somehow lure me in and have me somehow find myself stuck.  I wrote a follow up email that reiterated from the beginning the differences in their initial proposals (given at least 3 separate times, and in the presence of at least one witness) and what they put before me at that final meeting, and explained that such a partnership would not be to any advantage to me, but would rather bring me financial hardship and distress.  If there was any doubt of their lack of emotion or regret in their treatment or handling of this entire ordeal, it was clear by the way they never offered any apology or explanation. 

There has been a time of grieving since all of this.  Honestly, there have been many feelings and emotions through the entire journey.  I have felt panic and fear since the beginning, even though realizing that this could open up such an opportunity for me to reach more people with my photography - to offer more studio options to my clients (especially for my maternity sessions!), and that is something I have prayed for over and over again.  But my panic and fear came from the feelings of losing control... of someone else deciding who and what and when and how.  And as an artist that is not something I can or will freely give away.  There has also been a lot of disappointment and hurt.  I'm no more special than the next man or woman, but I sometimes want to believe that since I am an honest and open person in both business and my personal life that people will treat me in the same way... that they won't take advantage or hurt me.  And I learned again that this is just not the way it usually works in this world.  There are people out there who do not have regard for others... and are only looking out for themselves.  And that disappointments me.  It may not sound very professional or tough, but it broke my heart!  The feelings of anger have come from being manipulated and lied to... and even the fact that I had made purchases that were only made because I believed I was actually moving out of my home office and into another location - money spent that didn't need to be spent, and could have gone to something more useful and necessary. 

Always Find the Positives:

The thing I most cherish is the feelings of thankfulness that I have had by how this all worked out.  Even though I have been hurt and disappointed, I am so thankful for the people who cared and invested in me (and my business overall) and in this situation to help and guide me.  The advice I was given along the way was priceless, and it is probably due to much of that advice that I wasn't hurt even more... or that I didn't find myself stuck in a situation that was going to really bring a lot of struggles to my life I didn't plan on or see going in.

Advice from the lessons I've learned....

My advice to you if you ever find yourself in any kind of situation like this:

•GET EVERYTHING IN WRITING!  If someone comes to you with a proposal or offer, get it in writing from the very beginning.  If you notice that they are only telling you things, but never giving you anything in b&w - then consider walking away.  Maybe at least ask "Hey, I'd really like to proceed, but I'd like to see some of this in more concrete form so I understand completely what your intentions most clearly."  There is nothing wrong with asking for that - you have to protect yourself.  Also it gives the other party the opportunity to see what they are offering in writing and retract something if they find it's more than they are really wanting to give.

•Speak up if you have a question.  Do not ever be afraid to say "Something about this is not feeling right, so I need to get some clearer answers to my questions." If things are really as they are being presented, the other party will have no problem with explaining further - in fact, they will appreciate that you care enough to want all of the facts. 

•Do not start working with someone until you have everything finalized.  That means IN WRITING, LEGAL, SIGNED, SEALED & DELIVERED!!  I did not move in to the studio space - I never took anything over, holding out for contracts to be done.  BUT I did go over numerous times to look over things, work on their facebook, even assisted during a photo shoot.  And that was a mistake.  I didn't lose anything, but I did give up some of my time... but my time is very valuable, and to them it didn't mean anything.  Also, I got more invested emotionally in the idea of the partnership.  And if I had held out completely for contracts before putting myself into the business at all, some of that would have been spared.

•DO NOT BE AFRAID TO WALK AWAY.  There should never (seriously, do you understand that I really mean NEVER) be a time in our lives that we stay in something because we are afraid to be embarrassed or humiliated that something didn't work out.  Actually, it should be those who are taking advantage of someone else who should feel embarrassed and humiliated!  But if you see yourself in a situation that very clearly is not going to be the best thing or even bring you harm in some way - then find the door quickly.  Move on.  Learn lessons - and share those lessons with others so that they can learn too.  It's what life is all about!

•MOVE ON!!!  And that is what I have done.  My business is still intact and thriving, and I have learned valuable lessons.  My feelings may have been hurt, but it's not the first time and will most likely not be the last time.  But I am wiser, and I am probably even a bit kinder.  I will not let someone else's bad choices or bad behavior make me an angry person... but I will let it make me a smarter person.  And I am blessed with the BEST clients in the world.  Most of my clients probably have no idea any of this has been going on, so they have no idea how much it means when they tell me they absolutely love the work I do for them!  But I know - and that is what matters, and it is what makes me strive to be even better for all of my clients!

Thank you for giving me your time and for allowing me to share my story with you.  My hope in sharing is that you will learn something to help you in your own life and business and to help someone else avoid such a situation as I found myself.  The bottom line is always that we should live our lives with integrity, both personally and professionally.  We can't control other people, but we can learn to be smart in how we handle those tough situations.

Follow-up: As I've stated many times over, business is not a natural thing for me.  I possibly have no natural business sense at all!  I get personally involved in anything and everything I do... it's the only way I know to be.  Therefore my emotions and feelings are always involved.  This entire situation has been very difficult, and not at all because the "deal" didn't work out -- but because there were these two people with whom I shared a part of my life... I invested my time... I was "real" and transparent with them.  And they chose to betray me and hurt me.  Yesterday was the first time that I finally let myself have tears over all of this... and once it was during a conversation with my Mom, and another time a conversation with a dear friend.  This has truly hurt my heart -- that I didn't mean more to someone than for them to try to trick me and hurt me, and have no regard for having done either of those things to me.  My mother said the sweetest words to me, "Donna Kay, I am so proud of you!  You gave them all of you, shared exactly who you are with them, as you do with anyone in your life.  And they chose to be dishonest in return.  But YOU were smart - you didn't let someone take advantage of you.  You refused to be treated badly, and you walked away.  And I am so proud of you for being so smart, because many people would not have seen what was going on or would maybe have been afraid to walk away at that point."  So right now my feelings are more hurt than anything... but I hold my head up and am proud that I have gotten through this.  I am wiser and I am stronger.

Make sure you've read Parts I & II...

Disclaimer:  The purpose of these blogs is simply to share my experience, go over the warning signs that were there along the way and use my experience to keep anyone else from finding themselves in a situation that could end up hurting them.  I had very good advice along this journey, and I have walked away with just some hurt feelings and disappointment in how I was treated.  It could have ended a lot worse!

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