Major dilemma: Should I take this risk?

Ok now I know a certain acquaintance who happens to be a mate's mate's mate (yea, I know how that sounds) whom I don't know in person but do have his mobile number. He is my age - 19.

Now he has a web hosting/design business (don't know if it's registered, etc) and this is all online so no stores. This is doing ok, he does have custom.

Anyway, he is pretty rich/has a rich family and has decided to setup a business selling PC parts – obviously at competitive prices. Nothing unique. Money obviously isn't a problem. He has one store in his area (200 miles up north from me) already or almost setup. He is setting another store where I live. The business will be a LTD.

The situation is, given how he trusts me and knows I have good business knowledge - but no experience - and satisfactory PC knowledge (his is much better), he has offered me a job as regional manager of my area/city and I would be able to earn plenty. He said that I would earn 1/6 of the annual salary, arguably millions. But I would at least earn a lot.

I don't work and I think this is a good oppurtunity. I would be on the board of directors (5 other members, roughly my age, so likely limited business experience) and I am not sure if I have to invest (doubt it as there is enough capital to begin with), but I don't know if I have to take the risk? I could make a lot of money if I take it, but if the venture doesn't work I will be involved (would have signed documents) and if it does and I don't take, I will kick myself?

Whatsmore, I don't drive just yet and the waiting times for the driving test are a few months at least. The shop will be far and in the city centre so I will have to take the car, taking the train will be too long, tiring and unreliable. Too much time taken, and I have my university degree. The commitment is also another problem – I’m being put straight into the deepend with no prior job experience (unless you call work “experience” just that, lol) so you can argue I am not ready for this and I will mistakes.

What I find dodgy is:

1) The 5 other members are my age, and therefore of course their business experience will be somewhat limited - just like me. Shouldn't there be someone who has years of real world business experience on board?

2) I wrote the business plan, but I made it clear to the proprietor of this venture that it was not complete. I requested that certain other members do certain parts of the plan (like breakeven analysis, profit and loss, etc). This never got done so I assume the business plan is incomplete.

3) He said “if you want to take the risk”, so the risk is still a problem there and he knows himself it’s a risk.

4) Apparently, I will be able to earn millions and even a million within the first year – 1/6 of the annual salary, me being the 6th member.

5) He expects to earn billions by 2012.

6) He even said, “it doesn’t matter about business experience, most people won’t turn down the oppurtunity”.

7) I don't know if I have to invest, but if I am on the board of directors I might be obliged to. Of course I will read ALL the small print of any contract/documents I sign. But if things don't work out in this project, I would be involved and in trouble myself, right? Wouldn't I be sacrificed by anyone in this group, for money? I.E. screw me for the money. It's a dog eat dog world and people will try to screw others despite how close they are (even family does it to each other), to save their own skin.

8) The owner has social problems (not that I am involved in them) which has meant he has more than his fair share of enemies who really hate him/wish he wasn't around etc. So they could target his business as given how everyone knows each other and the risk of rumours, they would get wind of his plans.

Is this a risk you think I should take? Money might be worth it, but there could be a lot of problems I can get into. I can’t decide and I’ve only got a few days to decide. I don’t want to take a risk that will make me feel insecure, but if a lot of money is made from this venture for the management/employees involved, I will forever kick myself for not taking the chance.

What should I do? :confused:

Reply 1

34253

Have you met this guy yet?
Ask him if you need to invest...
And why would he choose you to be a part of the business when he potentially has alot of friends where he lives already?
Why would you get 1/6 of the business share for just working without any financial input and more to the point why would he settle for 1/6 of the business share if he was taking all of the risk?
Get all that set and then jump in if your sure

Reply 2

viviki

My advice you'd need to make sure you got a decent business advisor to read the business plan etc and make sure you are definitely onto something before you get involved.
Definitely get individual legal advice about your role in the company and the terms of your contract and the set up of the company if you are going to be a director or investor.

Reply 3

-Blade-

Thanks for the advice, I will follow it up. :smile:

Reply 4

still_ill

This is is a bit of a dodgy situation, and I highly doubt he will make billions, or millions in the first year/ few years. In fact most small businesses fail completely. And also agree with first poster -why would you get ANY share of the business if you are not investing and only working there? Employees only get salaries.

However despite this I'd still recommend you try it anyway, jump in get involved. Even if you fail, even if you lose hundreds of pounds in it you will have invaluable experience. Entrepreneurs all need some failed businesses under their belts. You'll learn a lot and also it looks fantastic on a CV.

The money isn't the point, the experience will really serve you in the long run if you know how to use it.

Major dilemma: Should I take this risk?

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