Private Fitness, Llc

Private Fitness, LLC

This is a case study regarding a business owner with a very complex dilemma. The dilemma becomes even more complex when you have to deal with a managerial decision that includes emotions and friendships, but also well have an effect on the daily operations of the business. The business owner have just became aware that one of her long-time friends, health fitness instructor, and office manager have been conducting business in a very dishonest and unethical matter. Just to keep everything in perceptive I will name the business owner Rosemary and the best friend that was dishonest Kate. Now Rosemary have to decide what do to about Kate and her dishonest and unethical behavior.

        The business that Rosemary opened is a Private Fitness Club and she is the sole owner of the business. Rosemary hired Kate as the office manager with duties including marketing, facility upkeep, scheduling appointments, and record keeping. Kate also was one of the instructors and teaching classes. Kate was paid a salary plus commission.

        Before going into business with a long term friend or having that friend run the business for you, you need to conduct a very extensive due diligence to ensure the success of the business. Conducting business with friends can be a tricky and/or sticky in some situations. Business owners that are willing to hire friends to run the daily operations and be responsible for the revenues and accounting for the business need to have a clear knowledge of that friend intentions and have a common set of expectations, similar work ethic, integrity and high level of trust between each other. Will Rosemary see Kate actions has an employee that conducted theft and address the situation as employee theft or did Kate just make a dishonest mistake?  Kate promised Rosemary that she will never act in an ethical matter or be dishonest again. This is the dishonest act that Kate did, she was conducting a training class with a new private fitness client she was conducting the class between 1:00-2:00 p.m. on Monday, Wednesday and Friday. When Rosemary check the accounting record and did not find any record of the revenue being record for the new private client. Kate admitted that the client was paying her in checks made payable to Kate and not the business. Kate admitted that she offered the new client a discount and in exchange they paid Kate directly so Kate never record the revenue for the business. Kate stated she was very sorry for the dishonest and she will never do it again, but that is not the only discrepancy or dishonest act that Rosemary found in regards to Kate.

        Now Rosemary is faced with the fact that she may have made a mistake by hiring Kate as the office manager. But looking at employee theft she have to remember that this could happen to anyone because human behaviors can be unpredictable no matter how well you think or feel you know another person. Business owners who trust their long-term friend to work as their office manager sometimes discover that they have made a poor judge of character in regards to that individual. Even if Kate plan to pay the money back or to show the revenue in the books and have the best intentions to correct the dishonesty it seem to never work out that way.