sole trader query

slaz

Hi - hope someone can help...
I am a sole trader with 12 employees, my business is in catering and I currently run a catering facility for a social club (which I have been doing for the last 12 years).
The club outsourced its catering to me which means I cater for the clubs members and also the general public who use the facilities of the club without being a member.
The contract with the club states:
1) that I have to hire my own staff
2) pay rent
3) pay my share of the utilities
4) maintain existing kitchen equipment and pay for any new equipment required.
This has been a great contract for me and I am now in fear of losing the contract as the social club has a 'management committee' made up of members and the club itself has not been making that much money through its 'bar'.
The club now want me to produce my accounts to them so that they can see if it makes a lot of money so they can bring the catering back 'inside'.
My contract has another two years left to run and I am not happy to share my accounts with the club, I live in a small village and some of the members are my neighbours and I do not want them knowing how much money I make. Nor do I feel its the committee's business to know how much i make - there is nothing in the contract about showing them my accounts.
I have been threatened by the management committee that if I fail to produce my accounts within seven days that they will not renew my contract with them.
Don't know what to do?

pjclar02

I think you are perfectly within your rights not to provide accounts to them. Your accounts could (they may not) include income from lots of sources other than this social club, and would therefore be meaningless to them.

If your contract has two years to run, I would refuse to provide the accounts and spend the next two years looking for a similarly profitable contract.

You may also want to think about registering as a limited company (depending upon the level of turnover etc), as if you have 12 employees you must be getting toward the size where incorporation would be beneficial.

somethingcorporate

The outcomes I can see here are:

You show them your accounts and you are :

A) very profitable and they bring it in house.
not very profitable and they let you keep doing it.

Or you do not show them your accounts and they bring it in house anyway.

I cannot see any of these outcomes being favourable for you so you should really spend the next 2 years looking for a new contract elsewhere.

If there is nothing in the contract about showing accounts etc then you do not have to, I cannot see any benefit in it for you.

slaz

The letter from the committee also says that they are looking for a grant from the council so they will also be showing my accounts to the council!
this is a new committee made up of some very jealous people - I had a great relationship with the old committee who knew I was good for business as my catering brought in new business for them and increased their bar takings. this new committee however have done everything possible to 'get me out'. A few of the committee members have no jobs and see it as a way to gain employment for them and family etc. The 'show me your accounts' is another way to try and get me out. The business has been very profitable for me over the years and if I lost the contact would be in dire financial straits.
It is very hard to set up elsewhere as its in a small town and there are no other businesses in the town that need my services.
However, i realise that my time there is numbered and I want to leave with my head held high rather than everyone gossiping about my earnings!

somethingcorporate

Yep, given it is not a limited company they are asking to see your private (and personal) records which is completely unreasonable behavior.

Just tough it out and spend the next 2 years until the contract expires to work on new avenues for income. Why not get in contact with some of the previous committee members to see what they are now doing and if there is anywhere they can find you new opportunities.

YoYoY

slaz wrote: »

Hi - hope someone can help...
I am a sole trader with 12 employees, my business is in catering and I currently run a catering facility for a social club (which I have been doing for the last 12 years).
The club outsourced its catering to me which means I cater for the clubs members and also the general public who use the facilities of the club without being a member.
The contract with the club states:
1) that I have to hire my own staff
2) pay rent
3) pay my share of the utilities
4) maintain existing kitchen equipment and pay for any new equipment required.
This has been a great contract for me and I am now in fear of losing the contract as the social club has a 'management committee' made up of members and the club itself has not been making that much money through its 'bar'.
The club now want me to produce my accounts to them so that they can see if it makes a lot of money so they can bring the catering back 'inside'.
My contract has another two years left to run and I am not happy to share my accounts with the club, I live in a small village and some of the members are my neighbours and I do not want them knowing how much money I make. Nor do I feel its the committee's business to know how much i make - there is nothing in the contract about showing them my accounts.
I have been threatened by the management committee that if I fail to produce my accounts within seven days that they will not renew my contract with them.
Don't know what to do?

Cheeky blighters! :mad:

You say you've run their catering facility for 12 years, so I guess in that time you've had to renew the contract a few times?

If so, they are presumably happy with your services and price.

Of course, it's up to them if they want to bring the catering services back in house at the end of the current contract, but it'll be a huge financial risk to them if they haven't a clue what it may cost them (which they don't appear to have, else they wouldn't be wanting to see your books), let alone whether they have the skills to run it.

I can't see anyone else opening up their business accounts to the club either, and it won't be any use as they won't reflect the profit/loss the catering facility.

YoYoY

slaz wrote: »

The letter from the committee also says that they are looking for a grant from the council so they will also be showing my accounts to the council!...

So presumably they won't be able to get that without your co-operation either.

Sounds like this new committee is set on destroying this club

longtimelurkersam

you could always show them a set of accounts.....it does not necessarily have to be the right set or an accurate set!!!!

somethingcorporate

longtimelurkersam wrote: »

you could always show them a set of accounts.....it does not necessarily have to be the right set or an accurate set!!!!

Sound dangerous, especially if these are given over with the intention of misleading.

In this kind of business reputation is everything and the OP has already stated that they want to walk away with their head held high.

I'd suggest not to do this and just tough it out. You may find that with the uncertainty over whether they would make any money that they may renew!

heretolearn_2

What a horrible situation for you.

What they are asking for is commercially sensitive information about your business and they have absolutely no right to see anything. I'd write officially to the committee stating that you will not be providing this information.

If they wish to put together a business plan to consider ending your contract, and to apply for a grant, that's something they have to do themselves. It's astonishing that they are asking you to basically do it for them.

However, on the plus side, they have been foolish enough to release their own commercially sensitive information to you, that they are looking to not renew the contract.

This gives you two years warning of their plans and two years to find a new contract/change your business to continue without it/make exit plans.

Can you find other catering opportunities to start in tandem with this current contract?

You also need to start planning for redundancies for your staff if this is not going to provide enough work for all of them.

As a matter of urgency, you need to have a meeting with all your staff, and remind them that all information on the business is confidential. They should not answer any 'innocent' queries on how many meals are sold etc, and that passing on any information about your business would be gross misconduct.

Mistral001

It looks to me as if the members on this committee are amateurs pretending to know something about business. If you collude with them, you will only look just as amateurish to people who really know what they are doing.