Sunday, February 16, 2003

I don't mean to keep harping on George here, but the problems with George and our client last summer just ended up costing us some money in the form of a pretty big refund/discount to our client. ("Five-figure big" actually, which is very large, considering I've never given a refund to a customer before.) 

I think what helped drive this is that we're a little late going live on our project, but what concerned the customer more than being late was that we were over budget, and when push came to shove they kept bringing up the problems from last summer, when they said a lot of money was spent and we made little visible progress. I've come to like and respect these people, and beyond that I'd like to keep their business, so offering a refund/discount seems like the right thing to do for our long-term relationship.

So after several meetings and some research into the situation, the client and I agreed to a "refund" amount. As I was talking to my client I kept bouncing my thoughts on Jack and David. They both suggested not saying anything to George because he may be feeling a little wounded by a problem with another client recently.

What's rumbling through my mind tonight is if/when it's going to be a good idea to make George a Class A Partner. If I didn't mention it before, the reason for this concern is that there's one other difference between a Class A and Class B partner in our Operating Agreement: It's harder to get rid of a Class A partner if I ever need to. With a Class B partner, I can just give them their money back and essentially take their stock away from them, but with a Class A partner that process is much more involved, and could involve business valuations and lawyers.

I also have to wonder what would have happened if we were in the process of selling the business to Rob and his financial backers, and this came up. No doubt it would have complicated the sale just a bit. Well, nothing to worry about there, as we haven't heard any other news from them, but I'm hoping that we'll hear from some more potential buyers soon.

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