He Takes $20,000 a Month and Does Nothing
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- Опубліковано 26 вер 2024
- He Takes $20,000 a Month and Does Nothing
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Would love to hear dad's side. LOL
Always two or more dudes if a story. Maybe he riding on the coat tails of Dad's success.
@@philshoup1582maybe
@@philshoup1582he said he’s been running it on his own for 5 years without his dad.
The dad probably worked his ass off to get the company to where it is today. And this is how he’s being treated by his son.
@@philshoup1582 seems to me like the opposite the dad is depending on the sons success.
Attorneys are employees. Truer words were ever spoken.
Yes and the reason you pay them is for their expertise. If you're not going to take that expertise, just don't hire them and save the money. You'll need it (and likely more) when you get sued.
My friend inherited a construction company from his father that does $2M per year in profit. He got all of the contracts, customers and equipment handed to him.
He has to pay his father $2,000 a week until he dies.
Outrageously good deal lol
It not actaully..
@@Cent51 explain how?
Can your friend run the business?
@@almaur703 yes he’s very competent in this area
It's a great deal. @@Cent51 104k in perpetuities on $2m in profits is 5%.
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Attorneys are not in charge. What great advice. I wish more people knew this in business.
Except that's not true. When a lawsuit happens, who do you listen to then? Attorneys are not employees. They are officers of the court. They are always obligated to take the side of the court and the law before any employer. Furthermore, they have higher ethical standards (or should in theory) than most people.
@@Grigsy Yeah, right.
@@GrigsyAttorneys are not in fact officers of the court, unless they are prosecutors. Not sure who told you that they were lol
That's the kind of advice that gets people sued.
@@Tim85-y2q This is America, you can sue or get get sued for anything anyway.
Dad building a successful business and THEN bringing Gary to participate is what the commenters are hearing. Gary and his Dad starting the business together from nothing is something completely different.
Could not agree more
Assumptions***
The son claims he and dad built the business together. Without hearing dad's take, that is what we and Dave) go on. The keyboard warriors filling in blanks they aren't qualified to do should give it a rest.
@@mikeb8342we can only dream, don't you think if they had something better to do they would do it?
Well in that case that would kind of make Gary an employee who's lucky enough to get 49 per cent of what his dad built. Just be happy with what you got and don't get too greedy then. This isn't a case of shark tank where Mark Cuban got a huge percentage of the company . Someone built it from the ground floor
If it was my dad, I'd take care of my old man till the man above takes him to a better place.
Well said, honor your mother and father.
Saying my father "doesn't participate", or "take, take take" is very disrespectful.
Without the father there would not have been a business 15 years ago.
He never said I could have done this alone.
The problem in this situation is the child sounds like a spoiled little bitch.. it was probably the dads capital and backbone that built it
Yeah, the guy is making 20k a month and splitting profits. He could take 5k a month, reinvest the 15k a month into growth.
so you'll destroy a mutil million dollar company to help your pops?
@@19Burgandyhow is that destroying it? he’s still making more money than most people haha this prick is being greedy and doesn’t realise his old man is the one that built everything
"I have been awful nice". Dude, he owns 51%.
And he owns 49%. So what? Majority shareholder doesn't mean it's fully yours. It just means you have majority share of the profits.
@@massimo4307Yes it does. If you own the majority of a business it is your business, and if u wanted to get rid of the other share holders you could. It’s your business of u own the majority that’s y some people never give up 51%
Yeah, at 49% son isn't really an owner for most intents and purposes.
He's more like a manager who happens to be entitled to a share of the profits.
@@Tim85-y2q No, at 49% he is still part owner. That's how shares work.
@@Tim85-y2q that's the problem. Dad is a shareholder but demanding to also be paid like an employee despite not working.
I'd like to hear how the "ashes" really worked. Who came into the business with what equity? It's important. It's easy to gloss it over and call it "the ashes".
This is an amazing example about Dave's background can help this thriving business and while saving the family
I paid my Dad a fixed rent for setting me up in business for over 8yrs that he just made up out of thin until he passed away😢. Did not once question him and i also paid an actual rent to the Landlord that owned the property we worked out of. Also gave him money to invest in other businesses aswell. That is respect this guy needs to learn. His Dad probably keeping the 51% because he knows deep down from experience.... an this guy proved him right again!
Gary is a manchild throwing his toys..
No concept of how to deal in business.
E
Two years for me to graduate with my Electrical engineering degree and NO I’m not 20yo
My father wanted to start a business with a horrible model in mind.
“Dad the website asks what will be the initial amount of stock, because it’ll be 3 owners i say 10,000”
His reply: wtf r u regarded why tf do you want our company to have stock?!?! Ur a dumbass
“What does the game plan look like for the company?”
Reply: I don’t give a shi. If that shi don’t work out I’ll just retire
“Ok but like I’m about to get my EE degree, if you’re not willing to talking things out I don’t feel confident about doing this”
His reply: are you a goddamn regard? I don’t have to tell you shi etc etc etc
Point is many fathers need to stop with the narcissistic behavior
Except there is no proof any of this applies to this guy, this guys dad isnt reinvesting the money in other businesses, he didnt grow the company and give it to his son, all you're saying is anecdotal to why your situation is different and does not apply
@@jackirerioa4971 Daddy doesn't have to do anything. He owns the business and the son chose the wrong partner if he is already complaining.
The easiest way is selling his shares and building another company, but we all know he can't do it.
Dave's well rounded expertise was solid on this call.
This guy wont listen to Dave, but he should!
If this is such a bad deal, how about the son quits? Let them both hire a CEO.
Then they both won’t make any money 😂
@@pnwflipper2089 Need to do the math. If they pay the CEO what one of them gets then they still have the amount the other makes. That can be split in half. Neither works for it. Each gets same amount.
@@RichardBurcham-w7o and both get a pay cut!
@@RichardBurcham-w7oSomeone who manages 12 people doesn‘t need to make 20k
You wouldn't pay a CEO 20k unless it's a bigger business and structure that once they grow to 5mil, they get 250k a yr. Until then, 150-170k should be good with a bonus to 250-350k
How can you run a company and not know the difference between dividends and salary.
You're assuming a corporate structure. If this is a partnership or an LLC taxed as a partnership, there are no owner wages. Understanding the difference between guaranteed payments and distributions is more nuanced.
@@kelleep535Not exactly. An owner of an LLC or partnership can still pay himself a W2 salary distinct from the pass through treatment (aka dividend).
It's not the type of company with formal dividends.
He mentioned Owner Draws, with a pass through entity like that the default isn't a formalized salary.
Why not show your dad a road map to how this would benefit both of you:
1. You become the CEO and accept a CEO salary.
2. You identify at current revenue what sorts of profits you could take.
3. You outline a plan on how to grow the business of you were to reinvest some profits into growth efforts.
4. You show your dad that he can make as much or even more money in distributions bc you have successfully grown your business.
Win win for you and your dad
Did the same thing, took my dads business to $5 million a year, working 60 hour weeks and made $40k a year bc I was going to be "given" the business. Then after 12 years I was told I was going to have to "buy" the business. Left in less than a month.
How is the business doing without?
My husband had the same with his folks. They gave him money to open business. He did most of the work. Took virtually no salary but his folks lived off the business. 12 years. I had enough eventually and was so happy when covid killed it. His parents think my husband owes him their 'venture capital ' plus interest despite them living off it for 12 years.... nice
Not the same- he is taking home $250,000 a year not $40,000. The son is a jerk.
@@scottlaux6934the son WOULD be a jerk.... if he hadn't built the business WITH his dad. Unless you have some untold knowledge of this situation, the given is that THEY BOTH built the business together, but dad doesn't want to participate anymore. Since son let this fly for five years, he's going to have a helluva time getting this straightened out. Dad has entitlement syndrome.
@@mikeb8342 The problem with that argument is that dad's majority stake actually does entitle him to do exactly what he's doing. If that doesn't work for son, he can move on or buy dad out, but you can't call someone entitled for exercising their prerogative as owner. He's acting entitled because he is.
An attorney won’t do shit when his dad has 51%
And dad probably financed the whole thing and is getting his equity back.
That’s Hollywood, not reality. 51% ownership doesn’t make you king like it does in the movies.
@@Quincy_MorrisYes it does
@@Quincy_Morris owning 51% of a company makes you owner of a company with very few exceptions.
The problem for dad is 51% does not matter if he doesn’t want to work the business. The son can pull up his stake and start over, he has the current relationships and drive to work. They just need to figure it out. But bottom line that 51% only entitles dad to 51% of net revenue after expenses and if he isn’t working he should not be getting a salary.
I’m a partner with my son in a company that does $50 Million a year revenue and i get $1Million a month and do nothing why? Because i started the damn company and was the one who risked everything
12 million in distribution is a bad use of capital...
@@Mr_Martz_Mc We are not trying to grow kiddo
Your bank risked everything.
@@ECUCHRIS904 How did my Bank risk anything? I never took out a loan and they just hold my money
You want take distributions then that’s all great and well. You don’t take a salary on top of your distribution share.
Take your own money and walk. Start over and give him the whole thing.
Why in the world would you want to reset 15 years of work and building if you could find a way to make it work?
I'd be interested to know the specifics of how one can "take their own money" in this scenario?
Nahh Family is not Worth the extra % Let the Dad have it get Paid from Work Income..
@@robcd7112 Probably the money they saved over the years.
Yup or he cuts his income in half puts 10k from what he was earning (20k) and sacrifices his income for more in the future like his dad did when he started.
Not hearing both sides of the story here... Did DAD create the business? Did DAD get things going? Does DAD consider himself the CEO or President? At 51% ownership, did DAD give that 49% to son? How much is son profiting off what DAD did?
P.S. (Added after many comments below) Dave DID finish strong and gave great advice and insight. Just would have been good to get some probing of the son's perspective.
i mean dave’s advice still applies to all of that tho
I'm going to guess that dad funded the whole business and that is why he had 51%. Son likely had sweat equity to earn his 49% and isn't happy with that anymore.
You formed your statement as a question yet it’s clear you’ve made assumptions.
Did... not does. Sell and retire off that
Starting a business may entitle you to something for a period of time, but adding zero value loses its marginal utility to the business, industry and country at a certain tipping point.
Thinking you are entitled to suck off a teet in perpetuity without adding value or productivity is the cancerous ideology that is screwing this country
"Allowing" the owner to take take take? He OWNS IT.
You didn't even listen to what's actually going on 🤦♂️🤦♂️🤦♂️
"I can't go forward with this anymore."
. . . taking a salary of $20,000.00 per month must be really exhausting. Poor, son. 🙄
None of the people in the comments even listened to the entire story. He wants to figure out a way he can put money back into the business and possibly buy his dad out. He’s not satisfied with the current deal which I don’t blame him and Dave even agreed!
Yeah I would say the same thing about the father who is not doing anything for the business. The son is running the business, the father is just taking money from it.
@@jeraldbottcher1588: Indeed, but that's his prerogative as the majority owner.
@@danieljohnson4418 Actually taking money from the business before the bills are paid can be illegal. IN any case it may be legal, but it is very poor business. You always pay the bills including salaries 1st, then take profits. The son should have been taking a salary all along. Instead he has also been taking profits before paying the bills. His work may be worth far more than the amount he was taking, may be less. But the father is not involved in running the business. He is an investor.
The investors pay out should be directly related to the amount of profit, After the bills are paid. If the business was losing money would he then be entitled to 20k a month? and the answer to that is no. What if he takes the 20k but there is not enough money to pay the sone anything? does he still get the 20k? No
Dummy should cut his own income in half if he wants to grow. The dad clearly doesn’t care to grow.
Dave is right on this one. The father is not an employee so it is time to get the numbers completely right
On paper he probably is. I'd be willing to bet he still has some official title in the business and technically he's still needed for high-level decision making. You can be an employee while not actively being engaged in day to day operations.
Sounds like something my stepson pulled with me and my real estate business. I brought him in after he suffered from an emotional breakdown as a network admin. The business grew super fast. When I croak he would inherit everything which at this time was about $8 mil in residential rental real estate. One day he decided that we didn’t think a like and thought he would go off on his own and do his gig in real estate without me and still end up with all the current real estate holdings. Obviously he got too big for his trousers and flopped because he thought it was so easy.
End story, when he went off on his own, I cut him out of my real estate. No free rides.
He currently is 46. So a generation seeing their parent succeed thinking it’s no big deal without sacrifice.
The son calling in has a set of nuts not to appreciate what was handed to him. The son can be replaced for less than $240,000 per year.
I admire the way you dealt with his sense of entitlement.
Exactly
Who says his son didnt build the business from day 1?
The fact that "dad" cut out 1% to have some veto power makes him sound like an asshat
The fact that you ignored him saying that his dad is doing NOTHING for the business is very telling of who actually has a sense of entitlement here
In Seattle a competent person to run a pretty specialized business isn't going to be cheap, and then the son who has actually been running things could be your competition. And the son would still get paid his 49% of the profits.
$460,000-$200,000= $260,000 profit split between father and son 51%-49%. Dad would be receiving like $131,000, assuming the manager was both honest and competent. So the problem is that the son is doing all the work, and isn't drawing a salary for the work.
My dad found me my first ever job when I was 15. He knew a guy who ran a cleaning business and I got a job there. To "pay him back" for referring me for the job, I had to pay him 50% of my wages as long as I held the job. Yes, I was 15 but I also paid for all my own food and expenses because my dad refused to. I quit that job and got a different one as soon as I could because it stung so much.
Dad is the major shareholder. Suck it up and start your own business that you own.
Maybe this. If they can't get along, for sure this.
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He said the word “MY” about 7 times within his first sentence. Just saying
Yeah, at best it's "our". At best.
You noticed that too eh?
He's the one running the business. Of course it feels like his, even though he shares ownership.
Dude’s ridiculously entitled. What a greedy jerk.
Father has control , he sets rules . If he doesnt want to change it way it is
Bingo.
The majority owner of the company has different goals for the company than the minority owner. Tough cookies bud.
Son could quit as CEO/manager, and receive just under half of the profits. For every $202,000 receives, the son gets $198,000. It's in their interest to work together.
He needs to have Dad buy him out and then he quits. Start over, and take customers as it fails apart.
They just change the name of slave now they say employee
The owner got to keep their title
Slaves had an owner
Employees will say this is our owner
parents enslaving their children
its just "hired servants"
Master and servant
Owner and servant
Owner and slave
Owner and employee
Honor your' owners
Owners
Sell their home at a profits
Make an extra $100,000 or $200,000
Increase the cost of living on your kids $100,000.00 +
so that your kids gotta work that much extra time away from their home and family
Sell your home for a profit
the effect is immediate
& they can pay for the slavery you forced upon them
better yet
make the basic simple necessity of a home more & more unattainable
a completely out of reach goal
Have your kids go work everyday for money made from paper made from cotton 👁️ ∆ 💵
and put Egyptian pyramid on it so that they know that their slaves in Egypt
And you made their bed with Egyptian cotton sheets because you were mentally asleep
And get them to work and get part of their energy to enrich your life if you can do that with your children good if you can do it with other people's children even better
Get other people's kids to enrich your life while you enslave them in future generations
yea!!!! 👹
They don't need all their work energy to provide for themselves
they can provide for you l!!!!!!
get them to sign mortgages and loans / get them "sign" on a "flat line"
EKG ________________________
SIgN herE
Instead of living being a gift
enslave them!
MAKE THEM SURVIV E A LOAN 💵
E gypt them!!! she jipped them
Does this guy realise that he would get 51% as inheritance eventually (so just shut up and just adjust 20k /month is good)
Dave is right ,Take a salary for your work .
Exactly. Like holy crap be nice to your DAD. It's most likely going to your down the road anyways.
Exactly let dad and mom retire comfortably they deserve it.
Maybe not. It could be split among mom, siblings, and other family. Plus, that could be in 20-30 years
@@marmantole that is why he should take salary
yeah just let your business eventually tank because you're taking 51 percent of your profits to an unproductive entity that's eating away any growth your company would have lol.
This is a fantastic discussion about those who work for family business and want to push forward but want to Maintain families ties. Too many fall out forever over money. This is the pragmatic approach and always must come from position of respect to your father. Father always wants what’s best for you but you can’t back him into a corner because the disrespect he feels especially when he helped set you up could destroy everything. Kudos to the caller for having the tenacity to ask advice so publicly. Kinda proves that he deserves to get an amicable solution to all this. Nothing rips your soul out than being in position of conflict with you father over business when you both actually love each other inside. Be good to do a follow up video to see how the discussion went. Sometimes it’s not the question but the actually result that is the biggest teacher 😉
Dave’s advice here is fitting for the caller. It is his best-approach scenario. However, when all is considered, it may be improbable. But that’s okay. He’ll learn something either way.
Guy invented the coffee machine and gave it to you and now you don't want to bring him a cup.
He's giving him closer to a whole pot of coffee lol
They built it together
We didn't hear the dad's side@@pigeon7777
Watch the clip again and listen instead of making assumptions.
I could never work with family I love them too much
Yeah it’s something I came to accept
Oh gosh, true! My dad and grandpa did great somehow. It was a farm. I'll have to ask for questions about that... I personally can't work with family. Too much tied up and someone feels taken advantage of in the end. And it does end.
Dave is very underrated on business advice.
This advice was crap
@@crazylegs225 what part was bad advice?
@@crazylegs225Tell us how you would handle it.
@crazylegs225 Dave was absolutely spot on. Your response is proof you do not own a business.
@@kentuckyjim5108 exactly.
Money do make some people heartless. Dude, he is your dad. I don't know about other people but I will gladly let that money go for my mom or dad. Seems like the business is doing well. The son is already doing well; he just wants more. I would never put money over a good relationship with my family.
All true, but a consultant doing a lot of work for fam businesses once told me that they can be snake pits. Exactly because fam is more important, but still have to live your life..
I believe he wants to grow the business, and his father taking profits but not contributing like he used to is holding him back in that endeavour. There needs to be a middle ground if the father isn't contributing. Sounds like they are basically splitting profit. I understand why he feels frustrated. Although I don't think he is really listening to Dave going by his tone on "ah-humm". Dave isn't telling him what he thought he was gonna hear. He doesn't want a solution...he just wants what he wants...his dad out of the business.
@@stavroulaantoniou9898how did the father get 51% if he didn’t contribute ? Obviously he did something
@giombi15 I am sure he did. Personally I think 5 years of not contributing, something has to change. They need to have a frank and constructive conversation. Not entirely fair that the son has to carry the load bit not able to steer the ship.
Dave is so logical. Take all the emotion out of it and lay out a good plan!
I totally approve of this advice and message.
You’re daddy is the boss any day of the week.
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It's very hard to change what has been laid as the foundation of a company when family is the foundation. I found it was easier to just close the doors, move, and open up under a different name. Friends are the same ways. You can't let anyone take over or have major influence if you are the brains and want to remain in control. Family and friends will always have strings attached.
Blaming dad for not having any reinvestment while drawing out 20k a month plus distribution of profits as an annual bonus is just asinine.
The son's 20k per month is the son's salary for operating the actual business that generates the revenue.
The problem is the father is slurping that down without doing anything to contribute.
@@priestesslucy3299Exactly this.
Dad is greedy and lazy.
Man a lot of y’all aren’t business owners and it shows. Feelings have no place in business, even with family, and a lot of y’all are saying he should think about his dad, his dad’s old, etc. we know nothing about the dad. I would definitely like to hear dad’s side, too, but Dave gave the best advice.
The son needs a salary for his work, which his dad wouldn’t get since he’s not actually working at the company. Buying his dad out is a different matter entirely.
Too many of y’all are in your emotions. The son isn’t trying to screw his dad out of a retirement or anything, in fact he’s trying to buy the dad’s portion out. This is no different than cutting your losses to maintain profits only his dad would get a nice, fat severance package. If you’re unable to remove your emotions when running a business then either don’t own one or don’t go into business with family. And if you think I’m being harsh, read some of the other comments where people are suggesting the son leave the company and start his own business by himself. That would give the son what he wants, 100% of the profits, but it would screw his dad over by leaving him to fend for himself at a company he isn’t running, only to ruin the company and the father/son relationship.
Unfortunately this relationship may already be ruined until the son breaks free.
It feels like the father is feeling entitled to having the business feed him the gravy train without any effort on his part.
There is a very real chance their only opportunity to heal could be a clean break and the passage of time.
The thing is starting his own company is something the son has control over. Buying out dad if he doesn't want to be bought out or changing the pay structure without the approval of the majority owner are not things he has control over.
All of Dave's advice here would require the dad to sign off on it.
Son probably needs to have a conversation something along the lines of "Dad, if you're not willing to do X I'm going to have to do Y in response".
Dave's advice is spot on. The caller's problem is that he's working for free, not that his dad is a 51% owner. Caller needs to stop working for free and start getting paid for his work, else he should start his own company and then he'll retain 100% of the profits and he can work for his own company instead while also collecting 49% profit from the other company he shares with his dad (which according to the caller will be $0 without his working effort at the company).
My step son pulled that truck on me. I owned 51% and it was a running company for over 20 years. D he thought he would double dip. Didn’t work well for him. His business flopped and I cut him out of the preexisting business.
If the arrangement is the Don is a working owner, leaving the company voids the agreement. The son was to be working for his future instead of only seeing to the end of his nose.
Were you paying your stepson market wage?
@@mikemay777. It is sad he is trying to cut his own dad out of the business. His dad is a lot older and is tired, but he is probably giving important business advice. I am self employed and understand how hard it is to survive in business.
@@CroisMoispot on, he is an ungrateful pos,
He said he takes 20k a month also. Doesn’t sound like he’s working free…
This dude isn’t respecting his Dad. He’s not awful nice. He wants the deal done by cutting him out. What is his Dad going to live on? Dad wants to continue owning his company.
Yes!!! This comment!! Sounds like a spoiled, ungrateful kid who sounds like hes borderline trying a hostile takeover. Show some gratitude dude! Most kids only get their last name from their fathers
He said they started together from ashes in 2009, so they started and grew it together That’s what he’s saying at least.
@@Hvacguy1990 Even so, Dad clearly put up for capital. You don't just get the controlling interest in a business for no reason.
He's not talking about TAKING the business from his dad, he's talking about BUYING his shares of the business, meaning his dad will probably get several million out of the deal. No one to pity here.
@@Tim85-y2q you do when your son trusts you. (Baseless speculation, but so are all the other assumptions going on here)
daves plan of him getting a CEO salary obviously makes sense, but good luck getting the dad to sign onto that, thats like asking Congress to vote for a paycut...
For real, or asking a landlord to reduce the rent, not gonna happen. Oh they'll listen if it's to benefit them, but if it makes sense or helps you, not happening.
Yeah, Dave's advice is talking about what the majority owner (dad) should do, but the relevent points are actually what he will do and what he can do.
Good advice. However, the problem is the father is still going to want his profit distribution; he's not going to want to reinvest those dollars into the business. So this small business still sounds like it will have cash flow issues.
Yep, that is why it is time to buy him out.
@@jeraldbottcher1588 That assumes he's willing to be bought out and son can find the resources to do it. Dad may be happy with the cash flow his 51% is getting him and have no plans to go anywhere. (yes, I'm aware some partnership agreements can have provisions for a forced buyout, but if son had one of those he likely would have exercised it already).
That assumes he's willing to be bought out.
It sounds like your father started the business and you owe him everything you have.
Sounds like dads of old wanted cheap free labor out of their children!
Greed ruins even the best of us.
He’s been operating the business the last 5 years wtf are you talking about
@@aleffel9668still, dad needs to rest and that lay is pretty much his retirement
I’m with the father.
imagine working for this guy.
Greedy and I have a feeling there is a wife behind all of this
Father started the business for sure.
Complete mess
@@MrMustangrick he did start it... *_with the caller._*
@@New-bw4kzBased. She's sweetening her 50% comp package for the near future
“Working with my dad making 20K a month but I want to kick him out because I am a greedy, ungrateful guy” there I fixed your title.
Exactly, I have little respect for this guy. But others may have all the respect for him. Idc either way
It doesn’t sound like that at all. Sounds like dad was better at producing revenue then running a company. Now that he is not producing revenue his compensated value is likely above his ownership value. If there is not enough profits for him to live on (distribution only) then he needs to come back or sell his equity position.
@@flybyav8tor dad is the principal owner. He sets the rule. He could fire the son and promote the next guy up all the same if he wanted
Dad's not working.
He's expecting his son to fund his retirement for the rest of his life.
If I were the son, I wouldn't have set up such a terrible business partnership.
If I were in his situation, I'd be stockpiling cash. I'd stop trying to grow the business at all. I'd get ready to buy dad out. Instead of growing the partnership business. I'd start my own side business offering other services. If he refused a reasonable buy out. The partnership would get the bare minimum to keep it running and I would focus on my business. Once my business exceeds Dad's. I would offer him another buyout and just stop participating after that.
Dad and I can both pull salaries for doing nothing. I'll focus on my own thing.
@@getinthespace7715 dad doesn't need to work when it's HIS company. He also he zero obligation to sell. Son doesn't like it then he can leave And start his own business
One of my coworkers had this exact same scenario except that the dad put in his Will to give the stepmom his 51%.
I thought of that scenario in this situation. His mom will continue to own the majority.
No way he will let the gravy train end.
He sees it as an allowance not a salary.
The Father owns 51% of the company.
The son owns 49%.
If the son uses from his salary $5K or $10K a month to devote to growth of the company then he can manoeuvre his way to owning a higher percentage of the company and still achieve growth
Dave is wrong. 51% owner = owner. The son doesn't HAVE to buy him, he just wants to. And the son's not a good business person if he didn't understand he should be drawing a salary apart from his cut of the profits.
Dad probably worked until last few years but started slowing down, so both are drawing a salary but one stoped working
dave said 51% owner is not an owner?? when
you're forgetting the father-son dynamic here. If dad deceived son, it's not son's fault for trusting dad
@@yobs-kl3hnnever lol
Exactly what I said, son doesn't know enough to take a salary therefore is resentlful of dad but dad would be wise to take a buyout since son really doesn't have a clue how to even structure a business.
1:13 It's not your business. Congrats on being in a partnership. There should have been a path to control if he wanted you to run it some day.
This kid is a piece of work….
Solid, solid advice!
LOVE Dave's approach. Shaming (even IF justified) will only put you in the toilet.
Pray that edge out of you man. Go in with a sweet HUMBLE spirit, sugar & butter. Presentation is everything
you can tell dave knows how to put a deal together !
The bottom line is after the business deal is done, they're still Father and Son. So it needs to be approached in that light.
I am embarrassed for this caller. His sense of entitlement is only dwarfed by his lack of appreciation for his father.
I understand what Gary is trying to do and say, but the frustration is so overwhelming, it's coming out wrong when he says it and it's making him look bad.
Gary is an ungrateful POS
And if you take family out of it it's the same frustration countless minority owners feel when the majority owner has different goals for the company.
The reality of being a minority owner is that sometimes you have to watch someone else steer the ship in a different direction than you want to go.
All the commenters are assuming that the father started the company and gave it to his son. That’s not the situation that is described. He clearly states that they started the company TOGETHER in 2009. This isn’t a “he’s enjoying the fruits of his labor and retirement”, this is a co-founder/co-owner who is raking in money without doing anything. And this has clearly been going on for some time
It's depressing how bad the general listening ability is here.
Dave even explains the proper way to reaolve this and the comments are still filled with people rejecting reality and replacing it with their own ideas.
Dave's solution to how to resolve it relies on the assumption that dad would go along with it. I see no reason to assume that would be the case. In most cases a minority owner can't force squat in a private company.
@@Tim85-y2q I think having a lawyer will help. Someone unbiased who can see the facts. I’m sure they’ll come through it with a better outlook
Great advice Dave
Dude take care of your father. He doesn't have a salary he had dividends, the agreement seems to be 20k a month and 50%of leftovers, thats a great deal for a 3m company, thats actually super high. Its as if you arent investing in the business or keep cash reserves. Me and my father are in the same situation. He built the company, he deserves to take money and do nothing till he dies. Why not with a 3m company with 12 employees. 20k a month is great. When he dies you get the shares and you can then make 40k a month. Take care of your father. Period
the father is exploiting his son. He can fritter away the money he gets from selling the business. Wait till he dies?!?!!? Jezz
@tedroberts19 No, the father built the company. They are making 240k a year before dividends. They can lower their income together, but as a son in the exact same situation, we make as a salary half of that amount before dividends. We do that so we can put money back into the company for equipment, training, buffer, and hiring. My father made me rich. Why wouldn't I take care of him for that?
Some children don't have perspective. Well, as an Asian, we tend to take care of our parents just like our parents took care of us when were kids and even sometimes as adults.
@whatevergoesforme5129 the American culture is very selfish. My Christian culture promotes me to not only take care of my father but all people that I can. Obviously some nuance in that, you can't just throw money at people's problems, but God leads you to give. But how much and when
@@cryptocorey8582 father and son built the company *_together_*
Spoiled kid wants dads share of the profit. If I were dad I would fire this kid and let him know I can replace you with someone much cheaper.
We have the same problem. Owners working the business are not being paid as employees while other owners do nothing and make the same. Fast track to family problems and resentments.
This is why you should NEVER go into business with your family. Your relationship with your parents is the second most important relationship in your life, only behind your own children. If you let money come between you and your father and ruin your relationship, youve done something terribly wrong along the way.
As an adult, wouldn't your relationship with your spouse take priority over parents?
$3mm revenue, he & dad take $20k/month each off top (which is 16%) leaving 84% for OpEx then split net profit 51/49. This is a common family business structure. 1 Son should take an additional salary as CEO. 2. I wonder why Son was "unsuccessful" at buying Dad out in 2019. 3. Gotta really wonder if the $20k/month to Dad for last 5 years is part of the buyout plan... IJS
Sounds like the 20K a month is just an owner draw, an advance on the year end profits
Dave was an absolute OG on this call! Realist he ever said! Honor your dad! Quit with the greed, why cant you take some of your profits and start another company on the side and own 100% of that?
The real question here is: What if dad says no? As the majority owner he CAN say no.
And the answer at that point has to be scorched earth. I'm going to stop acting as a CEO, and since you're not acting as a CEO, no one will run the business, and it will fall apart. I'm going to start up a NEW business WITHOUT you, offer all our current employees jobs at their current pay or better, and then you get nothing but 51% of the old company's assets after the liabilities are paid.
It's a false assumption that only the two of then could run the business. Plenty of owners hire managers to do that for them.
I wouldn't sell it either if I was getting $20,000 a month to set on my ass.
His Dad is still an owner and should be getting profit share, but he is no longer working for the company, so he should not be taking a salary. First step is to take him off payroll because he is no longer working for the company. He still gets his 51% of profits at end of the year as an owner that doesn't work for the company. He shouldn't be getting the 20k a month salary when he is no longer working for the company.
Dad's not coming in to the office every day. That doesn't necessarily mean he's not still officially working for the company.
My guess is that the buyout would have to be huge for dad to voluntarily give up $240k/yr for doing nothing.
Dad: “Let’s see… I could do no work and receive $240k per year in perpetuity plus the big share of the profits…. Or, you could give me a one-time payout of what, like $1m and then nothing? No thanks, bud, I think I’m good just where I am.”
But the 240k is stealing from the business
@@priestesslucy3299
When you take $100 out of an ATM are you stealing the money?
No. Because it’s your money.
We can say that dad isn’t contributing to the business anymore, and that it shouldn’t be set up the way that it is. BUT, it *was* set up that way. The son might not like the arrangement now, but he agreed to the terms whenever they were written.
Dad is a cofounder and is the majority owner. I’m not saying he should push everybody around and do whatever he wants to do, but he’s top dog in the organization. There are books on business strategies out there that would applaud his position. One with which I am familiar expressly encourages people to avoid getting trapped as a “worker” in your business; instead recommending hiring competent people to run the day-to-day while you collect your share and invest it in creating other businesses, increasing and diversifying your revenue streams.
Yes, ideally, dad would simply be an owner and collect a share of the profits without also getting a salary for no work, but the time to sort out those expectations was when the thing was started and the papers were drawn up. Dad essentially has zero motivation to move from $240k and profits for life to a one-time lump sum which would likely equal 2 or 3 years of what he normally gets then get nothing after that.
That would be silly, and I sure wouldn’t do it.
He and Junior might be able to sit down and negotiate some compromise between those two scenarios, but the idea that he would walk away with some chump-sum payment and nothing else is worth an eye roll.
@@priestesslucy3299How 🤷🏾♂️its their Business
Translation: “my dad started and built a successful business. How can I benefit from it more than him by doing less work and assuming less risk than my dad did, while also not allowing my dad to benefit from his own work anymore?”
You really need to watch the video again and actually listen
I love how this guy rides on his dad’s back, claims to own HIS DAD’S company, and calls Dave Ramsey to whine
exactly
I mean this guy definitely needed Dave’s advice and help with a plan. He owns 49% and operates the business without his dad’s help. I think he’s allowed to voice these concerns. Daves advice was great.
Sounds like they both started this business together. My bet is the dad put up more, or all the starting capital and got the controlling interest.
@@getinthespace7715 or the son has been using his earnings to buy ownership share off his father and dad cut him off at 49%
Or they both put in roughly equal money to start it 15 years ago, dad may or may not have contributed a little more, but dad said he needed 51% ownership and the son trusted him.
His depth really showed up…
Their accounting is screwy
The guy is basically working for no wage/ salary! He should get a wage for his work, then whatever is left after all wages and expenses, utilities , etc. are paid is split 49/ 51. The father is taking half of the sons wages without doing any work!
Stay home. Collect 49% of the profit. Start your own business. That 49% will fall apart without someone running the business, so dad will need to hire a CEO or somehow negotiate you staying.
Or his dad hires a CEO who will run better business for a salary giving the father 100% of owner’s distribution. He probably knows that he is replaceable.
@@Ast151 And then the son files a lawsuit over being denied the 49% of the profits he is owed
His father owns 51% of the business. I'm sorry but that makes it HIS company, now the $20k per month is it salary or dividends? If salary then you can have ground to cut him off for not working there any more. But as majority share holder he could override it and remain in CEO position, so have to talk him into giving up the position and settle for the dividends, or sell off your share and set out on your own.
Dude, your father doesn't want to sell to you. There may be a good reason why.
During entire conversation never once does either speak of who built the business or how the son got minority ownership.
Did you miss the first minute?
Consultant once told me when i was working for my dad and grandfather that fam businesses can be snake pits. I understood what he was saying, long story after rain..
you trying to get more out of your dad. Shameful AF
I lived through this, 3 generation business. I'm the third one. The only way we got rid of the older generation was when they died. Needless to say my kids weren't allowed to enter the business.
Just don't complain when you're 80 and your kids don't want to take up the family trade.
@@GeneralChangFromDanang the business will be closed when I'm 60. It'll be a good day
How do most of you guys still make profit, even with the downturn of the economy and ever increasing life standards.
Well, I picked the challenge to put my finances in order. Then I invested in cryptocurrency, stocks, through the assistance of my discretionary fund manager
Mrs Nancy Williams Laplace
This is correct, Nancy's strategy has normalized winning trades for me also and it’s a huge milestone for me looking back to how it all started..
Nancy is considered a key Crypto Strategist with one of the best copy Trading Portfolios and also very active in the cryptocurrency space.
I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $21k passively by just investing through an advisor, and I don't have to do much work. Inflation or no inflation, my finances remain secure. So I really don't blame people who panic.
Ramsey gives bad advice here because he doesn't ask enough questions: who started the company, who invested the money, who had the expertise, who built it? What form the payments take is just semantics.
Doesn't matter
The father needs to fire the son please .
'We call this manoeuvre the reverse Logan Roy... and by the way,... do you think I look like Brian Cox...?'
So your dad started and blossomed the company that is giving you an insane yearly income... And you're probably going to inherit his half of the business one day. And that's not good enough?
Bascially wants the inheritance while the dad is here. Wow.
I would hate working for somebody like this. Ungrateful spoiled son.
Wouldn't surprise me if the dad is keeping control of the business because he knows his son can't be trusted to completely run it.
I’d start a new business and leave my dad out of it
Father should boot the son and find an employee that will do the same thing the son does less for less money
The son owns 49%. And he and dad have both been taking 20k a month. He’s entitled to 49% of the profit whether he works there or not.
The problem is that his role as CEO should have its own salary. Which means he should get the CEO salary + 49% of the profits.
If dad fired him as CEO, dad would have to pay someone else to run the business on top of the 49% the son would still be getting.
@@ThePolarcub The real problem is he wants to buy his dad out, as dad, would you be inclined to sell ownership to a son who is too stupid to draw a salary and therefore becomes resentlful of dad?
Nailed it!
Why can’t you just be happy with your income, you probably net 10x more than most people.
The only problem I see is the father should not be getting pay, he should only be getting profits
Dad likes this arrangement. He won't do the deal.
"Quit riling him up. Quit whining." Classic Dave!