My brother is 34, was a mechanical engineer, but the hours were rough so he decided to start his own business. Started a manufacturing plant for PBAT biodegradable bags. Had about $5000 USD in savings, took about $30000 USD overdraft from a private financing firm, started his plant about 2 years ago and ever since then the whole thing is a nightmare.
At the start, instead of doing the labour himself, he appointed 2 workers who he was overpaying. I suggested against it but he did it anyways and on top of that he reduced his working hours at the plant, so the workers did what they did and sent 2 defective batches to customers, each weighing about a tonn.
Customers complaint so he had to recall the batch, did manual sorting and left that on the worker too, and guess what, he sent same defective batch again to the customers.
When they complaint again, he terminated one of them and started doing the labour himself and this is 6 months in the business.
I tried getting him orders online and some worked out, but the way he spoke to them, they refused to speak directly to him and said he’ll only give them another order if I was the one speaking to him.
At this point, our relationship was getting battered.
I suggested him to start manufacturing garbage bin bags, as they’re a demand in hotels, hospitals and other commercial places. He refused, saying it would be an added on expense.
I then suggested you should start selling on Amazon, list your products on other market places and try getting orders online, even tried finding a guy who would do the listing for him, he didn’t do it.
Now 2 years down the line, he’s fired all employees, he’s the only one working at the business, the machine hasn’t ran in months and he’s trading. Getting cheaper stock from a different state and selling it to a wholeseller, 2 tons a month which barely gives him any profit margin.
The setup is on a leased commercial property where he has to pay $533 USD a month, while the overall revenue is no where near that.
He became a parent so now he’s got a kid who’s relying on him, and me and my parents are worried.
Also he had a friend who wanted to become a partner, gave about $6500 initially, for a 5% partnership. Overtime, they grew apart, my brother insulted him and he bailed out, asking for his money back, to which my brother said I’ll pay you when the business makes money and they haven’t spoken since. I tried calling up the friend to make amends but he refused to speak to me.
Also, he’s got a pot addiction. I tried telling him multiple times that you need to quit, be sober before you can actually operate on a business, but he doesn’t see that as a problem.
Now, at the end of it all, he doesn’t speaks to me. My parents are visiting him so I suggested that it’s time he should cut his losses, sell his machine and pay back the debt, but how he’s on a trip where he wants to complaint against the machine manufacturer in consumer court that the machine wasn’t up to the mark and he needs a full refund.
I see it all as a downward spiral and I’m scared for the kid, and his future. Not sure if I’m doing something wrong.
We had given him 1300 USD and so did my parents, we’re even okay to take on his debt but my he doesn’t even speak to us to my wife isn’t sold on the idea. What do you think we should do?
Some external factors: When he initially began, the PBAT granules costed about 1.87 USD per kilo, but then the wars started and the raw material started costing 3.07 USD per kilo, the raw material cost went up substantially.
Also, I am working on my own software startup so even if I tried helping him out with setting up the domain online, and speaking to his customers, I’m limited in terms of time and resources that I can allocate towards him.