Hidden Key (1958)

[Music] doing this today involves the element of chance because there are many risks since the day I went into business for myself I've always kept this gadget on my desk to remind me of the gamble in doing business it's helped me to find the hidden key to the survival and success I say gamble in doing business because of the risks involved risks that maybe you haven't thought about lately the risk of the availability of working capital is present in the small as well as the expanding business there are many influences from the outside that become risks from the inevitable high taxes to the important job of timely deliveries the problems of product obsolescence increased comp reduced profit margins all involved there's the risk of getting and keeping proper personnel these and many more risks are involved in doing business today however there is a factor that takes much of this gamble out of the business and that's the human element the most essential element to business success this trio is that human element with ambition and ability and teamwork this is Walter with a knack for overall organization and thorough handling of details he has good connections at the bank I wouldn't worry about it either of you I'm sure we'll get the loan this is George an expert on any production problem with his easy smile and quick humor he's very good at handling employees just give me one more lathe and an operator yes the team had to mr. insides and Bob mr. outside a good mixer hello handicap golfer and the best contacts in the field plus the ability to follow them up and make sales and all I have to do is get the business and if you don't Bob will give you this take it from me three men like that make quite a team I'm bill Edwards and since I believe that next to knowing your own business you should know the business of your competitors I can tell you quite a bit about Bob Walter and George they're our top competition they became partners because each man's talents and personality blended into a fine working combination after the usual growing pains they incorporated to avoid unnecessary income taxes and to limit their personal liability let me tell you what happened a hard to beat team these competitors of mine always moving ahead Walter it swung the loan at the bank and they really got busy they weren't afraid of work and we're often hard at it far into the night since their families were close friends they could combine business with pleasure well see Bob Ruth go late this afternoon said she couldn't get all of Mary today she wants you to ask her about the barbecue Sunday at our house George Hamilton coming we are you see who's boss at his house well maybe we ought to have the wife's boss the outfit yeah I can see that they know as much about running this business as we do about cookie Oh which reminds me Walter are you planning to cremate the steaks again please well they're not that now don't worry George I have a brand new system yeah but I got the same old stomach working together as a team these three men did all they could to take the risks out of doing business they had protection against many types of losses they insisted on careful maintenance to keep equipment in top condition good working surroundings and benefits kept employees happening and yet they gamble they gambled on the most important business asset the human element where's Bob he's half an hour late you know he looked kind of sick out at your house yesterday right after those steaks oh now my cooking wasn't that bad yes my wife sure put her on hello Ruth wait a minute wait a minute I can't understand you you said that Mary called are you sure all right dear we'll be there right away what's going on Mary just called Ruth Bob's had a heart attack what Bob's dead Oh I'm I can't believe it I told Ruth we'd be right over and so they learned about another gamble in doing business well as you can imagine it was a rough shot a firm cannot stand still it must move constantly forward the loss of Bob meant a loss in momentum replacing immediately would be impossible besides a new man wouldn't have Bob's contacts it would have to do it all themselves things were happening that worried both men that important feeling of confidence was fading and it didn't help to have Outsiders worry to both creditors and customers were wondering what arrangements had been made to carry on the business well of course we're going to miss him but we're going ahead full steam you know the old saying no man is indispensable okay thanks for calling Walter there a couple of things I want to check with you on and both are bad no doubt yeah I'm afraid so Henry just gave me his notice oh no he's the third one to quit why I couldn't get much out of him I think he's worried about our situation boy it never rains but it pours which reminds me I thought you're gonna check on that complaint they were a good account I haven't had time I never have time to do anything right yeah I know me too Walter do you think we can go ahead of course we can we've got to what about Mary we've always said the families could look to the business for help if anything happened to one of us we'll straighten things out with Mary later right now she has Bob's insurance we have enough to worry about I'm afraid we'll have to consider it now Mary's lawyer called he's handling Bob's estate and he wants to know what sort of financial arrangement we plan to make with her why can't we settle out with Mary do we have to deal with him the estates and probate and he's handling Mary's affairs that's all there is to it he wants to see us so I said we'd meet with him I suppose that means money we can't be here Bob salary well we don't even have anyone to take his place she couldn't George I'll tell you right now as far as we are of Mary we can't be expected to do all the work and split equally with her when she can contribute nothing well of course Walter but don't you feel we owe it to Bob isn't there some way we can take care of Mary without wrecking the business you name it I guess the best would be to buy her out with what whoa how about out of future profits that's possible if she can wait and providing we could agree on a price with Mary and her lawyer if we can't it's a sure thing she'll be thinking about selling to one of our competitors do you really think Mary that to us legally she can sell to anybody she wants to wherever she can get the highest price with the stock but I don't think Mary had do that I wouldn't be too sure of that George if she doesn't think of it you can better liar well we ought to be thankful we're incorporated if we were still a partnership she could have the court forces to liquidate we should have had an agreement we should have had an agreement with her father said yes a simple buy and sell agreement made when all the partners were alive would have eliminated what the to face now it would have removed the fears doubts and confusion they now feel you see such an agreement would abound marry to sell her interest to the corporation or to water and George it also would have required the corporation or Walter and George to buy it would have been a different story but then of course every story has two sides Bob Widow Mary was shocked to discover that even though he had nearly $40,000 of life insurance after paying doctor bills funeral costs and probate expenses plus inheritance taxes the amount she had left to last a lifetime for her and her children was less than Bob salary for one year Mary's lawyer was not interested in sentiment but in a fair settlement for his client and soon Mary I know how you feel about Walter and George you don't wish to press them but you simply must face facts now let me see if I can summarize what we've been talking about for the last hour or so rather confusing I know but it's most important now we should demand that they buy you out in cash at a fair price now we shouldn't accept terms because without Bob there we could never be sure if you're getting your fair share they would be getting the benefits of all the profits of everything goes well if it doesn't you would be the loser now Mary they're gonna get everything they can out of this business if they see that it's going under I believe me even though there were relatives involved my advice is still the same get your full and fair share of this business now I suppose you're right I know I am now if they can't pay a fair cash price we can insist that they give you an equal salary and an expense account or will threaten to sell to a competitive well that's a possibility I should think it's a good business what we can take them to court and force them to pay dividends make them justify every dime of salary and expense money that they draw we can question every move they make after all are our laws to protect the minority stockholder they're my friends and no marry it's difficult to tell what people will do when they're in a tough spot and believe me they're in one but in all fairness to you you must realize that your position is not a very happy one either Oh what do you mean I thought I owned one-third of the company I've always told me the business would take care of me and the children now if this were a partnership we could demand liquidation or a complete reorganization but Mary since it's a corporation they can legally at least attempt to continue but where do I fit in the picture well you are a minority stockholder with no control and there was no agreement that required them to buy you out and frankly I don't think they could buy you out on any basis that would be satisfactory to us can't they just pay me cash Austin Oh Mary there is no cash like any other growing business their cash is invested in the firm well then couldn't they borrow it no I'm afraid they couldn't borrow any more now under these conditions especially with our bar I wish I could take Bob's place what did you mean about selling to a competitor I would like the letter words oh but Mary remember it's it's only a threat actually who would want to buy a minority interest in the business situation like this and then what kind of a price I see what you mean well then how about dividends I thought when you won't stock they paid you in dividends well that depends most closely held corporations don't pay dividends Walter and George will certainly not want to pay dividends if for no other reason than to avoid double taxes and much other take it in salaries which are deductible by a corporation and remember they have majority control yes I know no Mary I'm not saying that they'll do this but I have seen it happen before the owners will bleed the company of all earnings in the form of salaries and expense accounts I can't believe that Walter and George would do that Mary with them having majority control and with the business needing cash I'm afraid we'd have a hard fight forcing them to pay dividends anyway you probably wouldn't get enough in dividends the children deliver you couldn't count on it for future income I just can't understand it Bob always said the business would take care of us in case something happened to him that's why you've worked so hard how we did without so many things at first to build a business now Mary try not to worry that's why I've called this meeting with Walter and George I guarantee we'll salvage something for you excuse me yes oh I have them come right in please now Mary try not to let your emotion slave this is more than a business meeting the future of you and your children hinges on what happens here you just let me handle it a lifetime is at stake for Mary and for George and Walter the attorney will insist on a price and cash George and Walter will try to save the business which needs all their cash their careers are at stake the important meeting began and it soon became apparent they were working at cross-purposes [Music] after all it was an almost impossible gamble that they could reach an agreement with such sharply conflicting interests [Music] it's strange how old friendships can be wrecked so easily and so disastrously they tried all of them try but there just wasn't any answer when Walter and George walked out they closed the door on their hopes and dreams it happens every time if only they'd made a simple fair agreement well bob was still alive all of this could have been avoided well it's too late now [Music] [Music] [Music] yes there's the really big risk to this gamble of doing business those three men were our top competition and when my partners and I saw what happened we realized that the whole tragedy could have been avoided if the three of them had made a suitable agreement so we started looking around for the answer that would solve the problem for us the experience of Bob Walter and George showed us what the hidden key really was a binding agreement and most important of all the money to fund it my business is different because I own the majority of the stocks and my partners are in a minority position we not only have their problems but the additional one that if I should die first my partners would have the burden of running the firm without control or power of decision an impossible situation just how much would my stock be worth to my family then well the agreement was easy all we had to do was approximate the value of our interests and reach an understanding the problem was money where was it to come from fortunately we found a way to guarantee that the money would be available when needed we'd never have to pay it back nor would we have to take it out of our business at that time our plan works this way here are 100 pennies representing one full dollar of the purchase price we agreed to deposit three cents in this first year and if our agreement becomes operative we would receive the full purchase price 100 cents on the dollar tax-free it would have cost us just these three pennies if the agreement is not used until say five years we will have paid in only fifteen cents for each dollar required and even in 20 years we will have deposited only 60 cents for each full dollar during all this time a large percentage of these deposits will be available to our firm for our business use or emergencies and if by chance we never need the money for this agreement and we all live to old age a large part of these deposits can be used for our retirement what really tickles us is that our creditors and our bank are just as pleased with this plan as we are now you may be wondering where we found this hidden key well it was handed to us by an insurance man who understood these business problems and fortunately we were all able to qualify medically I suppose this doing business that life itself is a gamble but it's a sure thing that you or your family sooner or later will be on one side of the other of this inevitable conflict why not make use of this hidden key business life insurance in order to assure the security of your two most important responsibilities your family and your business