Bad Business: How I Almost Got Swindled & How You Can Avoid It

Today as I woke up I followed my usual routine. The first thing I do each morning is pull my iPhone from under my pillow and check the new texts, emails, missed calls, and voicemails. At first glance, nothing was unusual. 13 new emails, a couple texts, a few missed calls. Since the number of emails was the greatest, I went to my inbox to read them. What I found there was somewhat shocking though not surprising to me.  Apparently I was very close to being caught up and swindled in a business deal with a criminal. This is what happened, and how I avoided it. Hopefully you can take the principles I used and apply them to your own business dealings. I won’t go into the specifics of the particular deal because the principles are universal.

To make this long and perhaps boring story very short and get to the good stuff; the email I received included a report that this man whom I had befriended, met with, ate with, even visited with in his home, was arrested last night in San Francisco after a “nationwide manhunt”.  He had previously been convicted of kidnapping, robbery, grand larceny, criminal possession of stolen property and was out on parole from a 15-life sentence handed down in the 80’s. Many people whom we met with ended up doing business with him, including a very well known actor who is currently starring on a primetime show on ABC, and other business owners around the uptown Dallas area. I ended up walking away from the deal because of a gut feeling but there were 3 principles or “red flags” that stood out and prevented me from conducting any business with this wolf in sheep’s clothing.

1. Stick to the Basics

There are certain “basic” things that I ask for in any deal I’m a part of. One of these things is that before I do any design, video, or consulting work I have a standard percentage that I receive up front. When I informed him, he told me that his “corporation” traditionally pays 30 days after receipt of invoices and went on to brag about how much money he had and blah blah blah blah blah. The bottom line is, if you have certain basic things that you ask for when making a deal, stick to them. He told the same thing to all of his partners and vendors and guess what happened…He skipped town without paying any of them.

2. Deal With Real Numbers Not Percentages

Any time we would discuss money I could never get an idea of the actual amount of money we were talking about. The whole deal was based on splitting percentages of the income. With no projections or actual numbers how could I determine if the whole thing was worth any of my time? There is a certain minimum dollar amount I have set for myself and I will not even waste time on something if it doesn’t meet that. If the numbers don’t make sense to you, don’t do it.

3. It’s All About The Benjamins

At the end of the day, business is ALL about making money. Even though various charitable and non-profit organizations were involved in the deal, when I came to the table I needed to make sure that I would be making my fair share. 3 or 4 meetings about who’s doing what without knowing how much I would make was too much for me. I always make it a point to agree on the money right away and you should too.

I hope these tips are helpful to you. I know that without them I would have been screwed out of valuable time, effort, and an indeterminate amount of money.  If you have any other similar stories or tips, share them in the comments.  I’d love to read about them.