First off..YOU need to be the Forefront of your Business...not the Techs.Secondly..I may have To Uh...well Kill the Chicken Chit Basstud!WHAT WOULD YOU DO???
What would you do if someone that you’ve employed for 14 years, that you have treated and paid exceptionally well, set you up and stole half+ of your local clientele (and then goes on unemployment)…..??
I sure this has happened with other carpet cleaning companies. I’m looking for opinions and advise in an effort to move forward, as I still have my goals for this business and I still employ other people. That’s the just of it…
HERE’S THE LONG OF IT;
Prior to 2000 my business was 95% janitorial service that I had started entirely from scratch in 1987.
I was handling and building carpet cleaning portion of my business by myself while employing 4-6 in my janitorial business. Starting around 2002 upon seeing the profit margin and the happy customers, I decided to grow the carpet cleaning and put a tech in a truck. Enter Jake. Jake started working for me in 2000 doing the janitorial work. During 2002-2003 I gradually phased Jake from night time janitor to a fulltime daytime carpet cleaning tech. From 2003-2005 I was pulling about $1200 of my janitorial profit a month and investing that into my residential carpet cleaning, with Jake as my lead tech. Things went pretty well. We grew from $30000 to $90000 two years. I had invested a lot of time and training into Jake. By 2005 I had a lot of trust and confidence in him. So much so, that I Gave him %5 share of the entire company starting in 2006. (My biggest mistake). This came with added responsibility and the title of operation manager. Really he just ended up being a high paid carpet tech, a good one I would add.
By mid 2007 things began to become frustrating for me, as Jake was not fully honoring his additional responsibilities. We had 3-4 sit downs that year, always ending with the things I wanted to hear, you know the typical smooth over. I began to become unmotivated to grow the business, I also became too comfortable. After all things were running pretty smoothly, just not progressing like it should.
At times I would offer him another 5% of the company, this time at the price… $5000. By 2008, in my mind, that was off the table. That is, until I had had a personal, sudden tragedy in my life. So by the middle of 08 I sold him that additional 5%. Because I needed him in place, as I needed to step back. This didn’t come with any more responsibility for him just a chance to reiterate his position.
Growth was stagnant from then on. There is plenty of blame to go around. The economy, Jake had totally detached himself from the janitorial portion and his contractual responsibilities, all while he was still receiving his share of the profit. This led to much resentment on my part. But, he was still a good tech and I wasn’t ready to go full time in a truck and train a new tech. Ultimately though, I have to take the blame for the stagnant growth. After all I am the captain of the ship.
THINGS BEGAN TO UNRAVEL:
By late 2010 the economy hit the janitorial side pretty bad. I had pushed him to honor his contract with regards to the janitorial service. To a small degree he did so, begrudgingly. ..It was apparent, he wanted to just be a carpet cleaning tech. Jake didn’t want any of the peripheral responsibilities, However, he defiantly expected his compensation package. ( 32% commission on carpet jobs + $150 weekly salary + paid in full medical insurance + a 10% share of the net profit. I on the other hand only received 90% of the net profit). In retrospect, I feel like fool as I’m writing this. But he was a good tech and well liked. Resentments built up. With both sides. Not knowing what to do. I had initiated a few sit downs. Those felt good for only about a week. In march 2011, things came to a head. I had decided to restructure his contract and compensation. This new contract would completely separate the Janitorial and carpet cleaning portions of the business. Giving him 14% of the carpet cleaning portion and with me retaining all of the janitorial portion. His peripheral responsibilities would be totally related to the carpet cleaning portion only. I began to actually, finally make some money off the carpet cleaning. Though, he never did honor his peripheral responsibilities, but it was something I could live with. At least for a while.
NOW THE UGLY END:
He would complain about making less money
By mid 2012, I met with him to explained that in 3 years I’d be 50 and I would probably want sell my share(86% ) of the carpet cleaning in the next 2-5 years. I reminded him that he had first right of refusal and that he was first in line. Apparently this was huge mistake, as his attitude and actions changed from that point on. In retrospect, This is when he began in earnest to lay the foundation to poach as much as he could (as apposed to purchasing my interest.. Est. value $65000, without equipment. His actions considerably devalued the business as whole. Over the years, I went well above and beyond most employers for this guy. He broke his collarbone, I held his job for him, CPS took his kids, I gave him any time needed for numerous court appearances, his personal life was an ongoing train wreck. In March 2013, his wife had left him… again, so feeling sorry for him I maintained the status quo. That same month he came down with testicular cancer. He had it removed, was treated, his prognosis is extremely good and is cancer free to this day. While he was out (5-6 weeks), I covered the load working 12-15 hours a day, Paid his insurances, and profit share due to him. I also did a fund raiser, through my clientele. I raised thousands $$ for him. Once He came back to work I had another one of those sit down meetings and I had insisted that he honor his contract. Just a few weeks later he had demonstrated his unwillingness to honor his obligation to the contract and then bluntly lied to me about it. I was Done! I notified him that we need to terminate our partnership and he agreed to a buy out of just under $7000 for his 14% share. Contingent to this buy out, he signed a contract( for the second time) that stated that the clientele list was exclusively mine and that he could never use this list to start his own company. Here is my biggest mistake. Two weeks later, I agreed to hire him back as an employee. He worked for me another 8 months until it was just obvious that he was lining things up to start his own company. At that point I offered to sell him all or part of clientele in an attempt to mitigate the financial damage he could do. He strung me along, having me believe this would be a very amicable parting for us both. When it became obvious that he was backing out and he had already done enough for me to terminate him, I stopped giving him jobs. Of course he got right on unemployment. I found out later, he had 2 weeks before already had equipment, already started his business and began to knock on the doors of customers. Now 18 months has passed and I would estimate that he has made off with at least ½ of my local, high end clientele.
What Would you do from here if you were in my shoes????