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A Sign Company Owner Confronts Excessive Family Freebies

A deadbeat in-law is back for more in “The Case of the Serial Entrepreneur.”

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“WHAT WAS THIS, Dom’s fourth new business venture in the last seven years?” thought Emily Harris, owner of Purple Ridge Sign Co. in Chattanooga, TN. Every time he started a new business, Emily’s husband Ross would ask her on behalf of his brother Dominic — “a serial entrepreneur” as he called himself — for new signage, collateral materials and more.

“Remember how much Dom helped you in your first year starting Purple Ridge?” Ross would always say. That was true. In Purple Ridge Sign’s first 18 months of business nearly nine years before, Dominic had operated the shop’s first printer and laminator when the company was unable to hire anyone else. However, with each startup of a new business, Emily’s response had evolved from “sure” to “yes” to “I guess” and now sullen silence.

ABOUT REAL DEAL

Real Deal scenarios are inspired by true stories, but are changed to sharpen the dilemmas involved and should not be confused with real people or places. Responses are peer-sourced opinions and are NOT a substitute for professional legal advice. Please contact your attorney if you any questions about an employee or customer situation in your own business.

ABOUT THE AUTHOR

Created by ROLF L’MAO, Signs of the Times’ mascot. Email him at editor@signsofthetimes.com.

Illustrations by Karina Marga Cuizon

“So he’s taking over a ‘bar-slash-laundromat’ this time,” Emily said to Ross, to which he replied, “That’s right.”

“And he’s determined to change the name, rebrand everything,” she said. “That’s the plan,” he answered.

“I see…” Emily said. “I take it he’s expecting the family discount, as usual?”

“Yes, please,” Ross said. “You know he’s good for the materials but he’s hoping your success and kindness can cover labor.” Emily looked straight at her smiling husband, thinking, “… cover labor … and design-shop-install time away from real customers and overhead … hey, all of it.”

Ross paused. “He might need a few extra months after reopening to pay you, of course…”

That would not be a first either. The pandemic saw Dominic start and abandon three businesses in two and half years, none of which saw him pay for any of his sign expenses. “I’ll definitely get you next time,” Dominic had told Emily each ‘next time.’ “It’s just this damn Covid and all the restrictions that are holding me back. You know I’m good for it, Em. This next one’s a sure thing!”

While Dominic had paid a little over half of what he owed for his most recent, and first post-pandemic venture — a landscaping-slash-snow removal service that didn’t last long enough to plow a single flake — with this latest project, the debt to the signshop would be larger than ever. Purple Ridge Sign Co. was successful. It wasn’t a multi-billion dollar corporation… or a charity.

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Ross and Dom’s side of the family always expressed gratitude to Emily at every family event, sometimes admitting, “Well, you know Dom. He’s always been like a rolling stone, never settling on one thing very long…” before realizing they were likely apologizing in advance for his umteenth new idea and subsequent failure.

After a fitful night’s sleep, Emily brought up the issue with Ross at the breakfast table. “You know Dom still owes Purple Ridge a considerable amount for our work over the last several years—”

“And he really intends to pay that off,” Ross interrupted, but this time, Emily wasn’t having it.

“… last several years, as I was saying,” Emily continued. “I’m not sure we can manage the same arrangement. Why can’t Dom just continue with the bar-laundry’s current name and branding?”

“It’s part of his plan to—” Ross started before Emily stopped him.

“Is it part of his plan to keep freeloading forever?!” she burst out. Silence followed and after a moment, Emily formed the words in her head to apologize. But she hesitated.

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The Big Questions

  • What would you do if you were Emily? Agree to her brother-in-law Dominic’s most recent request, perhaps for the last time? Or cut him off? How do you react when family imposes too much on your sign business?
Cody M.
Houma, LA

Dom would have to pay for his signs this time upfront. Emily should forgive the rest of the balance he owes because he will never pay. She should tell her husband to relate to his brother Dom that the reason we are successful is because we stick with one type of business and run it efficiently for a longer period of time. The husband should tell his brother Dom that we are no longer a bank for his signs. Dom will never be successful in business because he wants to make $100 million dollars the first month without working for it or working the business. Dom is living in a fantasy world. I know a few people like this!

Alan O.
Houston

Emily is in a tough spot, so maybe it’s time to share the love. Since his family knows Dom is “good for it,” then she could agree to do the signage if one of them will sign as a guarantor. Also, it might be time to talk with Ross about where money comes from.

Ian M.
Bristol, RI

We have all fallen into the trap of “helping” a family member. It is OK to do so, if you go into it clearly knowing what your loss will be and if you feel that is an acceptable loss for your business. However, we are in business not only because we like or love the work, but to make profit and grow our businesses as well. With that said, I would work up a line-by-line estimate for each item with my highest markup and offer them the same discount that I offer my wholesale clients (other signshops). As for delayed payment, I would give them the name of my banker and tell them that they offered my business a great rate on a business loan, but I need payment up front. Business is business and if you lose a family relationship with someone because they can’t understand your needs, look at it as a win — one less holiday card to send.

Mike S.
Glendale, AZ

Honestly, we all know what she should do but if we are being honest, I would most likely just grin and bear it again. Many of us also know you can pick your spouse but you cannot choose their family so it comes as a package deal.

Patrick D.
Addison, IL

We all have our family issues that affect our businesses. Relatives can be your best solution or your worst nightmare. If the payback of the first deal was never done, then you can’t count on this one being paid back either. I would be cutting the grass, washing windows, offering my labor or something of value to the company to get the debt paid down from my free sign. If you don’t stop it this time, you will be expected to keep doing it, like it’s a regular thing. It shows a lack of respect and integrity and you should not be a part of it, as hard as it is to resist the family pressures.

Teresa M.
Dana Point, CA

Don’t apologize for the frustrated response. Tell Dominic, “I know you’re excited about your new project, Dom. Sign manufacturing is what I do for a living, and I’ve reviewed my business financials recently and discovered that I have had the wrong policy in place for years. My CPA put a strict policy in place that a credit app is completed, approved and on file for each business that wants terms. Even with that, even for family, we need a 50% deposit up front, my CPA has informed me. I require interim payments as well. If you can complete our credit application, I will get it to our CPA for review. And unfortunately, they say any old debt would have to be cleared up.” This puts a buffer person (CPA) between friend/family member and business owner. It also establishes an important policy. No pay, no work. Then offer to look at the job requests, parse to small bites, require payment in full up front for pieces “while credit app in review.”

Elaine S.
Clearwater, FL

That is never an easy situation. I would probably not do this venture with a handshake but create a formal contract or agreement for services rendered that required some sort of deposit as well as payment schedule for past due. I would also include in the agreement we will dedicate X hours of design time to this project, X amount of materials and X amount of press time. Then you have a budget and an established set of expectations that this is not an open-ended arrangement that just runs up expenses. Plus, you would have something signed that could be binding — just like you would if you were quoting/estimating for any other customer. Since he is family, I would charge him cost but I would assign specific times of or days of the week with my staff for that work to be done in order to ensure existing full-paying customers and new business remain the priority. P.S. I would probably also be divorced.

Joe G.
Portland, OR

Sorry Dom, Purple Ridge is just not in a position to finance any portion of your adventure at this time. My nice way of saying to Dom, “I try and stay away from family deals whenever possible.”

Robert B.
Oakdale, CT

First, apologize to your husband for jumping on him at breakfast. Then tell his brother to pay up or find another charity. Being family doesn’t give permission to take advantage.

Dan W.

Dom has been repaid for his help. Now he owes us. I’m willing to rebrand his business, half down, the rest at or before completion. If he can’t come up with the cash, I suggest he run the business under the old name and signage. Once it has proven itself and is generating revenue, half down should not be a problem. We can’t assume his risk every time he opens a business, even part of it, unless we have some say in how it’s run. And with our own business to run, this is not an option.

Earl W.
Tucker, GA

Unfortunately, we are not a charity organization. Although some of my family members believe we are the “rich” Walkers, we are a business with legitimate expenses. Over the years, I have had family members and friends ask me to support their causes. When the project was completed, I would hear the violins asking for a discount or to forgive the debt. We need to let family members know that we are a business and cannot provide discounts or forgive debts. I would rather decline a project if we cannot agree on a plan and execute it.

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