My Friend - Please Help

Paisley_3

Hi all. Sorry if this is in the wrong place, but it's a strange one. Please don't be put off, I could really do with some advice.

My friend (yes, it really is about a friend, and not me lol!) has spent the last 2 years trying to start a business. Now, normally, when someone tries to start a business, they get a loan, get an office, the usual. Not he. He's basically just written a website to recruit people. Why? Well his 'master plan' is to get a contract from a large company to write a website (or software, or game or whatever), break it down into chunks then give each chunk to an employee. At the end of the timescale he puts all the chunks together and sells the end product to the client. He takes a cut and pays each employee £50 per 5 hours they've worked.

Problems with this:
1. You can't take a website etc and break it into chunks and expect 30 different people to code it in the same way. Employees who haven't been taken on to do the first 10% of the job will have to wait unpaid until it is done, so they can do the 20% part. I pity the person who does the 90-100% bit!

2. Like I said, my friend didn't get a loan, he opened a business bank account and was given a 6 month lease on a shared working area in a business start up place - the business start up people don't give help with the business, they just give you a 6mth head start and then you have to pay for the premises or find your own.

3. He is seriously in debt. I know of at least 2 credit cards maxed out and at least one overdraft to it's limit. He has zero incoming per week. How does he live? His poor girlfriend, massively in debt herself, works in a pet food store 2 days a week and she pays his rent, bills and food.

It's getting embarrasing because (and without boasting), since myself and my boyfriend met our friend and his girlfriend some years ago we've gotten highly paid jobs in our chosen career and moved into a lovely luxury home. We're not that frugal because thankfully we don't need to be, all the time (though I refuse to pay non-sale prices for clothes and the pound shop is my first port of call for most things!!) But we do go out regularly for expensive meals as a treat for working so blooming hard. The tough part is when he says 'what are you up to on saturday?' and we go 'oh not much, just chilling out', he'll then invite himself over, drink our tea, sit on our sofa, eat our biscuits and generally use it as an escape from his crummy life. Worst of all he seems to come over a lot when our online shopping arrives- meaning we'll be making a huge dinner - and somehow he always manages to eat a good chunk of our food arrival. Now I am happy to have guests and we do entertain a lot, but he just sits there telling fibs (or more, exaggeration/wish) about 'the business' and we're bored and fed up. We know how much trouble he is really in. Also we cherish our Saturday off and having to entertain him when he's in full on bulls**t mode is not our idea of fun.

Worst is when we go for dinner. We'll walk around the area where we live (they live in a horrid area, we live in an affluent one, lots of expensive restaurants) and we'll pick out somewhere we consider cheap (ie, say £9 for all you can eat thai, that's not that expensive at all!) and he'll moan and point to some greasy cafe at £3 a head, which we'll refuse on the basis of the grease running down the windows and the rat traps outside, he'll sulk and we'll end up going for thai with him sulking and his gf whining about the cost and how little money she has. And yes we've suggested a night in, but this invariably ends up with them eating about 4 meals (I don't plan them, but you know, when you buy a pizza or some chicken kievs you know how many times that will feed you and your partner and you dont factor in extras).

Sorry for the essay - there's loads more, let me tell you! But...what do I do? I can't turn my back on him - he's been my mate for ages. He won't listen to me. But he's going to end up homeless or bankrupt or both. He won't get a full time job because he's so convinced this business will do well. I'm no Alan Sugar, but I can plainly see it's a disaster waiting to happen.

Again sorry for how long this is and if it's in the wrong place but I just don't know what to do.

elona

Until he has his "lightbulb moment" then there is nothing that you can do.

He is building castles in the air and furnishing them too!

Concentrating on how everything will be all right as "he will be rich" and all the problems will be over.

Bet he has told his girlfriend that it will all be worth it in the end while she worries herself sick.

The only thing you can do is be there when it all comes crashing down.

If you get fed up always feeding him could you answer the door in your coat and say "We were just going out to see relatives" or something similar.

Make meals something like beans on toast or a cheese omelette so it does not eat into your food plans saying you had a large meal earlier.

Bokken_2

recently in the States there was a charity web page constructed by a youth and the bits about a Million of them were sold off making the youth very rich quite quickly and lots of hits for the charity I suspect he may be trying to do something similar.
The question is of course if it was so easy and possible to do why aren't all small business/companies doing it?
Of course as long as he isn't listening the longer it will go on.
good luck

d11wtq

I'm a web developer by profession. You're right, he's got his head in the clouds. I've seen so many people talk BS about how successful they are going to be although I've never seen anyone throw so much money at it with so little certainty.

I'd definitely start eating cheap meals when he visits and stuff... just have cheese on toast and pretend you're saving for something even though by the sound of it you don't need to. Doing things like that will soon mean that the appeal of eating you "nice food" and stuff looses it appeal. Has he had much financial advice regarding his business plan? Not from friends, I mean from lawyers and bankers.

Paisley_3

He said to me, a few months ago, that the plan was given a resounding thumbs up by the new business start up team. Now, last month, he phoned me to ask for my help in writing a business plan so he could get a business bank acccount. If he'd actually been to the start up team, the only way they could evaluate his business model would be through reading his business plan, meaning I strongly doubt that he has sought external advice on the plan.

To clarify, it's nothing like the million dollar homepage (which was a brilliant, one off idea), it's about him approaching large companies and offering to write them a website/game/application/whatever, agreeing on a price (he plans to undercut all local web designers) and then splitting up the project between students at £50 per 5 hours. He then gets all the bits and puts them together like a jigsaw puzzle, presents the finished product to the client and gets paid, taking a chunk for himself.

Anyone with even a basic knowledge of web design knows this isn't possible, and is badly thought out.

And anyone with even a basic understanding of business knows that you need capital (he has none) and a good idea (which this isn't). He has around 40 people on board. The minimum work they can do is 5 hours each. If only 2 of them work at any one time he will need £100 for that 5 hours, ie £20 an hour, and will need, in order to afford this, to earn £25 an hour minimum (so he can live off the £5 an hour he'll retain for himself). I don't know anyone, myself and partner included, that earns this much outside of working Bank Holidays (and even then it's on a double time and a half basis, those with very generous employers!)

I agree that I should probably cook just a spud or something when him and the missus come over, but he's the type to stay all day (and I mean all night too). So I have to eat food I dislike and end up freezing the nice food I work hard to buy. And this is a guy who comes over, says 'put the kettle on' to me, and when he's sitting on the sofa watching our cable, and is passed a cup of tea, will say, 'pass us those biscuits' and eat half a packet!

What I really need is some business advice because his girlfriend, worried about money as she is, believes his head in the clouds stories and refers constantly to 'when his business pays up we can do x y and z'. I am concerned for him but I am no business consultant. Does anyone know of a free forum etc or does anyone here have any ideas?

highguyuk

I would recommend you point him in the direction of this forum.

And then point him in the direction of this thread.

And take it from there. lol.

Paisley_3

Funnily enough, I'm not going to do that. Guess I'll look for another forum - thanks to everyone else for their suggestions.

highguyuk

There isn't alot either of can say or do.

You need to be there for your friend obviously and help him through the tough patch. When people latch onto an idea they will follow it through because they believe it will succeed. Eventually, he will realise it isn't going to happen, and then you can be there to support him. At that point, we can help him through his financial problems, loans etc.

At the moment, he just needs to have his lightbulb moment and be brave enough to post on here himself.

All the best.

lynzpower

So does the GF not work then?

It seems to me there are 2 issues, the difference is in what you can actually DO about them

1. You are getting pi**ed off with him abusing your hospitality.
This you can do something about. Instead of the excuses, which seem like they are not gonna work, could you not be a bit more upfront, and say things like "oh we were going to spend some time alone together ( you adn your OH) " we wanted to spend the day alone " etc. You cant change where he suggests to eat, at the end of the day hes skint, and you have different lifestyles. You might think £9 is a bargain for food, but some people here are spending that a week on food for themselves- total!
Try and take a step back. If you cant be bothered with thier skint choices, you dont have to hang out with them, but you are choosing to do so, there definately seems like a clash of cultures so to speak.

2. the business In your opinion will fail.
In fairness from what youve told us, it may well do. You must have had a frank conversation about this with him? Saying im not being funny but it sounds rubbish as you dont have any income or similar? If you havent, do that. If you have, and he is proceeding with his business idea , then really, what can you do? You cant really do that much in fairness, people need to make thier own mistakes- his lightbulb moment will come in due course. Or it might not and they may end up multi-millionaires and buying you dinner! Who knows for sure?

All the best with it, Ive had these clashes with my freinds ( its usually me saying, I cant afford to come out) so I do sympathise, but freindships a 2 way street, and hopefully open communication should help

Good luck with it!!

BobProperty

To the OP. From what has been said I can't see this business plan working as I think it falls down at the point he gets a contract (if that ever happens). He farms out the work to students, they do 5 hours work and then want paying. From what? He is going to sound like a scam merchant if he thinks he can hold off paying his "subcontractors" until he is paid by his client (I am currently still waiting to get paid by someone from 2 years ago, and they are a nationally known name). If he gets into this situation and can't pay his subcontractors he won't find it easy getting replacements.
Secondly, sooner or later, this couple will run out of money. They can't go on running up debt and trying to live on 2 days work in a pet shop. Are they getting close to this point, or do you suspect that they are? What is going to happen if a creditor gets stroppy and they can't pay? Could you persuade him to work (even part time) while his master plan is developed? Why is his OH only working 2 days a week? The whole set up seems strange to me. I'm curious to find out what happens, please keep us updated.

elona

If he is "outstaying his welcome " could you get someone to phone you or text yourself so that when the phone goes you both have a reason to be going out.

Invent a family crisis or girlfriend in real trouble etc - just to get the message over that you will both be distancing yourselves a bit.

You sound really "trapped" and will end up really resenting them both.