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  1. #1
    SitePoint Member
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    Apr 2008
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    Own two companies, How do I keep both without a conflict of interest?

    Hi All,

    I own 50% share in an online home decor store (ecommerce) and a web development and hosting comapany (sole proprietor). The virtual ecommerce store started after the web development company and it was agreed that we would run this company P/T. She had her full time job while I ran my web dev business.

    My partner brought her marketing skills and events management skills to the table while I brought my IT skills specific to the company. I built the website from scratch as well as I am 50% liable for the startup capital, marketing $$$ etc. Basically we both wear all hats. You know how it is.

    Today she has left her run this one full she says. I know I sound like I do not trust her however when her company is losing money and she went from full time to part time to unemployed, I had my reservations. Yet, I trust her. She is very private and did mention she was starting something with her husband and will not be able to giver her full time support to the business. On the flip side, in public she claims otherwise.

    As a part of our marketing stragety we came up with a referral porgram which I added on to the site. Now, with all the excitement she wants to now market the idea to other companies. She knows that I have the skill to do software development and distribution etc. I drew the line at that point, because that is whole diff service.

    The business is an ecommerce store and the legal description of the business speaks for itself. Whenever there is an opoortunity to earn $$$ on the technology side , she wants to move on it right away.

    Now, she has a problem with me running my software development company p/t and would prefer I make the leap 100% to bring the company to the next level. Do whatever it takes. I disagree because I cannnot do so until I see some growth. The company is in debt!! The company has not begun to reap the rewards based on the current business model. Home Decor products are touchy feely products and we do not carry a brand. We get sales whenever we have a show but the site has not generated a cent of revenue.

    Where do I draw the line??? How do I move forward.

    What are your thoughts?


  2. #2
    SitePoint Wizard silver trophy
    beley's Avatar
    Join Date
    May 2001
    LaGrange, Georgia
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    I was in a very similar situation to yours at one point. I started an e-commerce business first, with a business partner, and then went on to start a web development/consulting company.

    If this business (e-commerce website) can't pay your bills, just tell her that. Making a leap and quitting your other business will take food off your table. Unless you can afford to go without pay for 4-6 months or more, then you should keep your other business and work on both.

    If the business was profitable and growing, it might be a different issue. You have to take care of your life before your business obligations.

    That said, you should still be managing your end of the business as agreed upon in your partnership agreement, etc. If you didn't have the time required by the business to do your part, you shouldn't have gotten into it (and should get out).

    What needs to be done day to day in the e-commerce business? I get away with only putting in about 10 or so hours a week on ours, and we have a warehouse/retail location, website, etc. I manage virtually everything IT related, including website and marketing. My wife handles the purchasing, fulfillment, customer service, etc.

    I'd suggest talking with your partner and laying out each others responsibilities a little better. Make them more defined. Then make sure you have time to take care of your responsibilities. If so, I don't see any conflict of interest in keeping your other business especially while this one isn't making any money.


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