Morality Check - Starting a business?

[Kyrie]

Hi TAZ,

I have a question and I need someone to check my moral compass. I work for a sign fabricator and I love the industry and dreamed of one-day having my own. I thought I'd start small and make decals, window and vehicle magnets, etc.. I asked my boss if I can sell those as a "side hustle" since I work remote for them a couple states away. Well, I put so much work into my site, and I actually have some prospective clients.

Now it came time to my asking my boss, how does it work (since I work in sales) do I just quote myself and sell it on my own? He told me he's uncomfortable with me doing that now and wouldn't want to be my "production" facility while I make profit. Keep in mind, he runs a chain and is limited to his market and says it's illegal to market in other markets since that's another's "Territory"

So now, I'm definitely confused as to what to do. I planned on having him/the shop produce the decals and I would sell them.. but now do I find a new supplier? It feels wrong to be in direct competition with my boss and spending time selling for not his company.

Keep in mind too there is no presence where I live for his shop, and my job is simply answer the phones... So does it really matter?

OR should I abandon this business idea and pursue something else entirely?

 

[Nabix]

Kyrie I'm not sure I understand your business model. You work for a sign fabricator. You want to be a sign fabricator. You want to use your current employers equipment to produce your products for your customers?

 

[Kyrie]

Kyrie I'm not sure I understand your business model. You work for a sign fabricator. You want to be a sign fabricator. You want to use your current employers equipment to produce your products for your customers?

So, let be back-up a minute. I'm sorry I was a bit upset at feeling misled to doing lots of work for it to not work out. Let me rephrase:

One of the big things of my job is that if we cannot do things (for example, business cards) we go to a supplier, get a quote.. mark it up and tell the customer and we don't touch it. I thought, well starting out I can do that but for everything. Then, once I make enough maybe get my own equipment and start doing things in house.

So I had this idea, since I am working remotely I can sell locally and when a customer wants a certain thing.. I act as a customer to the place where I work. I then take the amount I (the customer) has to pay the company I work for, and add in my margin and sell it. I spoke about this to my boss prior to working on this website and marketing efforts and he was 100% on board.

Now, the tricky part about all this is legally the company that I work for cannot sell in my area as it's not their territory. I say this because I won't be taking away from them at all.

Here's a scenario:

Customer wants Window Decal
I get quote from where I work $20
I add my margin - let's say *2
I tell customer (my customer): That'll be $40
They say okay, and pay me.
I pay the place I work.
They produce the sign.
They give me the sign
I give it to the customer.


This is exactly the same process I do for work, if we do not offer something in-house so it's not like some nefarious business practice.

I also though recently found out in my employment contract there is a non-compete meaning I cannot do this anyway, but I just feel hurt I did everything right and cleared it with him then he changes his mind.


EDIT: For the sake of discussion, is it morally right to just find a new supplier and do it on the side?

 

[Nabix]

So, the business model you just described is literally the definition of drop-shipping. You're boss should have no issues with this as he will be making profit on this idea rather than loosing. Basically you would become a 'white label' reseller of their products. To be honest, there is a drop-ship program for just about everything out there. This would give you the ability to expand your product line and also add redundancy.

There is no legal issues as you are the customer for every item and you are entitled to do with your property as your choose. However, you will need to figure out returns and re-works. Those are the hardest parts. There is a lot to drop-shipping. It's a lot of work.


Morals in business get you no where. . . Hard truth. Number one goal is profit. Stepping on toes is apart of the job. Just be careful of which toes lol

 

[Kyrie]

So, the business model you just described is literally the definition of drop-shipping. You're boss should have no issues with this as he will be making profit on this idea rather than loosing. Basically you would become a 'white label' reseller of their products. To be honest, there is a drop-ship program for just about everything out there. This would give you the ability to expand your product line and also add redundancy.

There is no legal issues as you are the customer for every item and you are entitled to do with your property as your choose. However, you will need to figure out returns and re-works. Those are the hardest parts. There is a lot to drop-shipping. It's a lot of work.


Morals in business get you no where. . . Hard truth. Number one goal is profit. Stepping on toes is apart of the job. Just be careful of which toes lol

You're absolutely right. I do think the Toes of my main income provider is NOT a good one to step on.

 

[Nabix]

You're absolutely right. I do think the Toes of my main income provider is NOT a good one to step on.

If I understand your business model correctly, you wouldn't be stepping on your bosses toes. You would be reselling your bosses' products at a markup. Where you boss doesn't loose money. In actuality you would simply be just another customer in his eyes. As long as your not getting any different treatment than any other customer.

 

[Kyrie]

If I understand your business model correctly, you wouldn't be stepping on your bosses toes. You would be reselling your bosses' products at a markup. Where you boss doesn't loose money. In actuality you would simply be just another customer in his eyes. As long as your not getting any different treatment than any other customer.

I also agree here, but he is uncomfortable with it and wouldn't want to allow it. Something about 1) The legality of me selling his products in another market AND working for him and 2) The dynamic of our relationship changing.

If he knew about it, it would absolutely be stepping on his toes and I wouldn't want to sour our relationship.. Even if (to me) it seems like a win-win for both of us.

 

[Nabix]

I also agree here, but he is uncomfortable with it and wouldn't want to allow it. Something about 1) The legality of me selling his products in another market AND working for him and 2) The dynamic of our relationship changing.

If he knew about it, it would absolutely be stepping on his toes and I wouldn't want to sour our relationship.. Even if (to me) it seems like a win-win for both of us.

Well I wouldn't give up on it. . . If this is something you really want to do then make it happen. Find a way. There has to be a drop-ship program out there that can handle your requests. Or, strike up a deal with another company.

 

[Kyrie]

Well I wouldn't give up on it. . . If this is something you really want to do then make it happen. Find a way. There has to be a drop-ship program out there that can handle your requests. Or, strike up a deal with another company.

Do you think it's wrong to go against my employment contract?

 

[Nabix]

Do you think it's wrong to go against my employment contract?

You signed a no compete clause?

 

[zappaDPJ]

Do you think it's wrong to go against my employment contract?

It's generally not a good idea to renege on any contract, employment or otherwise. To do so could cost you dearly.

I've read this thread through a number of times but I'm still finding it hard to comprehend the nuances. That said my original statement stands, if your employment contract forbids a course of action, avoid it.

 

[LeadCrow]

A bit tricky, but workable - your site/company can enter a contractual relationship with your employing company as a supplier/manufacturer. Wether you hold any position there is irrelevant, you could create it as a family-owned business youre not personally a part of. You'd likely lose the benefit of being an employee there and some operating margin, but its less awkward and secures a business opportunity for the manufacturer with tooling (its technically safer for a company to handle not only its own clients that it worked to gain, but also other businesses' client that it did not need to struggle acquiring).

Keep in consideration that many contracts include no-compete clauses, during and after employment. Running a similar business while youre clocking hours doing the same for your employer can be troublesome and negatively affect your performance at both.

 

[RisingSun]

This is a sticky situation because your boss reneged on the agreement you had talked about before you began work on your own website and business. But so it goes. You've done nothing wrong ethically -- in fact, you talked to him first about your plan. Now that he has backed out of the deal, you're faced with the uncomfortable situation of having to find another manufacturing source for your products. That's definitely uncomfortable, but are you stealing his customers? It doesn't sound like you are taking any of his business away -- you are developing your own business.

I think you should go forward with no regrets. Your boss is attempting to control you, and that's not cool. My guess is that you will soon outgrow the need to do any work for him at all. My recommendation is to make sure to keep records of all your clients, and make sure there is no overlap with his clients. Find yourself some honorable suppliers to work with going forward.

You are several states away, so keeping your business private from your daytime employer should be easy.

 

[Joeychgo]

Do you think it's wrong to go against my employment contract?

you have a contract? You didnt mention a contract earlier

 

[Kyrie]

you have a contract? You didnt mention a contract earlier

It's an employment agreement. It's not really legally viable but I don't want to burn any bridges.

 

[Nev_Dull]

I have a slightly different point of view than some of the others:

• You want to become both an employee and a client of your current company. Like your boss, I'd be uncomfortable with that.
• You want to do your own sales and work for your employer at the same time. I'd be uncomfortable with that.
• You have a non-compete clause in your employment contract. I'd be really uncomfortable with that.

Proceeding against your employer's wishes (and at least partly on his dime) will likely end up with you fired and possible legal problems. Not a good way to begin a new career.

If this is something you really want to do, make sure you do it correctly and ethically. Find a new job in a different field, wait out the non-compete period for this job while you create your business plans, then start up your business. If you leave on good terms, you might be able to get your employer to waive the non-compete period because you want to send business their way -- though it could be tough, since you said it's a franchise business.

 

[Kyrie]

I have a slightly different point of view than some of the others:

• You want to become both an employee and a client of your current company. Like your boss, I'd be uncomfortable with that.
• You want to do your own sales and work for your employer at the same time. I'd be uncomfortable with that.
• You have a non-compete clause in your employment contract. I'd be really uncomfortable with that.

Proceeding against your employer's wishes (and at least partly on his dime) will likely end up with you fired and possible legal problems. Not a good way to begin a new career.

If this is something you really want to do, make sure you do it correctly and ethically. Find a new job in a different field, wait out the non-compete period for this job while you create your business plans, then start up your business. If you leave on good terms, you might be able to get your employer to waive the non-compete period because you want to send business their way -- though it could be tough, since you said it's a franchise business.

- I can see being uncomfortable, and I can see doing it during work time.. That would be bad. I can also see how the dynamic would be wrong too.. so I get that.

- I wish he would have told me prior to be dumping money and time off hours to do this, when I had asked him.

- I'm not going to pursue it, I found another venture I'm interested in but now I do not have the capital. In terms of my non-compete however.. I can't post the exact clause here but it WOULD allow me to work here as it's literally not their market. It wouldn't be competition in any sense.


Again, that being said. I'm moving on.

 

[R0binHood]

The only potential issue here is the contract. Even then, it's probably not necessarily an issue unless you're starting up on your own competing brick and mortar place with all the kit or you're trying to steal any customers or leads from your existing employer.

If you've built your own site, got your own brand doing all your own marketing, all remotely online then you can use any print on demand company or local (or not) print shop you can establish a relationship as your white label supplier.

If you were planning to pay your employer full retail price anyway for extra business that he wouldn't have generated otherwise, then he's passing up good business where the leads have been generated by you at no cost to him.

If he's funny about it just find another supplier, try to negotiate trade or reseller rates and just use them instead and do your own thing on the side. Keep both gigs completely separate.

 

[Kyrie]

If you were planning to pay your employer full retail price anyway for extra business that he wouldn't have generated otherwise, then he's passing up good business where the leads have been generated by you at no cost to him.

This is what I thought too. Maybe its more to do with the dynamic rather than the actual business.. ya know?

 

[R0binHood]

If your company was based in the same town I think it could be weird.

But it sounds like you're already a remote worker and your business is only online and therefore national. So it's highly unlikely you'd be taking away local traffic from him. Especially if you're marking up his retail prices. Seems like it would have been a good deal for both parties, especially as you have an existing relationship with the company and it would have been easier to sort out the inevitable problems that come along with online print ordering.

Seems like his loss to me. I'd shop around and try to find another print partner, maybe even one who is local to you that you can meet with in person if necessary, and negotiate some reseller rates if possible to increase your margins. Or find a larger national brand who couldn't care less who are, has a good reputation, and might already have much cheaper retail prices because or their buying power and volume and resell through them as long as they are willing to provide a white label service. Tons of print companies do white label service specifically for resellers like you.