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Red Pill ExampleThe Dark Rule: How To Fuck Someone Over In Business (self.TheRedPill)

submitted by Endorsed ContributorClint_Redwood

Summary

This post is the second of two posts and is the ying to the yang of my other post, ”The Golden Rule: How To Not Get Fucked In Business”.

In TRP we teach from an amoral stance, as in, anything goes as far as discussion. In my first post I discussed how to play by the rules and protect yourself. In this post i’ll contrast the other perspective of the story. In the moral spectrum, the Golden rule is how to play morally correct. In the Dark rule, this is how you navigate as a machiavellian or immorally.

If you haven’t read ”The Golden Rule: How To Not Get Fucked In Business” then this post will have no context, go read it before continuing.


A year ago I attended a trade show with some business clients. It a great place to network, meet new people, review the latest and greatest technologies in my industry and scout out any new potential business partners or investment ideas. I’ve been the President of my division for 10 years and in the trade for 30. I know a lot of these people and everyone is familiar with me. Quite a few of my vendors and customers are in attendance too.

This is where i met Kevin. Kevin was a young and eager guy brand new to the business. He was working for another company that brought him along. This is his first trade show and only knows the guys in his company. We got to talking about how he isn’t quite satisfied with his current work. He tells me he’s about to graduate college and his plan is to become self sufficient and to start his own company upon graduation. We talk about a lot of things through the day and generally hit it off really well. He tells me about his new wife and that they are expecting soon. He shows me pictures and how she is taking a few years off of her nursing career to raise the kid. They still don’t know the sex yet. I hand Kevin a business card and tell him that I may have a job opportunity that he fits the bill for. It’s still in the works and I can’t give much details at this time but I’ll contact him in a few months to see if he’d be interested in working together. Kevin seems really receptive to the idea.

During this show I also met a guy named Tim. Tim’s seems to have a level head and has been in the trade a few years. He started his own company about a year ago and has been working tirelessly to secure new accounts and build his business. His plan is to cast his net as far and wide as he can. He has a very specific niche in the market and is trying to claim as much work from it as he can before other companies move in to compete. I hand him a card and let him know I might be interested in working with his company on a job. It’s not set in stone but expect to hear something a few months from now.

A few months later I call both men. I give it to them straight and quick. We are projecting to be spending a million a year on this work. Our first order of the year will be 100k purchase order.

Tim already has a lot of work on his plate. He’s opening and closing orders every month. He’s got a good grasp of his income to expense every month and how much money he has back for growth and improvement in the company. He can accurately project how much money this work will take to start this new contract. He analyzes the numbers and realizes that in order to take on a new customer with this amount of work, it would put him in the red. He would have to front the money initially to kickstart the work. on top of that, his yearly sales is already projected at around 1 million. An extra million would put this new work to at roughly 50% of his total sales for the year.

He concludes It’s too much to risk at this time. The money it would take to start is a risk he can’t afford to take. he calls back and lets me know that he will have to regretfully reject my offer as his company isn’t to the point of taking on such a large amount of work. He tells me however, if my company can front the initial cost for the startup, he can pay it back with some interest.

I let him know we will take that under consideration for who we choose to do contract.

Kevin on the other hand has graduated from school and is already lined out a building for purchase and working with the banks on some startup loans. He’s been working with a few others in the industry trying to secure some work so that the banks will finalize his business plan and give him the go ahead on the loan.

He tells me that he is the man for the job and would love for my company to be his first customer. If I’m able to give him a month to finish with the banks. He will need some paperwork from me to finalize for the bank. I let him know I’ll get back to him.


At this point I have two options. I can go with Tim who has proven to be a businessman that knows what he’s doing. But, if i go with Tim my company must front the startup cost. Accounting doesn’t like that. I don’t like that as my bonus is based off of my performance and how much money I can save the company.

On the other hand I have Kevin, a very eager go getter that is willing to start the contract with no up front money required from me. My risk from him isn’t money but a lack of reputation. Kevin may fail or produce subpar results. However I weigh the risks and this particular contract isn’t extremely technical. Kevin seems capable and I don’t question his drive.

Kevin gets the contract


Halfway through my vacation in the Rockies I get a call from my purchasing office. ”Mr. Redwood, Misogynist Inc. has just filed bankruptcy. They were 58 million dollar in sales for us and our most profitable account.”

”Fuck. Fuck. Fuck. FUCK.”

“I’m going to have to downsize somewhere. I need to call accounting, how much money do we have back to weather this setback? How far out are out payables? Who do we owe the most to right now and how far out are they? Shit, they are already past net 45. We are going to tighten up and hold a few checks from our other customers. We can’t afford to lose our second biggest customer and we can’t let our main vendor freeze our account or we are dead in the water.”

I get back to the office and my secretary tells me Kevin has finished the work and I need to inspect it to approve of the check. I don’t have time for this shit, we just lost our biggest customer. Send my nephew Gronk over to check it out. Don’t send the check though.

A week later my secretary gets a call from Kevin. Shit, he’s wanting his money. I like the guy but I’m looking at losing my job and so is the 2,500 employees if I don’t handle this lose of 58 million in work. ”What are the chances of him taking us to court over this and it’s impact on my company's reputation?” Let's see, he just graduated college, he’s got debt from that. His wife just had a baby and is unemployed, he obviously has a bit of money or he couldn’t have started the business and fronted the money for materials. Whether he took a mortgage out or had money saved doesn’t really matter. I know for a fact that I’m his only customer right now. Since he is a brand new start up and been in the industry less than a year he will have very few contacts so the hit on our reputation will be minimal.

On the opposite end of the spectrum I owe my second biggest vendor around 5 million in payables and am out 45 day on the last PO to them. They’ve been in business for 30 years and have their own legal team, netting around 120 million a year. If I don’t pay them they will freeze my account and sell me no materials for any of the other contracts I have. My company will effectively be rendered useless.

Hmm, which company do I pay?


Lessons Learned

I bet you thought this was going to be a story of some scumbag CEO that fucked over a little guy. Sometimes that can be the case. I have seen just generally shitty people take advantage of the naive. But that’s a narrative everyone and their mother has heard. The Evil corporation fucks over the little guy.

That tried and true scenario of Good Vs. Evil is great for movies like Star Wars but business is rarely that black and white. As an owner, you will have to make tough decisions. You will have to do thing you don’t want to do. You will have to decide who gets to take home a check and provide for their family and who has to get fired. In this case an employee didn’t get fired, some guy that started a business and failed got fired.

If you are a good businessman, you can foresee these thing before they happen and take measures to avoid risks like this. Tim saw it. Kevin and I didn’t. I was too busy having fun in the Rockies and didn’t realize one of our biggest customers was in trouble nor did I take any action to prevent them from becoming a large chunk of our sales. Subsequently my company suffered and in Kevin’s case, he got his first taste of capitalism.

Machiavellian Review

But I promised you a machiavellian analysis of this situations. A dark triad review, so here it is.

you can use this knowledge for immoral purposes. If you have the wealth, power or influence, you can fuck guys like Kevin over all day every day and there is little to nothing they could do. The more in debt they are, the more you own them. The more money you dangle in front of them, the more you entice them to spend and invest more on you, the more you own them. The less revenue streams they have, the more you own them.

I’ve seen guys like this. They jump from job to job conning guys out of their money. Hell, some of them are so good they can cross industries and still make a killing. But, once you burn a bridge in this manner, you knock over the tanker truck that was driving across it. Producing an oil spill that lights and floats down river.

You should know the consequences of taking the immoral path though. Not just the legal ones, that’s obvious, prison and fines out the ass if you get caught.

The Consequences of The Dark Path

The oil spill is word of mouth. People talk. Industries and business owners know each other. Just like you know you’re coworkers, businessmen know businessmen. If someone fucks over one of my customer or vendors, I know about it in less than a week usually.

When a new customer comes looking to do business with my company i ask them, ”Who have you worked with before?” Then I call that company, a lot of times i know the company. I ask about their quality of work, their business practices, and straight up, ”Is this someone you will continue to do business with?” I vet my customer just like i vet bitches. I gather as much knowledge as I can so I understand myself and my enemy.

If you fuck someone over, don’t plan on it being a career path. Eventually you will build a reputation and no one will work with you. Or you will be in prison, or fuck over the wrong guy and he kills you. You fuck with a man's livelihood or take everything he possesses and he will have nothing to live for. Yes, it does happen.

You may find the odd schmuck to fuck over, you may be able to move locations and start again. But eventually guys like this don’t last.

My personal opinion, if you want a successful business. Be like Tim, it is sustainable, safe and legal. Build your company slow and steady and don’t over reach your capacity. It’s better to take a ton of small risk than one giant one. Tim’s business model isn’t just safe, it’s scalable. As each one of his contracts grows, those customers will give him more and more work, building upon a great business to business relation. It doesn’t matter if a company pays you 32 million a year in work or 30k a year. The only thing that matters is if that 30k is 10% or more of your total sales.

Good and long time customers can still fuck you over though. I knew a customer that got fucked by a company that did work with them for 20 years. The owner was in his 60’s, my customer told me the old guy was a great businessman and well respected. But the old man had other plans. He was close to 70 and was done, he wanted out.

So he contacted all his vendors, ordered as much shit as he could from all of them. Liquidated it all, didn’t pay any of his vendors a dime and moved to South America. I believe he made off with 350k+.

His justification? He said it was his retirement and he earned it for all his years of work.

How’s that for a hamster.


edit:

Apparently a lot of you are missing the main point of Post #2. This actually isn't a post on how to go dark triad on some motherfucker. It's actually written exactly to do the opposite, denture you as it isn't a sustainable lifestyle in modern day capitalistic society.

Here was my thought process coming into this second article.

Upon sitting down to write this second article I wanted to take the stance of an evil CEO that's going to fuck over Kevin. As, if you read just the first article, that is exactly what it looks like. I purposefully left the first article open as to the intention of the CEO that fucked Kevin. This is because it's a common belief due to our culture and media(holleywood) that CEO's and corporations are inherently evil. Now for anyone that actually had business experience, you know this isn't reality. A lot of times CEO's and corps aren't evil, they are just protecting themselves and minimizing damage(like the 58mil client filing bankruptcy). But, for movies and holleywood, you need a clear, bad guy vs good guy or evil vs good as it makes a great movie, but it is not how reality is. I was aware of this stigma upon writing.

Through the second article you see that in fact the CEO isn't a shitbag, he's just a guy trying to protect his company and employees. He has a tough decision to make and from this line, "Hmm, which company do I pay?" you as the reader decide the action to take. I purposefully left it open as there is no true right or wrong answer. You just have to decide as the owner which is the greater risk, pay Kevin and try to manage paying your vendors or cut Kevin and hope for the best.

Business is rarely as black and white as you see in movies.

As for the dark triad review. It is actually written to denture you from following that path as in the modern day with online records and reviews, it is rarely a sustainable career choice. I wrote it so you understand that fucking people over in business sounds like a great revenge fantasy or some power trip, but in actuality, you will end up getting burnt or in prison in the long run. I even personally give my opinion and stance on the subject,

"My personal opinion, if you want a successful business. Be like Tim"

I understood coming into this article that a lot of guys won't have any real world experience with business to business relations or they will come with the cultural stigma of an evil CEO/corp. This entire article was written for you and to give you the plot twist and perspective that sometimes it isn't that black and white.

When you learn and understand the multiple perspectives you can have on any aspect in life, you can better understand the game we play. This article was written with the intent to give you multiple perspectives instead of the tried and true "Evil Corp fucks over little guy."

Some of you stated that this sounds like Horrible boss's 2 plot. Haven't seen it but I'm guessing the boss is some shitbag owner or CEO. This article was intended to give you the exact opposite perspective of a shitbag CEO and to understand, sometimes business isn't that black and white. Again, it makes a great movie, but it isn't reality.


[–]memphisjohn 83 points84 points  (9 children)

Great example. I knew a guy who made really great money selling supplies to the US oil drilling industry... "made" as in past tense.

We all know what happened to oil prices, can you guess what happened to my buddy's accounts receivables when all of those drillers suddenly couldn't make a profit? Yep, he got nothing. Nada. Zilch. Overnight, that entire industry turned into a rapid game of musical chairs (except instead of chairs, you're holding unpaid invoices), and you don't want to be the last guy holding an unpaid invoice when the music stops.

[–]Endorsed ContributorClint_Redwood[S] 31 points32 points  (2 children)

Lol spot fucking on analogy.

[–][deleted]  (1 child)

[deleted]

    [–]Endorsed ContributorClint_Redwood[S] 3 points4 points  (0 children)

    I really enjoy teaching, just a matter of $.

    I always thought being a consultant would be rough though. We have had a lot of "business Consultants" come through our door trying to sell their services. Usually they are gone within 5 minutes. It's hard to try and sell to someone how they should run their business that's already up and running well.

    PM me your idea though

    [–]Freiling 5 points6 points  (5 children)

    No shit! There are already entire ghost towns in the Eagle Ford Shale (TX) since the price dip. Lots of trucks for sale, though!

    [–]wanderer779 4 points5 points  (4 children)

    think there's an opportunity buying trucks and selling them elsewhere?

    I thought about trying this with hay back when there was a drought down south. Some people did it.

    [–][deleted] 4 points5 points  (0 children)

    A couple of years ago there was a butter shortage in Norway. People got caught for smuggling it in from Sweden, which I find hilarious. Supply and demand

    [–]Freiling 1 point2 points  (0 children)

    They went fast, when the oil workers lost their hours. I can't imagine cheap trucks lasted long in Texas

    [–]Seducibledotcom 0 points1 point  (1 child)

    If you're serious about this I'm also interested in it. I want to buy a cheap, reliable truck and hire drivers to drive for me, kind of like a small trucking company. Maybe we should get in touch?

    [–]wanderer779 0 points1 point  (0 children)

    what are you talking about? You mean you want to get a car hauler and transport trucks?

    [–][deleted] 86 points87 points  (22 children)

    As a lawyer, I love representing guys like Kevin when i sue companies like yours. Mind you I prefer for there to be an arbitration clause in the contract as that makes far easier....for me (the client is fucked).

    If you are getting into business guys, make sure there is an arbitration clause in the contract if there is a limitation of liability clause as well. Also ask if the contractor has suretys that they have for the work. Also look into getting bonds for yourself if possible, which lets the bond company pursue those who owe you money.

    And get to know a lawyer so you know how to preserve causes of action like Account Stated or Open Account, and so you don't do work without a proper Change Request or Change Order. My business administration clients avoid getting fucked like Kevin quite regularly because of me. Do they still get fucked some, oh yeah, but they don't fucked as hard or as bad.

    Remember when you are in business, people will fuck you if they can or if it serves their bottom line. I know this because I help a number of large businesses fuck small guys out of money quite regularly to where the little guys are settling for fifty to sixty cents on the dollar owed to them per the contract. This lets the contractors pad their profit margins quite nicely and underbid their competition.

    It's why I'm glad I'm not in "business" and instead work with Trusts, sell annuities, sell insurance and have my little side gigs here and there while I work on building more and more investment Trusts.

    [–]Endorsed ContributorClint_Redwood[S] 20 points21 points  (12 children)

    This is great advice for small and medium size business but is this really financially feasible for small startups or single entrepreneurship?

    What kind of cost do these things run? What is the cost per contract? Is it's a large sum initially then a much lower cost per contract?

    I work in a field where we take our customers word and little to no legal documentation. We get fucked but rarely as we do hold some power over customers if they wish to continue to do business with us. We rarely need the use for legal docs and if a contract requires it we usually deny it out of merit that if it requires documentation, it's probably not to protect us. I ask only cause I'm mostly ignorant of the legal course of action. I prefer to take action before it enters a court.

    [–][deleted] 20 points21 points  (9 children)

    My business administration practice is relatively small. I've got fourteen small businesses (four or more employees not including independent contractors), two medium sized (fifty or more I consider medium) and bunch of startups who come and go (a few have made it to the small business side).

    Costs are costs, the question is whether or not you get value out of it and most people don't understand or appreciate value. I can't tell you how many startups I've had to walk out on because they were too small and too under-financed to be bothered with.

    The latest example I can give was for residential HVAC installers. I drew up the in-house financing agreement, made sure the client got the appropriate license, and found a factoring company that would front the money for a steep cut of the action (high risk for them) after their legal department looked over the contracts I drew up for in-house financing (people basically execute a loan on their homes). The sophistication of the work involved cost the client $5,000 and he tried to dicker with me and I walked away, a few weeks later he had a cashier's check for me.

    But for the big boys, from my client's side, I draw up very basic contracts that hold the breaching party responsible, allow for recovery of attorneys fees, and have an arbitration clause. It has surprised me how many large businesses and medium sized businesses don't have contracts for work. The cost per contract is about thousand dollars per contract (I keep up-to-date on the law), and I charge my clients a monthly fee to review email communications with the other party (and draft emails when necessary to protect the client).

    A lot of time though, the big boy has a client. When a business doesn't use contracts, I make sure there is an email for communication. If there is no email, then don't do business in my opinion. If they can't come up with an email then they should never be trusted. Most competent and large companies have emails.

    If a company doesn't want to sign a contract and doesn't have an email for you to communicate with them with. Then it's a bad idea to do business with them as you will have little chance to protect yourself.

    [–][deleted] 1 point2 points  (1 child)

    I make sure there is an email for communication.

    I'm sorry, do you mean a specific email account that all correspondence regarding a project is CC'd to? Your word choice is throwing me a bit.

    [–][deleted] 1 point2 points  (0 children)

    Fair enough. Essentially yes, a specific email account with the company's name in the email (no gmail accounts). You don't have to CC the emails to that account, just maintain a history of those emails. For instance I backup all my emails once a week and auto archive everyday for my Microsoft Outlook, I also forward received emails to a private email like yahoo or gmail just to have another back-up.

    You don't want every communication to be by phone and when you have communications by phone you want to email the person you talked to or the person in charge letting them know what is happening an for them to protest or tell you not to go forward.

    One case I arbitrated last year was very simple and was for an admin client of mine. The respondent/defendant started deviating from the MSA quite quickly and their people on the ground kept making verbal demands without proper change orders/requests or other written requests so I start drafting emails for my client to send to the party letting them know what was going on and that they expected to get paid and how much they expected to get paid, and when the work was done how much they were owed.

    The defendant/respondent's people never responded to those emails and never protested the work even though they were given the opportunity. And thus I had a great case for a number of causes of action like unjust enrichment, open account, and account stated to name a few.

    [–]malariasucks 1 point2 points  (4 children)

    I wish I had the patience for law school. I took a lot of courses and even taught a low level business law course, but I don't think I could stomach the cost and time of getting a law degree

    [–]Squeezymypenisy 0 points1 point  (1 child)

    Also remember that grades are based on if you did better than the people next to you and wrote how the professor wanted. Its not like undergrad. If you will have over 6 figures of debt I wouldn't go.

    [–]malariasucks 0 points1 point  (0 children)

    ya I'm not seriously considering it anymore. I got an MBA a few years ago and it's not really paying off so far, though that can change. I also started a family, so I want to focus on new skills rather than slaving away at a new degree

    [–]TheInkerman 1 point2 points  (0 children)

    I've done a law degree in both Australia and the US (although neither were a J.D.). Law degrees are fantastic for teaching you how to think. How to analyse a problem, and (usually) how to find a creative solution. They also give a basic understanding of government laws, rules, and regulations. You understand how such rules work, even if you can't remember the rules themselves. You'll also usually pick up some good contracts/business law information, as well as your criminal law rights.

    Having said all that; don't do law.

    The degree will give you great skills. It is unlikely to directly improve your life vis a vis career. You study a shit tonne, and as the other commenter said, it's still a crapshoot about your actual score at the end of the day. One semester I did basically no study; got C's and D's. Next semester I studied at least 5 hours a day, for two weeks before the final exams. Got C's and D's. Came to the US. Did fuck all study, B's and a VERY high A. Next semester, studied a fair bit; C's and B's. Literally no idea why I scored high sometimes and didn't others. What's more I can't remember shit about what I actually studied. It taught me important lessons about thinking and recognising legal risk, but the information is gone.

    [–]rpscrote 0 points1 point  (0 children)

    i do contracts and admin for software so I can't comment on the construction side stuff, but for the stuff w/ overlap I couldn't agree more. Great post.

    [–][deleted] 1 point2 points  (0 children)

    This is great advice for small and medium size business but is this really financially feasible for small startups or single entrepreneurship?

    It's a hell of a lot cheaper to hire a lawyer to prevent problems than to hire a team of lawyers to fix problems. But it's true, the biggest hurdle for the startups is that every dollar is precious. Only you can decide if it's worth the risk at first, but as soon as you get successful and have some income, lawyer up.

    What kind of cost do these things run? What is the cost per contract? Is it's a large sum initially then a much lower cost per contract?

    It depends. You'll hear that phrase a lot if you lawyer up. But aside from a template contract that you can use over and over, you'll want a lawyer's personal attention for certain contracts, especially big or unique ones. The best way to solve a problem is always with a handshake and trust, but an ounce of prevention early on can make that handshake solution more likely to happen. Get an arbitration clause and, if at all possible, liquidated damages (the latter will require that you do some homework for your attorney).

    I work in a field where we take our customers word and little to no legal documentation.

    You know your field better than I could. A good contract prevents lawsuits rather than creating them. If it's more cost-effective to get fucked once in a while, go for it - just be sure you're taking into account all the risks of the business, not just the risk you won't get paid.

    [–]rpscrote 0 points1 point  (0 children)

    I work in a field where we take our customers word and little to no legal documentation. We get fucked but rarely as we do hold some power over customers if they wish to continue to do business with us. We rarely need the use for legal docs and if a contract requires it we usually deny it out of merit that if it requires documentation, it's probably not to protect us. I ask only cause I'm mostly ignorant of the legal course of action. I prefer to take action before it enters a court.

    IMO the order of preference is 1. resolve via goodwill, 2. resolve via leverage, 3. resolve via threatened or real legal action, 4. lie down and take it, salvaging what you can.

    The problem is that lots of people run on no documentation, setting themselves up to get fucked in a legal battle because they overestimated their goodwill or leverage and were left with nothing at the end.

    Typing some terms on the back of your POs is a pretty simple and easy step to help your position in potential legal battles (e.g. get some terms contested/dropped via UCC knockout rule)

    [–]meanwhile_in_SC 3 points4 points  (1 child)

    Young lawyer here - I enjoyed your write up thanks for that. I took construction law in school and found it very interesting and I enjoyed it a lot. Hope to get back to it some day but my practice now is way different. Thanks for bringing me back to class for a minute. Good info.

    [–][deleted] 2 points3 points  (0 children)

    Construction law is my favorite after estate planning. Criminal can be thrilling when it comes to motions and depositions (sometimes trials), but family law is a major PITA. Personal Injury can be great if you get good employees and partners but doing it on your own can be life draining.

    Construction law for me, where there is an arbitration clause, or the client had me handling their admin from the beginning, is incredibly profitable. You just have to accept that it's about money and not making clients whole. You can get them a lot but you can't get them everything they need.

    Now appellate practice, appellate practice can be big money and lots of intellectual fun, unless the attorney in the lower court completely buggered the case.

    [–]geppetto123 0 points1 point  (1 child)

    Also look into getting bonds for yourself

    So how would this look like? I know only the side where you buy bonds, so you buy a few bonds (one each) on the companies name or is it something completely different we are talking here?

    [–]Ripred019 0 points1 point  (0 children)

    My understanding is that a bond is a lot like a loan. As a company, you could issue bonds that someone else buys. You promise to pay them back with interest after a certain amount of time. If you go bankrupt and your assets get liquidated, bond holders get money back before equity holders, if there's any equity left by the end.

    I have very superficial knowledge of this so I'm probably leaving out a ton and anyone who knows more should correct me.

    [–]Seducibledotcom 0 points1 point  (1 child)

    If someone has no money to pay you or assets, what is the point of suing them?

    [–][deleted] 0 points1 point  (0 children)

    If they aren't collectible, that is certainly an issue. If they are collectible, that's another.

    [–][deleted] 18 points19 points  (2 children)

    I wonder if others see the corollary between that, and a thirsty male who puts a woman on a pedestal.

    I often say, it's only the greedy and desperate that get conned. OPS example had a guy put himself into desperation over his greed

    [–]Leviticus59 9 points10 points  (0 children)

    That was my first thought- contract one-itis.

    [–][deleted] 7 points8 points  (0 children)

    You don't put your customer on a pedestal. You should always be selling.

    [–][deleted] 13 points14 points  (1 child)

    I bet you thought this was going to be a story of some scumbag CEO that fucked over a little guy.

    Yup, great way of presenting the idea with two threads.

    You should know the consequences of taking the immoral path though. Not just the legal ones, that’s obvious, prison and fines out the ass if you get caught.

    A very real possible consequence is Kevin flipping out that you ruined his life and waiting for you in the carpark one night and just shooting you.

    It's not like going to prison would make his life any worse so why would he not do this? The oldest form of justice is revenge.

    [–]Philhelm 2 points3 points  (0 children)

    I think that some people cannot comprehend the lengths that other people would go to in order to exact revenge.

    [–]human_lament 17 points18 points  (4 children)

    The truth here is Kevin didn't get fucked over, his creditors / banks got fucked over... Kevin can file bankruptcy and rebuild, and learn from this lesson.

    But if Kevin was smart at all, he wouldn't have fallen into this trap.

    [–][deleted] 3 points4 points  (1 child)

    doesn't that depend on how its incorporated? Does a proprietorship's bankruptcy impact the principal?

    [–]human_lament 5 points6 points  (0 children)

    In a situation like this, the owner with no business credit background would probably have to personally guarantee the corporate debt in order to obtain financing. So yes it could be dependent on how it's incorporated, but most likely as a new business it won't be able to obtain on its own.

    [–]Eugenics2015 4 points5 points  (1 child)

    This 100%. Thats what makes America so great

    [–]rpscrote 2 points3 points  (0 children)

    provided of course Kevin was smart enough to have a properly capitalized (+ didn't intermingle, abides formalities, etc. so no veil piercing) LLC/Corp so that his personal assets aren't on the line. And for a guy who isnt using a contract, this part is doubtful.

    [–]Freiling 26 points27 points  (9 children)

    From your previous post:

    I’m 25, I’ve been doing what i do for 10 years, I’ve seen it happen twice. My father has seen it happen more time than he can count and so have many others that I have been mentored by.

    From this post:

    I’ve been the President of my division for 10 years and in the trade for 30.

    Am I misreading something?

    [–]Endorsed ContributorClint_Redwood[S] 15 points16 points  (3 children)

    main post was a fake narrative based on real world experience. I distance my TRP writing because of SJW. This stuff happens, just this particular story is just a representation of what I see. I also can't name company's for legal reasons.

    [–]Freiling 6 points7 points  (2 children)

    I don't think the details added anything to the story to begin with... why bother adding them, real or fake?

    [–]Endorsed ContributorClint_Redwood[S] 2 points3 points  (1 child)

    It has more context in the second post. It's small facts that add up later in analysis when you go through all the pitfalls of Kevin with a fin tooth comb. I also wanted to build a image of a successful businessman that most would trust as life rarely follows the black and white narrative of Good guy Vs evil corporate CEO.

    [–]Freiling 10 points11 points  (0 children)

    I read both posts, and I know what you're referring to. But your age has zero bearing on the story, that's what I'm saying.

    [–]bebestman 7 points8 points  (4 children)

    He wants to preserve his anonymity, so he misleads. The story remains relevant either way.

    [–]Freiling 0 points1 point  (3 children)

    There are enough details in these two posts to figure out exactly who he is.

    [–]bebestman 4 points5 points  (2 children)

    Assuming any of them are true.

    [–][deleted] 21 points22 points  (0 children)

    Let's dispel this notion that /u/Clint_Redwood doesn't know what he's doing, he knows exactly what he's doing.

    [–][deleted] 0 points1 point  (0 children)

    Hypotheticals, they're called.

    [–]TRP VanguardWhisper 5 points6 points  (0 children)

    Everyone knows you need to diversify your investments. But not every one realizes that this applies to any source of income, including customers.

    You're a lot better off having hordes of tiny accounts than one giant one.

    [–][deleted] 1 point2 points  (0 children)

    OP made this all up and is full of shit

    [–]Barely_Intrepid 23 points24 points  (27 children)

    Are you fucking kidding me? This would be a cut and dry contract dispute. A first year law student could take you to the cleaner and Kevin would retire at age 25.

    Who goes on vacation while their main client is going under....bankruptcies don't just happen.

    Nice creative writing project though.

    [–]Endorsed ContributorClint_Redwood[S] 26 points27 points  (21 children)

    Who goes on vacation while their main client is going under....bankruptcies don't just happen.

    Clients will not tell you they are going under. The the best way for a company to insure it's collapse is to tell everyone it's about to collapse. Telling anyone outside of top tier management you are in financial trouble is the stupidest thing you could ever do as a business owner. All of your clients and vendors will jump ship before you sink. Vendors would freeze your accounts for fear of nonpayment and clients will quickly scramble to find more stable company's than yours. Ever watched a false claim of financial trouble and it's effects on it's stock prices? or a bad quarterly report and stock prices. Everyone jump ship like it's the fucking Titanic.

    But you keep telling me how business is done.

    [–]Barely_Intrepid 22 points23 points  (20 children)

    Clearly I can't argue with someone with 30 years experience as an executive....or are you 25? u/Freiling kinda called you out.

    Every public company has easily accessible quarterly financial statements in their investor relations page. Thanks to Enron, these are prepared by a third party firm. You legally cannot hide financial trouble. Unless you're fucking around w/ hedge funds, no industry is floating on the kind of leverage to generate such sudden collapse. Futures and insurance.......billions are spent to mitigate these risks.

    Assuming this did occur. Whomever was in charge of managing your company's risk has been taken out back and shot, and you've just fucked over the little guy instead of taking a hit w/ cost of capital either through asset liquidation, bridge loans, or whatever. You made the glorious decision to unabashedly violate the golden rule of business, pay what you owe. Blood is in the water, the sharks start swarming.

    Firms with names like Lebowitz, Goldberg, and Bergblatstein are now banging down the doors of Kevin and every other contractor and client you've done business with in the last ten years. No, poor Kevin can't afford a retainer for a drawn out legal battle, but these guys can.

    They politely explain to Kevin that they will helpfully buy this unpaid contract for its full value. This conversation is repeated with every client you've ever had. That oil spill is now on fire. At this point, you're either in Ch.11, or cash in hand begging Kev to accept any and all arrears. Based on your "fuck em" attitude, you have just entered litigation hell and will very likely be liable for every penny you've ever owed plus interest and fees (of course!). Every income statement/contract/filing will be scoured over for any irregularities.

    Based on your initial description, this business is not exactly liquid. Liebowitz and his merry band proceed to cannibalize your former company. Pray to God you're not personally liable.

    Bankruptcy exists to protect people from the above process. Contracts exist so you can't fuck over your business partners, so people have confidence that their contracts will be honored, thus increasing investor confidence....get it?

    I mean, fuck man. You're either a 50 something executive saying things like "dark-triad", "I vet my customer just like i vet bitches", and "know the consequences of the immoral path".......lolwtf? or you're an idiot LARPing. I honestly don't know which is worse.

    [–]cynicalprick01 8 points9 points  (10 children)

    I couldnt get through the whole article OP posted.

    It just seemed to unrealistic, like something I would read in fiction literature.

    I just find it sad that some people have the gall to post this shit in a serious and non mocking manner.

    like, i knew TRP had gone down hill, but rly?

    [–]Endorsed ContributorClint_Redwood[S] 3 points4 points  (1 child)

    Don't take my word for it then. Read the comments, plenty of people coming out and stating they see the exact same thing in multiple industries across all fields.

    Human shitbaggery is universal, just like women's nature.

    [–]cynicalprick01 0 points1 point  (0 children)

    appeal to popularity eh.

    that is a logical fallacy and usually not used by people possessing a strong argument to begin with.

    [–][deleted] 3 points4 points  (6 children)

    Dude of course it's unrealistic, it is hypothetical situation condensed to the essentials to prove a point.

    Would a 100 page post, detailing each specific phone call Kevin made to utility companies asking for payment deferral be of any fucking use to OP's point?

    It was really simple: Just because contract law/arbitration might be on your side, doesn't mean you don't need resources to utilize it, and people in business know that. Legal costs, time to find a lawyer, time and effort to keep up with the proceedings, these are not fucking things that are abundant for a small business. What OP is saying makes total sense, there is a certain threshold where it simply does not make sense for the screwee to pursue the screwer, so don't allow people to exploit this threshold.

    None of you are bringing up any concrete disagreements other than "but muh law! das illegale!". People get hit by cabs in broad daylight and have to fight for years for settlement, and you think Jews Legal LLC is going to swarm in to help some little scrub who bit more than he could chew?

    /u/Barely_Intrepid 's post is in its entirety a justice boner stroke, picking at a single factor in the post, where the hypothetical big business is heading towards bankruptcy. What if they aren't? What if it's just a strong business with good legal connections, but not a multinational? You know like most businesses out there today? It doesn't require a catastrophe for a business to fuck you over, nor does it require bad intentions. If you're counting on some ACLU-style legal revenge story to get your money back you're fucking delusional.

    [–]cynicalprick01 0 points1 point  (4 children)

    Dude of course it's unrealistic, it is hypothetical situation condensed to the essentials to prove a point.

    then forgive me if I dont take it seriously.

    If i wanted a piece of fiction to read, I could make much more valuable choices than reading OP's story

    we all know fucked up shit does happen in the world, and we dont need a piece of fiction to prove this point. its just patronizing.

    seriously, If i wanted to learn the exact same thing OP is trying to preach, I could just go watch a shitty comedy like horrible bosses.

    edit: oh, you're a one month account on TRP trying to advocate shit. you are just as pathetic as OP. Dude take a lot more time to implement TRP in your life and do a lot more personal work before you want to tell other people in this sub how life is. Youre like a kid who just landed his first kickflip but now thinks hes Tony Hawk.

    [–][deleted] 0 points1 point  (3 children)

    Except he is giving business advice, relevant to the goal of the sub, but the kind of advice one can give even without having been on TRP.

    As for my "one month" here, I've been browsing way longer and have changed accounts, sit down with your prying boy.

    If you don't want to read fiction then skip to the parts OP highlighted as the main points, rather than sitting here, bitching about this.

    [–]cynicalprick01 -1 points0 points  (2 children)

    um, it kinda has nothing to do with the goal of TRP.

    you were lurking for way longer, with for you was probably at most 3 months.

    well how about he present it as fiction so we would know to ignore it if we dont like fake stories.

    I honestly could not find the main points. I kept scrolling down and every paragraph was his little fictitious example.

    [–][deleted] 0 points1 point  (1 child)

    Well what's your threshold for contributions to be meaningful, sir, 5 months? Over 6?

    well how about he present it as fiction so we would know to ignore it if we dont like fake stories.

    Seems to me the issue is you take everything as literal on the internet. I understood that the only part that could be believe as true in OP's post is the fact that he has decent experience or access to individuals that offer insight. The rest were semantics.

    [–]cynicalprick01 0 points1 point  (0 children)

    it was a story that was presented as though it were true.

    meaning, it needs to rely on a cheesy gimmick from horror movies in order to gain appeal. I guarantee you that, if the post were presented as just a story from the start, it would not have gained nearly as much traction as it has.

    I would not tell you when you yourself should view TRP members as having meaningful stuff to contribute. I am just saying that your 1 month on your alt account trying to tell ppl what to do is funny to me and i cant take it seriously. my threshold is at least 3 months here on your alt before I take your advice remotely seriously. your lurking time doesnt really mean much to me, as you were probably really blue pill throughout it.

    [–]Barely_Intrepid 0 points1 point  (0 children)

    You sure you're replying to the right post? I never wrote any of that.

    [–]fag981 1 point2 points  (0 children)

    Fantastic chew out, bravo. Always good to see someone getting called out on their shit.

    [–]Endorsed ContributorClint_Redwood[S] 1 point2 points  (6 children)

    Clearly I can't argue with someone with 30 years experience as an executive....or are you 25? u/Freiling kinda called you out.

    I'm actually 25. I state it in the Op. I have grown up in a family that is pretty much all self driven or businessmen. I've been mentored by 4 men that have a combined experience of over 200 years of business. The company I work for was started by my grandfather 60-80 years ago.

    You can dismiss this merely because I'm 25 if you want but I've been conditioned for business since I was a little kid. My business educated started way before I was 15. Also, reading through the comments confirms this isn't BS. This happen across all industries in all fields. Human shitbaggery in a capitalistic society is universal just like woman's nature.

    I mean, fuck man. You're either a 50 something executive saying things like "dark-triad", "I vet my customer just like i vet bitches", and "know the consequences of the immoral path".......lolwtf? or you're an idiot LARPing. I honestly don't know which is worse.

    The main post is a fake narrative based off of real world experience of me playing the part of a supposedly shitbag CEO, as the stigma in America is that all corporations are Evil. I purposefully twisted it so readers could see that sometimes CEO's aren't shitbag evils guys, they are just looking out for their companies best interest. Sometimes shit just happens and it has a cascading effect down the money trail, like the 58 million client going under.

    The analysis of how Kevin and I fucked up is switched back to my real life view and analysis, not the 50 year old CEO.

    I purposefully keep it vague, misleading and plot twist so the reader wouldn't latch to anyone thing. It also helps for anonymity for SJWs. Plus it's hard to write a business advice piece that covers all industries and fields as a teaching in say IT could be completely inappropriate for someone working in construction. It's vague, long and twists for specific reasons.

    Edit I edited the main post to better articulate my thought process coming in to the second article and the points i was trying to convey.

    [–]Barely_Intrepid 7 points8 points  (2 children)

    .....dude.....seriously wtf?

    Nobody has ever cared about the age of some anonymous poster online. You lie about your age and experience for no reason, then double down, get called out, and now you're trying to explain your way out..... Would you take you seriously?

    It seems like you're taking this shit personally, stop. Nobody is born with inherent knowledge. If you are interested in this kind of thing funnel that energy into educating yourself.

    Learn about how Corporate Bankruptcy works. It's a long process in which creditors are compensated to the best of the company's ability. The $56 million you described is a financial asset that is often insured or otherwise secured.

    Cash flow, risk management, and unfunded allocations......read about them. Large firms have many options for securing capital that is essential to maintaining an even cash flow.

    There is something else called Fiduciary Responsibility, which legally obligates someone in the capacity of a corporate executive to act in the best interests of owners/shareholders. Attempting to default of liabilities is purposefully exposing your company to a massive quantifiable legal risk. You could be subject to a personal lawsuit from your shareholders for the damages caused by this irresponsibility. It's very simple, you don't fuck around with breach of contract litigation.

    The firm i mentioned in my counter example are PE firms known as vulture capital funds, the often use the legal system to leverage payment of all outstanding debts of dying companies. There are firms that specialize in targeting overexposed companies like the one in your example.

    These are the guys screwing over people in business, not your small-ball bullshit story. Your "Machiavellian"/"dark-triad" (seriously, don't ever say that) assholes do exist, but they exist in an complicated and profoundly boring world. If you want to do something evil, make it boring.

    [–]Endorsed ContributorClint_Redwood[S] 0 points1 point  (1 child)

    Cash flow, risk management

    Done this. I use to handle all payable and receivables by my company.

    Large firms have many options for securing capital

    I don't work for a large firm, which it sounds like you do. My advice is for guys starting out and small business practice.

    You lie about your age and experience for no reason, then double down, get called out, and now you're trying to explain your way out..... Would you take you seriously?

    I've never claimed to be anything other than a 25 year old working for a small family business. It's even stated in the OP? Sorry you can't deduct that from a narrative story where i even state after in the analysis that I'm 25.

    The firm i mentioned in my counter example are PE firms known as vulture capital funds, the often use the legal system to leverage payment of all outstanding debts of dying companies. There are firms that specialize in targeting overexposed companies like the one in your example.

    That's great for large companies. You think any one of those PE firms will bother with a small business of 1-10 employees when their owed invoices probably only equal around 10-50k?

    These are the guys screwing over people in business, not your small-ball bullshit story

    My entire article is for the small-ball startups. Write your own post on large company to company interactions if you want. I'm sure a lot of them don't already know this knowledge.

    [–]cynicalprick01 0 points1 point  (0 children)

    why should anyone take a 25 year old guy who works for his family seriously?

    like, you talk about all your family's experience as if it is your own. all you have shown is that you are anything but a self made man.

    quite the opposite, your current "success" was given to you because you were born into the right family.

    I really would like to know if you have any accomplishments that you made on your own at least 95%.

    PS: it really doesnt look good on you when you condescend to a person with obviously more experience in your own field than you possess by asserting that they have troubles with simple deduction. (especially when one of your "narratives" is you playing a 50 year old)

    [–]WrensPens 0 points1 point  (1 child)

    So is this actually true or more lies to confuse the scary SJWs that are trying to come after you? Lmao.

    [–]redpillavatar 2 points3 points  (3 children)

    1. Contract disputes are not simple.
    2. The costs of litigating the dispute can be higher than the contract cost because legal fees add up.
    3. Much contract management is not written down

    [–]Barely_Intrepid 3 points4 points  (2 children)

    1. No Shit

    2. No Shit

    3. Are we dealing with used-car salesmen or pubic companies and their clients? One of these are legally obligated to write these down. I'll let you guess which is dealing with $56 million in annual sales.

    [–][deleted] 0 points1 point  (0 children)

    What is your qualm here?

    Clearly you agree that just having the law on your side is by far not enough in the business world, especially when you are a small business/startup with limited capital, time, connections etc. but that's the whole damn point OP was trying to make...

    What's with the anti-skepticism here? The real question you have to ask is not only whether being screwed over by bigger, slimier dogs a possibility to account for, but also how easy it would be to achieve financial revenge in such a case. I'd say the answers go 1. Possible, likely depending on the industry 2. Extremely fucking unlikely.

    Like I responded to another person here, Big Name Legal won't jump in unless there is some massive scandal going on, but a massive scandal on the side is by far not a requirement for someone to screw you over, it's just the dramatic example OP picked.

    And by the way, the recession wouldn't have been a thing if business and law worked so justly for the middle class.

    [–]Endorsed ContributorClint_Redwood[S] -2 points-1 points  (0 children)

    Are we dealing with used-car salesmen or pubic companies and their clients? One of these are legally obligated to write these down. I'll let you guess which is dealing with $56 million in annual sales.

    We are dealing with a small start up being enticed by a large corporation to front a large risk upfront. It's a very common thing in my industry to see young and naive guy come in with hopes to hit it big off a huge contract, only to get burnt like Kevin did.

    [–][deleted] 0 points1 point  (0 children)

    Telling your associates, especially clients, that you are going under is how you create a small sale panic. The stigma alone of being someone with poor financial affairs will make people distrust how well you can conduct business, your best bet is to "save face" and see what you can recoup, at worst people should think there is some trouble with a few clients, not that your business is going to shit.

    [–][deleted] 8 points9 points  (1 child)

    Better to know about the cost of court defensively. If you do fuck with the wrong guy then a judge can really screw you over. A class action lawsuit, a wealthier client than you'd expect, or a guy willing to ruin his life to take you with him can find a judge who's in it for the little guy and wants to see you go down with punitive damages.

    [–]submitted_5_days_ago 7 points8 points  (12 children)

    You are talking about the Overt Dark Path.

    It's just too obvious it can't work. If your reputation is build on overt darkness how can it ever work?

    The Real Dark Path is to gain the advantages of playing by the Dark Rules whilst being perceived as the Light.

    High level abstract thinking, that's all you need.

    [–]fitnessacctasdf 13 points14 points  (9 children)

    Posts like this make me think that some people are really overthinking this whole 'get laid, enjoy life' thing.

    Like there's a Machiavellian view where you stop at nothing to destroy your enemy.

    So a bunch of guys on here are like 'yea, i'll destroy my enemies!'

    ... but there's no way they're putting in the effort to actually do that. No one's grabbing gasoline and burning an apartment block down. No one's Dextering fools. It's all in their head. It's just talk.

    [–]cynicalprick01 2 points3 points  (1 child)

    there has been a lot of self deception in this sub.

    I feel as though the amount is growing in proportion to the new subscribers.

    like dude, this guy has been a redditor for only 1 month.

    [–]Endorsed ContributorClint_Redwood[S] 1 point2 points  (0 children)

    I've been writting in trp for almost a year now. this is my alt account, i deleted all posts on my main to distance myself online.

    [–]1InscrutablePUA 2 points3 points  (2 children)

    So a bunch of guys on here are like 'yea, i'll destroy my enemies!'

    a lot of guys here are angry, they've been fucked over before, they want revenge, and they've been told all their life they're special but they're not seeing that 'specialness' turn into anything tangible. so the idea that following a simple set of rules or a philosophy (dark triad) will turn them into tony montana is pretty attractive.

    [–]fitnessacctasdf -3 points-2 points  (1 child)

    You don't capitalize your sentences. This shows me you have no respect for grammar, and thus no respect for me.

    I'm going to gut your dog and make you watch your sister eat it then bury you in the sand like the crab you are...

    cuz im dark.

    super dark.

    [–]Endorsed ContributorClint_Redwood[S] 0 points1 point  (0 children)

    It's just talk.

    It mostly is. I misled the beginning of the second article on purpose. For anyone outside of business, the common stigma of corperation or CEO's is they are evil or shitbags. I wanted to twist the narrative to show that a lot of times they aren't, they are just trying to minimize damages or protect their own interests, like the 58 million contract going under. Sometime shit just happens and it has a cascading effect down the money trail.

    As for the dark triad review. I didn't write that out of some revenge fantasy or malice. I wrote it to actually denture people as it is not a sustainable business venture. The point of that wasn't to use it for evil but to teach you that the dark way is usually a failed way as far as business in modern capitalism is concerned.

    [–][deleted] 0 points1 point  (0 children)

    Why would you grab gasoline and start randomly burning random people's apartments?

    Generally speaking enemies are made when you fuck someone over.

    Not everybody is ISIS.

    [–]darkrood -1 points0 points  (0 children)

    WHAT?!!! Here I am just Chanting "Blood for the Blood GOD!!!"

    Fine....I will go wash off my red face paint.

    [–]Endorsed ContributorClint_Redwood[S] 0 points1 point  (1 child)

    playing by the Dark Rules whilst being perceived as the Light

    It's impossible in this context because of word of mouth, online reviews, etc. It was much easier to fuck others over before the internet.

    The only possible way you could pull it off is to find a guy like Kevin that has no influence in your industry. You do it to any guy that has any kind of connections and your reputation is done.

    [–]sir_Preacher 2 points3 points  (0 children)

    But, once you burn a bridge in this manner, you knock over the tanker truck that was driving across it. Producing an oil spill that lights and floats down river.

    Eventually you will build a reputation and no one will work with you

    Law 5: So much depends on your reputation, guard it with your life.

    If you care about preserving your company for posterity, never joke with your REPUTATION.

    Many young and small companies underestimate the amount of damage a truly offended and articulate customer or business partner can do.

    In this age of social media, all it takes to destroy the reputation of your company is a well written post by one angry customer on twitter or facebook... and you are fucked.

    It does not matter whether what they are saying is true or not. Once such an accusation goes viral on social media, you are already fucked.

    [–]thInc 2 points3 points  (2 children)

    Great piece, I'm glad I read it. I'm a law student and I work in the cannabis industry in Washington. It's everything you described to the nth degree. It's really the fucking wild west right now. You've got convicted felons running million-dollar-plus businesses drawn up on a fucking napkin that are killing the game and experienced farmers who took the time to do things right only to have their first (read: last) crop destroyed by wildfire ashes.

    Which leads to my question. Obviously having a battle chest is the best think you can do to protect yourself. But without getting those first few big time (25% or more of your business), you don't have any profit to reinvest. That's why initial investmentis is so important. I'm curious what you think about attracting the right investors and whatnot. Similar, but quite different scenario.

    [–]Endorsed ContributorClint_Redwood[S] 1 point2 points  (1 child)

    I'm curious what you think about attracting the right investors and whatnot.

    That's a bit to contextual to write a broad answer on. I doubt guys jumping into the cannabis race are straight out of school. I've seen the legal docs required for a startup on it and it's ridiculous. I'm guessing no investor would touch anyone with a ten foot pole unless they have already proven themselves in other fields or industries. Cannabis is just to volatile of an industry right now for an investor to put money into it unless they know for a fact they are investing in a proven guy.

    [–]thInc 1 point2 points  (0 children)

    Hence the felons... they are the ones who are proven to know how to sell pot. They are also probably instinctively better at the Dark side of business than the larger population.

    There is no shortage of fresh grads (or you know, 20 something non-grads) trying to get in on the green rush. Most of them are family businesses or LLCs formed with one operational partner (the felon) and a handful of investors from God knows where. The law, however, is laughably unprepared to administer any sort of coherent justice on the subject. Put it all together, and let's just say the wild west analogy is really not far off.

    I'm not really sure what my question is anymore, but it's interesting to talk through lol

    [–]PostingIsFutile 1 point2 points  (0 children)

    If you had a good relationship with your bankers, you could have gone to them for a loan to pay Kevin and your second biggest vendor.

    [–][deleted] 2 points3 points  (14 children)

    Proverbs 22:7: The rich rule over the poor, and the borrower is slave to the lender.

    Never open your business on debt. Don't run your business on debt. Stop living on borrowed money and financially speaking, your business/life will never be raped by Mr. Chad D. Triad.

    [–]Endorsed ContributorClint_Redwood[S] 15 points16 points  (6 children)

    I have to disagree. This is great advice for personal finance but not business. It might work in some fields that have little to no overhead, but in my work you have to take risks, invest and take a debt for a future payoff.

    The key is to assess the risk and never let it have a bearing on you and always have money back for when shit fucks up.

    If you are averaging say 4-5 mil(not a bad figure for small business) of sales a year, you could safely invest or take a loan of 200k for 3-5 years and be fine. You will have to manage it but you'll stay afloat.

    You want to grow steadily and slowly. Your company is either growing or shrinking. Never stagnate and never let your debt/growth get out of hand.

    In kevins case he took on a tremendous amount of growth and it blew up in his face.

    [–]TRPhd 5 points6 points  (2 children)

    A medical business I know of had a grant/zero-interest loan from a government agency. A large, well-known pharma company made them an offer, but the president liked his employees and liked working so he declined the offer. They approached the other shareholders but they were mostly retired guys who didn't need capital infusions and preferred just holding on for dividends.

    One month later the government agency called in the loan. The company was worth 20+ times the amount of the loan, but the company wasn't liquid enough. Revenues aplenty, but dry powder, not so much. (The president had been warned about this by two of his shareholders, but he didn't like idle cash.)

    Pharma comes in and makes another offer. President approaches shareholders; they don't like the bid and approve him going outside to commercial lenders despite the interest and the dividend hit. Pharma approaches shareholders again to talk numbers, offer gets more generous, shareholders convinced because they and the President's beds would get plenty o' feathers.

    End result: President on the street with a pile of cash and a non-compete, employees get a new name on their paychecks, shareholders turn assets into cash into assets. Bing-bang-boom.

    Even if you are solid, even if you have good revenue and solid financials, even if you do everything right and have a sterling reputation... if the big guys want you, they can get you. You can get screwed hard or screwed softer (like the President), but no man is a business island - no one is invulnerable.

    Last I heard the President is looking to start a new company. In his late 60's that's both a good thing and bad; good for experience/connections, bad for living long enough to make sure his business is a success. Happy ending? Nah, not really, but he was solid and had a diversified product line with brisk sales so his pain was as much reduced as it could be.

    That's business.

    [–]wanderer779 2 points3 points  (1 child)

    This is another one that could have been avoided by following simple rules like keeping your debt maturities in line with your earning power and cash resources. If you have a loan that can be called at any time and you don't have the money to pay it, that seems like it would be a concern. If they had been prudent then the big boys couldn't have done this, no?

    [–]TRPhd 0 points1 point  (0 children)

    True. And he had been warned. But no one is truly invulnerable; everyone's got a blind spot.

    [–][deleted] 2 points3 points  (2 children)

    In kevins case he took on a tremendous amount of growth and it blew up in his face.

    I was really thinking more about OP's company. It sounds like their business was built on 'buying now and paying later'. Of course it's also doubtful that Kevin funded his business himself, so he most likely took on a lot of debt.

    Kevin's situation would not have meant the end of his business and years of trouble if he had cash-flowed things from the start. It would have sucked--no argument there--but he would have been in a better position to demand, wait, or continue operations.

    Likewise with OP's business, it sounds as though they were working on debt as well: counting on current clients paying in order for them to be able to pay their vendors. A fact of life is that sometimes customers are not going to pay. But you have a much better chance of survival in the crazy-times when your business is not in debt.

    [–]Endorsed ContributorClint_Redwood[S] 3 points4 points  (0 children)

    I work in a field that has returning customers and long term work. It's not one and done work like contracting. Our fall back is our customers stop receiving our work if they don't pay.

    It's not a tremendous amount of power, but it's enough to keep customers towing the line. But, there are times when customers fuck us.

    [–]TRPhd 4 points5 points  (0 children)

    if he had cash-flowed things from the start

    Not many new college grads can cash-flow $70K starting out. If he was cash-flowing, he'd have been more like Tim, and wouldn't have gotten screwed for an entirely different reason.

    It's just not possible to cash-flow some businesses from the start-up.

    [–]Sdom1 7 points8 points  (0 children)

    Debt is a tool. Use it incorrectly, and it will destroy you. Use it correctly and it will help you survive and thrive.

    For anyone who disagrees, one term: Cash flow.

    [–]flat6turbo 4 points5 points  (0 children)

    Don't run your business on debt

    this is personal finance advise, not business advise.

    in the real world in a business requiring capital goods, this is impossible. the entire economy runs on debt -- that's how money is created, that's how the system is setup from the central banks on downward. even a funded business with equity and a fat bank account is going to borrow money to preserve its cash.

    people who don't understand this have never run a real business.

    [–][deleted] 2 points3 points  (1 child)

    Debt is beautiful. There is simply no way to grow into wealth without debt.

    "It takes money to make money" is partially true. The best kind of money is other people's money (OPM). If and when shit goes wrong, OPM was lost, not yours personally.

    You use OPM to generate larger amounts of cashflow than you otherwise could have. As the cash comes in, you are taking your slice and stashing it. It's called leverage.

    When shit goes wrong, you still have your cash, and OPM is gone. This is the example here, Clint's cash is still fine, OPM (Kevin) is burned in the trash.

    You can get OPM from individuals, companies, or banks. Doesn't matter. If you set it up right, you have a way out without becoming homeless.

    [–]1legedu 1 point2 points  (0 children)

    It's fucking passé by a few centuries to talk shit on debt. For the doubters: if debt is so evil, then why is it that the cultures still in the dark ages don't believe in paying interest? The whole western economy is built on borrowing money. It's the money and wisdom of the old borrowed by the energy and vision of the youth.

    [–]JimmyJiangh 1 point2 points  (2 children)

    This is horrible advice.

    You use debt to make more money, it's called leverage.

    For a simple example, if you took out a $1 million loan for a house with 200k down and the home appreciated by 20%, you just made 200k. That's 100% ROI rather than 20% if you paid for the home in full.

    Conversely, if the home depreciates by 20% you just lost 200k (your entire down payment). It's more risk for more reward.

    [–][deleted] 0 points1 point  (1 child)

    this is terrible advice.

    2008 and "the great recession" would like to have a word with you.

    if you took out a $1 million loan for a house with 200k down and the home appreciated by 20%, you just made 200k.

    ...but only if you sold the house just then. In reality, you're still broke because you owe the bank $800,000.

    And if you took out a $1 million loan for a house with 200k down and the home depreciated by 20%, you just lost 200k. Or if you lose your job, or your business fails, or you become disabled, or a loved-one suddenly requires expensive medical care, or any other myriad of things that can go wrong.

    A shack on a rock is better than a palace in the sand when the tide comes in. I think you need to reread the tale of the Ant and the Grasshopper.

    [–]JimmyJiangh 0 points1 point  (0 children)

    Yeah, if you sell it. It was just a simple example. I'm talking about business advice here, not personal finance.

    A common example is a real estate business that builds a business park, uses OPM, and makes a ton of money. If the economy crashes, your company loses the same amount of money whether you invest your own money or not because you have to pay back the loan. If you still can't pay back the loan, you declare bankruptcy and the lenders are fucked.

    Successful businesses use debt as a tool, to disagree is just bad advice and not worthy of serious discussion.

    [–][deleted]  (2 children)

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    [–]cynicalprick01 3 points4 points  (0 children)

    most likely straight out of business school.

    who has not yet had the life experience to teach him not to be so arrogant as to think he has wisdom that he needs to share with the world in the form of these two posts.

    [–][deleted] 4 points5 points  (0 children)

    lol right? The whole thing sounds absurd

    [–]BarcaWinULose 0 points1 point  (3 children)

    Is Martin Shkreli on the dark path or is he a good guy? From my research it seems he's a good guy that's been preyed on by the media but I'm interesting in hearing your expert analysis.

    [–]Endorsed ContributorThotwrecker 1 point2 points  (0 children)

    Shkreli is a young, intelligent sociopath who let his rapid climb get to his head. He ultimately become a scapegoat, a face of pharma villainy that the public could lynch and feel like something was accomplished. Meanwhile, the prices still got raised and the executives behind the scenes are reaping the profit. Meanwhile, he trolled the public and acted untouchable, as though he couldn't be bothered to protect his rep in the eyes of the public. This kind of IDGAF mentality is useful to someone like Kanye (who Skhreli started tweeting like), but it's not useful to CEOs and political candidates.

    [–]Endorsed ContributorClint_Redwood[S] 0 points1 point  (1 child)

    That dude fucked up in multiple ways. There has been quite a few post analyzing his fuck ups and how they apply to the 48 laws. Most of those analyzes I would probably agree with. He's definitely someone to study on how not to do shit.

    [–]EntitledShitHead 0 points1 point  (0 children)

    Do you have a link? I tried googling that, but no luck

    [–]2kez88 0 points1 point  (0 children)

    Great posts, are there any books that are good reads on ideas like "never letting a company be more than 10% of your income". I'm interested in starting my own company and I'm trying to read as much as I can. Actual rules of business like this are great. Thanks!

    [–]the99percent1 0 points1 point  (0 children)

    If I was retiring, I'd do the same thing too.

    [–]wanderer779 0 points1 point  (0 children)

    nice. Still I think I'd rather be 350k poorer and have friends. It seems like a small amount to ruin your whole reputation for. Then again, maybe he just didn't like these guys and wanted to fuck them over.

    There are a lot of companies that have one large customer. I even used to work for one. It is not ideal, but if they hadn't done it, there'd have been no business. They set up networking equipment in factories for one business that made up probably 90% of their sales. This was a business in the u.s., staffed with relatively expensive american workers, and which printed newspaper inserts and the like. I mean you can hardly imagine a business more poorly positioned for the changes of the last 20 years. But I just checked and amazingly the company I worked for is still in business.

    I think there are no hard and fast rules in business, just risks to look out for and plan for. Like you said before, ideally we'd all have a business like proctor and gamble but that is just not reality.

    I think you are right about the whole idea about screwing people over in business. My grandpa used to say, if you want to make money by screwing people, get all you want the first time. The implication being that word will get around and there won't be a second. Plus, ask yourself if you are really a sociopath who will be happy with that life? You don't want to get to the end of your life and have everyone you know hating you. It's a small % of people who can be happy living like this.

    [–][deleted]  (2 children)

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    [–]Endorsed ContributorClint_Redwood[S] 0 points1 point  (1 child)

    58/230 comes out to 25.2% of total sales for the year.

    [–]westsan 0 points1 point  (0 children)

    This has a lot to do with economies of scale. Because bigger companies have more resources they can do more manipulation. As long as companies have cheap access to cash and thereby resources they will continue to do this. That is why with the current artificially interest rate is hurting us and the economy. Big companies suppress innovation and rip off the little guy.

    [–]almostaristotle 0 points1 point  (1 child)

    I read both your posts and have ton of questions. Can you recommend some book just to understand the basic terms and processes in any business, I only have bachelor's in engineering and would like to start of as an IT consulting firm in a few years for sure, could use some reading till then.

    [–]Endorsed ContributorClint_Redwood[S] 0 points1 point  (0 children)

    You need to have a good grasp on finance. Khan academy has a lot of great info on economics and business.

    [–][deleted] 0 points1 point  (0 children)

    Read about great men like Rockefeller and Carnegie. You'll be learning the kind of attitude you need in business from some of the greatest players of the game.

    [–]-Universe- 0 points1 point  (0 children)

    Thank you very much for both the articles.

    [–][deleted] 0 points1 point  (2 children)

    So he contacted all his vendors, ordered as much shit as he could from all of them. Liquidated it all, didn’t pay any of his vendors a dime

    What's the point of ordering all that shit? Does it mean he gets more money for liquidation?

    [–]Endorsed ContributorClint_Redwood[S] 0 points1 point  (1 child)

    Yes, he orders raw materials, lumber, metal, rebar, tools, anything. Then sells it all off, doesn't pay the vendors the net 30 and books it to South America.

    [–]dark_g 0 points1 point  (0 children)

    The company of my comment in the companion post may have been treading on the Dark Path. A less-financially-secure friend of mine got involved with them. Picture the CEO: good-looking woman, late thirties, BPD, barefoot in her office, Louboutins on the carpet. She fucked my friend a couple of times (literally) and convinced him to come in and bring a substantial contribution, personal effort of his. He was paid some small amounts and then, pow! he was made VP. NO salary, oral (heh heh) promise of company stock, but flashy business card! my friend was in seventh heaven. Months later with no more money in sight and financially strung out he was ranting and raving how they fucked him over. -- Hey, I said, at least you got to fuck the CEO, I never did. -- NOT HELPING! Our tenures overlapped, neither could have warned the other. The LESSON remains: give and take ought to be in approximate lockstep, do not overexpose yourself. And be wary of oral promises.

    [–]WrensPens 0 points1 point  (0 children)

    Isn't this like the plot in Horrible Bosses 2?

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            [–]Do not send modmail to my personal inboxCrazyHorseInvincible[M] 0 points1 point  (2 children)

            No pissing contests. First and only warning.

            [–]Eugenics2015 0 points1 point  (1 child)

            Stop hounding me dude. Holy shit

            [–]Do not send modmail to my personal inboxCrazyHorseInvincible[M] -1 points0 points  (0 children)

            Moderating this group is my responsibility. Do you understand that pointless bickering like this will just get removed, and might get you removed as well?

            [–]TheMGhandi -3 points-2 points  (4 children)

            Or if you're in a large group of businessmen and there's a new chump in town, you'll all find a way to screw him over and brag about it at golf the next week.

            [–]Endorsed ContributorClint_Redwood[S] 9 points10 points  (3 children)

            This may be the case in some extreme circles. I could imagine it in may the cut throat world of wallstreet. But in my field I've never once come across a group like this.

            This is a common fantasy I've seen portrayed in Hollywood when it comes to CEO and evil corporations. Never seen it in reality.

            Most businessmen understand the intrinsic value of trust and reputation. Even if they work together to fuck others, It has a negative effect in the long run. Plus, you are putting your wrongdoings in the hands of others. Unwise, anyone of them could oust you and your done. If I was going to fuck someone, me and only me would know about it. 0 strings to worry about.

            [–]TheMGhandi 0 points1 point  (2 children)

            The Jewish bankers have run the world since mayer rothschild started central banking. Maybe you haven't personally come across such men, but they exist.

            Not to mention,they are the only group smart enough to work together in competition. All while the rest of us screw each other over just to get a few more pennies to their thousands. Such intelligence can only be admired, and hopefully, we can all help our progeny the way the Jewish migrants helped theirs.

            [–]Endorsed ContributorClint_Redwood[S] 5 points6 points  (1 child)

            Not to mention,they are the only group smart enough to work together in competition.

            We work with competitors regularly. It's understood in our line of work that it's better to help your neighbor than to try and destroy him. Your land is worth a lot more when it's surrounded by a bunch of fancy houses than being the sole survivor in a ghetto.

            [–]TheMGhandi -2 points-1 points  (0 children)

            How does one join the in-group without letting a man violate your body?