What problems could I encounter setting up a rival business to the business I manage for someone else?

Question

I cannot see anything in my Contract of Employment that stops me doing this, the business will be Plant Hire

Answer 1

Back in the mid-80's I was managing the direct sale program for a professional laundry. For the most part I was repping industrial uniforms.

I continually looked at how much business I was writing versus what i was being paid. And these were accounts I was bringing in!

Ultimately I quit, and started my own repping business using my old accounts as income to get the business going. This worked very well for about a year-and-a-half. Then my previous employer got wind of what I was doing. They undercut my prices, and for the most part, drove me under.

Years later, while talking to a business broker, it was explained to me that if that is the chosen method of starting a business, it had better be solvent (meaning, 50% of income derived from new accouts) in a year, or it won't survive. And it won't survive for that very reason. Former employers do not take it lightly, that they were used only as a springboard toward starting a new business.

The key to all of this is what your customer base will be. If you are plan on taking some of your employer's customers with you, plan on being raided big time. To the extent that your previous employer will try to put you out of business. And you have to remember that he has more assets than you, and he probably could put you out of business, unless you can add new business very quickly.

I was working on a two-year plan, not a one-year plan, and didn't realize my customer base could be lost so quickly.

In effect, to remain solvent, whatever the volume is you take with you, you better be able to triple that volume in a year, or you will risk losing the business.

On the other hand, if you can slowly build the business with new accounts as you continue to manage your employer's business you will run into time constraints. You don't want to get fired before you are ready to make the jump!

Answer 2

This could have a good outcome or it may have a bad outcome. It really depends on how you plan to proceed. If your plan of action is one which steals your companys exisisting accounts away from the company that your currently working for there could be serious repurcussions. Example law suits etc. Now if you don't try and solicit the companys customers and get your own well that could be a different ball game all together. In my books its just bad business to take customers away from someone who has been giving you a paycheque every week.

Answer 3

You probabaly favor to imagine about those products some more suitable cos of direction it varies between what corporation that's, what your resources are, and the position your marketplace is. So an information superhighway corporation in ebay is low start up fee compared to assert procuring a save or procuring a franchise. attempt searching at information superhighway sites like nfea (corporation businesses) and shell livewire or princes believe - a lot sensible stuff there. some web pages provide help to view cobweb briefs which provide succint "education guide to being a xxx" which permits with what you desires/expenses and so on

Answer 4

If there are no contract restrictions, I said go for it. You might pissed off a few people but your business could go far.