Starting in competition with employer

[Mcdougal]

Hi there,

I’m asking for a friend.

My friend intends to leave his employer, after making them 100k profit a week and no recognition or promised bonuses or profit sharing. As mentioned in his interview. He’s basically taken there market places from 5k a week to 100k a week and website online from 41K a month to 320K

My friend intends to leave and do exactly what he is doing for them but on his own.

He’s done all the ground work before leaving he said he’s got all the suppliers and set up ready, but not actioned them yet.

He’s never been given a contract of employment whilst being there or a no compete agreement. Very irresponsible of the employer, but it’s been an oversight with accounts/ HR department. He tells me he’s always been paid however.

Can I check if he can get legally in trouble by doing this?

He’s genuinely fed up, loves the industry but wants to go at it alone and grow his own company and he has “proven” it and totally controlled and managed it for the company he is employed by currently.

He knows he’s making the owner rich and he’s getting no rewards and everything promised has fallen through on lies.

He’s been there just over 9 months.

 

[Newchodge]

No contract, he can do whatever he likes except take with him intellectual property belinging to his ex employer.

 

[Mcdougal]

No contract, he can do whatever he likes except take with him intellectual property belinging to his ex employer.

Can’t the company he works for still go after him? It seems all too easy?

He’s already got everything lined up, e.g. supplier accounts etc. he’s set up a ltd company.

He’s just timing it now

 

[simon field]

There is no reason why your friend can’t do this, it’s business. He’ll learn!

 

[Newchodge]

Can’t the company he works for still go after him

How?

 

[Mcdougal]

How?

He’s worked for them for 9 months, he’s got there supplier details (not customers)

 

[Newchodge]

He’s worked for them for 9 months, he’s got there supplier details (not customers)

He is not required to wipe his memory clean. just not take any lists with him.

 

[MBE2017]

Nothing to stop his current employers persuading the suppliers not to supply him.

Business is business, it’s never fair. Sure he can try to compete, but a newcomer rarely fairs well in such a battle. From the suppliers point of view, why rock the boat?

They might supply him, they might not. Personally I would suggest he looks to use his obvious skills in making his own business from other products.

I have had guys try the same over the years, I have destroyed every single one of them. I have gone out of my way to ruin them, but not everyone is like myself.

 

[Mark T Jones]

This is exactly the way that many businesses are started. Even non-compete clauses are limited in their impact.

You have to expect some pressure from the employer, which might include

Leaning on suppliers/customers
Smear campaigns
Spurious legal threats
Price wars.

Eventually it will fizzle out - you might even end up doing business together (don't bank on that one). My personal approach would be to be prepared, but to carry on as if it wasn't there.

 

[Mcdougal]

Nothing to stop his current employers persuading the suppliers not to supply him.

Business is business, it’s never fair. Sure he can try to compete, but a newcomer rarely fairs well in such a battle. From the suppliers point of view, why rock the boat?

They might supply him, they might not. Personally I would suggest he looks to use his obvious skills in making his own business from other products.

I have had guys try the same over the years, I have destroyed every single one of them. I have gone out of my way to ruin them, but not everyone is like myself.

He’s on smart cookie. I don’t think his employers are that switched on. I genuinely think he outsmarts them. He’s really has a streak of entrepreneurship within him.

Why would you go out of your way to ruin them, surely someone could do the same back to you? What happened if they ruin you or want a fight commercially?

He’s already got accounts with the suppliers, already established he said to me after setting up his own LTD company. He’s even used a ltd company name that doesn’t associate to the market. I think he’s called it something like Bright Frog LTD

He knows he told me the company suppliers and the owners of the company now he’s watched and seen the communication there is no real connection or friendship. He doesn’t think they wouldn’t supply him after analysing everything within his timing.

 

[Mcdougal]

This is exactly the way that many businesses are started. Even non-compete clauses are limited in their impact.

You have to expect some pressure from the employer, which might include

Leaning on suppliers/customers
Smear campaigns
Spurious legal threats
Price wars.

Eventually it will fizzle out - you might even end up doing business together (don't bank on that one). My personal approach would be to be prepared, but to carry on as if it wasn't there.

How can they be limited in there impact?

 

[Mcdougal]

He is not required to wipe his memory clean. just not take any lists with him.

That’s what he said he is doing. It’s rather niche market, but he knows it extremely well have after his education there. He’s basically been paid to be educated.

I think what annoyed him was it’s like the owners don’t never trust him. Yet they never paid him what was agreed.

If my employee bought me that sort it return. I would treat them to many financial rewards.

 

[Mark T Jones]

How can they be limited in there impact?

In my view the best way to limit them is to ignore them.

 

[DontAsk]

I have had guys try the same over the years, I have destroyed every single one of them. I have gone out of my way to ruin them, but not everyone is like myself.

NIce.

 

[Ian J]

This is exactly the way that many businesses are started. Even non-compete clauses are limited in their impact.

When I started out in the factoring game many centuries ago there was one major recruitment company and many of their managers left to set up in competition and a few years later their managers left to do exactly the same thing.

This continued ad infinitum until we got to the position now where recruitment companies are ten a penny

 

[DontAsk]

When I started out in the factoring game many centuries ago there was one major recruitment company and many of their managers left to set up in competition and a few years later their managers left to do exactly the same thing.

This continued ad infinitum until we got to the position now where recruitment companies are ten a penny

Sounds like Estate Agents.

 

[HFE Signs]

I've seen this happen several times, always in tears - people don't see the full picture, think they are the business and they don't see what goes on outside of their role.

 

[Mcdougal]

I've seen this happen several times, always in tears - people don't see the full picture, think they are the business and they don't see what goes on outside of their role.

He genuinely says, it’s the online market places he manages, he even sources the product. So I think he’s current role he knows allot?

Has full insight.

 

[HFE Signs]

He genuinely says, it’s the online market places he manages, he even sources the product. So I think he’s current role he knows allot?

Has full insight.

Good luck to him then ?

 

[ethical PR]

He’s on smart cookie. I don’t think his employers are that switched on. I genuinely think he outsmarts them. He’s really has a streak of entrepreneurship within him.

Why would you go out of your way to ruin them, surely someone could do the same back to you? What happened if they ruin you or want a fight commercially?

He’s already got accounts with the suppliers, already established he said to me after setting up his own LTD company. He’s even used a ltd company name that doesn’t associate to the market. I think he’s called it something like Bright Frog LTD

He knows he told me the company suppliers and the owners of the company now he’s watched and seen the communication there is no real connection or friendship. He doesn’t think they wouldn’t supply him after analysing everything within his timing.

He/you are not that smart or else he would have negotiated a much better deal when becoming employed with this company in terms of commission levels, would have ensured he had an employment contract and wouldn't need you to ask these sort of questions on his behalf on a forum

 

[Mcdougal]

He/you are not that smart or else he would have negotiated a much better deal when becoming employed with this company in terms of commission levels, would have ensured he had an employment contract and wouldn't need you to ask these sort of questions on his behalf on a forum

He never wanted the employment contract, as he always knew he was going to go away and copy his employer after a few months in so never chased it up etc - he told me if saw it as blessing, so we he could leave and copy without repercussions.

He did negotiate just employer didn’t keep to there promise.

That’s why he’s going to kill their business.

 

[Chris Ashdown]

Has he got the money to very early get positive cashflow, It's relatively easy to get sales , but getting paid on time can be a lot harder, and as a new customers to his suppliers seldom get good payment times, more often then not payment with order

If he got 100K of orders a week after 9 months, Cashflow will be his biggest problem

 

[Mcdougal]

Has he got the money to very early get positive cashflow, It's relatively easy to get sales , but getting paid on time can be a lot harder, and as a new customers to his suppliers seldom get good payment times, more often then not payment with order

If he got 100K of orders a week after 9 months, Cashflow will be his biggest problem

He told me it’s got 8K saved for cash flow. When I asked him last.

 

[MOIC]

I’m asking for a friend.

Are you the friend?

You seem to know every detail. . . .

 

[Frank the Insurance guy]

no recognition or promised bonuses or profit sharing

Was that in writing? If he can prove this was agreed, he could take legal action.

With no formal contract and therefore no restrictions he is free to do what he wants. But he needs to be ready for any legal challenge that may come his way - it can be scary when a letter from a solicitor comes through his door suing him for huge amounts. He needs to be confident that he can deal with the stress that it will cause!

It sounds like he is the one with the relationship with the suppliers, and not his employer, which may be to his benefit - people tend to do deals with people they know, so they may be more inclined to work with your friend and his employer?

Good luck!

 

[Mcdougal]

Was that in writing? If he can prove this was agreed, he could take legal action.

With no formal contract and therefore no restrictions he is free to do what he wants. But he needs to be ready for any legal challenge that may come his way - it can be scary when a letter from a solicitor comes through his door suing him for huge amounts. He needs to be confident that he can deal with the stress that it will cause!

It sounds like he is the one with the relationship with the suppliers, and not his employer, which may be to his benefit - people tend to do deals with people they know, so they may be more inclined to work with your friend and his employer?

Good luck!

That’s what I said to him.

How can an agreement be enforced if no paperwork or agreement was ever signed.

I don’t think any solicitor would put there name to it to send a letter.

 

[Mcdougal]

Was that in writing? If he can prove this was agreed, he could take legal action.

With no formal contract and therefore no restrictions he is free to do what he wants. But he needs to be ready for any legal challenge that may come his way - it can be scary when a letter from a solicitor comes through his door suing him for huge amounts. He needs to be confident that he can deal with the stress that it will cause!

It sounds like he is the one with the relationship with the suppliers, and not his employer, which may be to his benefit - people tend to do deals with people they know, so they may be more inclined to work with your friend and his employer?

Good luck!

As for his relationship, the owners of the company are not pleasant people from what he said to me,

He has gift of the gab and is a people’s person. What I think will help him.

 

[Newchodge]

I don’t think any solicitor would put there name to it to send a letter.

That's not how it works. You go to a solicitor, tell them what letter you want them to write and pay their fee. They write the letter using the proper jargon.

 

[Mcdougal]

That's not how it works. You go to a solicitor, tell them what letter you want them to write and pay their fee. They write the letter using the proper jargon.

Even if it’s just words? What would be the point when there is no comeback?

Surely the person could do defamation counter claim?

 

[Chris Ashdown]

He told me it’s got 8K saved for cash flow. When I asked him last.

Thats a tiny sum to start a business, Say he gats a £1000 order in the first week he spends that on supplies and does not get paid himself for 30-45 days later, he needs to do a realistic cash flow projection including all other costs he will have at startup

 

[Frank the Insurance guy]

That’s what I said to him.

How can an agreement be enforced if no paperwork or agreement was ever signed.

I don’t think any solicitor would put there name to it to send a letter.

Contracts and agreements don't have to be in writing, but it does make it harder to prove if it is just one persons word against another.

Solicitors will put their name to anything for a fee - they will be acting on the instructions of their client. They will likely ask for immediate stop of using their intellectual property/confidential information on their suppliers and contracts etc or they will hold him liable for their losses of £XXXX's!

 

[MBE2017]

Just to add, if his former employer takes legal action, all his savings will be wiped out in the first month or so of legal action.

As people say, this happens all the time, if his employers are not nice people he should expect some pushback. He is an adult.

Being successful in business is mainly about your mindset. Being a smart cookie never hurts, but your mindset wins out 95% of the time.

 

[Paul Kelly ICHYB]

My friend intends to leave his employer, after making them 100k profit a week and no recognition or promised bonuses or profit sharing.

Were they paid what was agreed?

Were they promised any bonuses or profit sharing?

This sort of thing will start popping up even more - "person does job they are paid for and complains that they are not rewarded enough"

Good luck if they do leave and do their own thing, but I am sure that they will be overwhelmed when they realise how much more goes into starting and running a business.

 

[Mark T Jones]

There are significant other questions re your friend's idea.

Specific to this thread - it'd been comprehensively answered

However, they should be on here asking questions about actually running a business; because your assessment actually paints them as a dreamer rather than a sharp business person.

 

[MOIC]

My friend intends to leave his employer, after making them 100k profit a week and no recognition or promised bonuses or profit sharing. As mentioned in his interview. He’s basically taken there market places from 5k a week to 100k a week and website online from 41K a month to 320K

And he hopes to do the above figures with the following . . . .

He told me it’s got 8K saved for cash flow. When I asked him last.

You & 'your friend' need to wake up and smell the mocha!

 

[IanSuth]

When I started out in the factoring game many centuries ago there was one major recruitment company and many of their managers left to set up in competition and a few years later their managers left to do exactly the same thing.

This continued ad infinitum until we got to the position now where recruitment companies are ten a penny

That is SThree's business plan though. Once managers have invoiced a particular amount/target they can opt to start their own firm with SThree an investor and provider of things like aggregated advertising purchasing. Sort of like franchising but in a fairer way. If i remember right the head of Progressive started at CF and tried to resign to setoff on own and the model was set up to keep him in the fold. (i hated the way they worked professionally but as a business strategy you can't fault it)

Hence Computer Futures, Huxley, Real, Progressive and various others

However agencies have been around a long long time, the one i worked for was small and local and dated to 1968, the other big local one dated back to the 1920's. There were loads by the 80's when i was a teenager/student

 

[ethical PR]

He never wanted the employment contract, as he always knew he was going to go away and copy his employer after a few months in so never chased it up etc - he told me if saw it as blessing, so we he could leave and copy without repercussions.

He did negotiate just employer didn’t keep to there promise.

That’s why he’s going to kill their business.

Oh please. He has a verbal contract so irrelevant that he didn't sign a paper copy. He's clearly not that smart if he didn't get his negotiations with his employer in writing is so he could enforce the terms. I highly doubt he's going to 'kill their business' based on what's you've outlined here

 

[Lucan Unlordly]

He never wanted the employment contract, as he always knew he was going to go away and copy his employer after a few months in so never chased it up etc

I think what annoyed him was it’s like the owners don’t never trust him.

It seems the employer is smarter than you think then???