We're in a client-service industry and most of our clients are very likely to come with us. I'll add that the clients we have (and will probably take) were found, developed, and managed by us while working for our employer and there are no contracts in place that make these relationships legally binding. My future partner believes after separating, the new company should provide our former employer a pretty significant commission on any work with these clients. And while I feel we need to do our best to soften the blow of our departure and do the right thing, this type of arrangement seems way too generous and potentially detrimental to a new business. I'll also add that my new partner has been with the company for a significantly longer period of time. Any thoughts on what would be the most responsible thing to do in this situation?
2007-02-02 22:18:37 · 6 answers · asked by Michigan75 2 in Business & Finance ➔ Small Business
Check with an attorney regarding compensation. Perhaps, in order to soften the blow to your current employer, you could take with you your clients over time instead of all of them right away. Explain to these clients that you aren't quite ready to give them the proper attention you feel they should have but that you will be in contact with them as soon as you are.
Congratulations and good luck in your new venture!
2007-02-02 22:31:18 · answer #1 · answered by Laurie K 5 · 1⤊ 0⤋
Your sentiments are admirable. It's really nice to know in the current cynical world of business there are still some genuinely good people out there. However, if you aren't legally obliged to pay any compensation then don't. You may still have some loyality to your current employer but you know what, if the chips were down they wouldn't think anything of dumping you.
The only advantage of paying some form of compensation is if you feel your two business with benefit from maintaining a good working relationship. In my experience it's advisable to work with your competitors rather than against them but that does depend on the industry.
Cash flow, or lack of it, is critical to any business but especially new ones so you don't want to be giving any away unless there is some long term financial advantage. I'm not suggesting having sound morals and doing the right thing isn't important, and it can be a financial advantage in itself because if people know they can really on you to "do the right thing" you will do more business. But you can't afford to let sentiment get in the way of sound business decisions and giving money away when you don't have to, on the face of it, doesn't seem that sound. If your partner is set on the idea of commissions insist that you put a finish date on it so say, 6 months or 12 months. You certainly don't want to be sharing the money with your ex employer for ever. A commission does have an advantage over a lump sum payment though in that you only pay if you actually earn. If you do come to that arrangement you also need to be very clear on which clients you are paying it on. If a client decides 2 weeks after you set up shop to change to you after all, will you pay comission on that? What would be the cut of point?
If you are going to be operating as a company rather than a partnership you could consider giving as compensation a small proportion of shares in the company.
I wish you every sucess in your new venture.
2007-02-02 22:38:18 · answer #2 · answered by gerrifriend 6 · 0⤊ 0⤋
Perhaps you should rethink your relationship with your new partner. Loyalty is a big part of developing your new company. If your potential partner feels a serious loyalty to your employer, perhaps he or she should remain in their employ.
As far as compensation to your former employer. If you have no legal obligation, it is entirely up to you what compensation, if any would be appropriate.
Ask yourself... How much would they compensate you were the situation reversed?
Keep in mind, once you embark on this venture, your former employer instantly becomes a competitor. Will they be compensating you for any of the clients you developed who choose to stay with them?
2007-02-03 00:37:20 · answer #3 · answered by thomy8s 4 · 0⤊ 0⤋
Normally, people don't compensate their former employer in this situation. This leads to hard feelings and sometimes a law suit but, that's business. If you take a customer list, written documents, address book or business tools, it is business theft, so be careful.
Sometimes, the customers you think will go with you don't like what you did and they stay with the old company for that reason.
2007-02-03 08:20:36 · answer #4 · answered by Anonymous · 0⤊ 0⤋
a huge definite in this one. might you desire the chinese language sticking their nostril in if we had a undertaking with Mexico? i don't believe the take over of Tibet by way of China after WW2, yet, at this factor, i've got confidence the matters there will be resolved right now. China would not desire this in the present day, with the Olympics coming up. And, right on Erlish, stable for you. very stable answer.
2016-12-13 07:46:45 · answer #5 · answered by motato 4 · 0⤊ 0⤋
You should not conpensate your current employer
2007-02-02 22:29:31 · answer #6 · answered by Khalid 1 · 0⤊ 1⤋