In four months, Americans will decide whether they want Donald Trump to be their President. For small business owners, however, it’s customers who affect their daily lives far more than Washington politicians. So before you consider what Trump would be like as your President, consider this: what would Donald Trump be like as a client for your small company?
“I sent a bill. It wasn’t paid,” said Andrew Tesoro, a small architectural firm that was hired by Trump to design the clubhouse for a Trump golf course.
Last week, the Hillary Clinton campaign released a video featuring Tesoro relating his experience with Trump and his organization.
After having his work applauded by Trump himself, according to Tesoro, Trump’s people offered him about a third of what he was owed. He reluctantly accepted. That wasn’t paid either. When Tesoro finally met with Trump, Trump bullied him with a ‘take-it or leave-it’ offer of just half the already-agreed-upon lower amount. “Mr. Trump’s attorney said that if I were to sue the Trump Organization, I would probably get that money, but he made very clear to me that it was his job to make sure that it took me so long and so much money that I was probably wise to accept this very meager sum of money…It almost put me out of business.”
Tesoro is not alone. While Tesoro chose not to go to court, USA Today has been conducting extensive research into lawsuits in which Trump and the Trump Organization has been involved. To date, they’ve identified a whopping 4,055 lawsuits.
Trump asserts that lawsuits are just a natural part of doing business. But few companies are as litigious as Trump.
Of course, some lawsuits are inevitable, especially in a business serving the public, like real estate. There are inevitable “trip-and-fall” lawsuits and suits against dead-beat tenants. But according to “USA Today” analysis, Trump and his company were involved in more lawsuits than five top real estate moguls combined. And in many, he was being sued for non-payment of fees or wages.
That’s a whole lot of lawsuits. In fact, what emerges is an inescapable pattern: Trump uses lawsuits and the threat of lawsuits as an intentional, bullying, business practice.
“Smart people avoid lawsuits at all costs,” said Trippe Fried, a New York-based attorney serving entrepreneurial companies. “A lawsuit is an inefficient way to accomplish a business end. It’s the hallmark of a poor business man to use the litigation system unless there are no other viable options available.”
Moreover, Trump’s company has declared bankruptcy four times, and bankruptcy is terrible for a company’s small business vendors. I know how that feels. In late 2006, the distributor for my small publishing company declared bankruptcy, and it’s a terrifying and expensive experience. I also learned that bankruptcy is a heavy-handed strategy often used by unscrupulous business people to get out of paying people what they’re owed.
The best business – ethical business – depends on relationships and trust. Especially for a small business owner, who can rarely afford the time or immense trouble of a lawsuit, a contract or a deal is only as reliable as the people involved. Trump does not appear to be trustworthy in his business dealings.
The best business relationships are designed to be win/win. That doesn’t appear to be Trump’s way of doing business, either.
“Because I was the little guy, he was winning and wanted to keep winning,” said Tesoro of Trump. “His definition of winning is making sure the other guy loses and that way of doing business is just not very fair to the little guy.”
Hasn’t Trump’s success proved he’s been right to be so litigious? No. In fact, it may have cost him a fortune. Remember, Trump inherited his money to begin with. Investment analysts, including “Fortune” and others, have estimated that if Trump had just invested his money in an unmanaged stock index fund, he’d have made billions more. In other words, Trump would have made more money if he’d just gone golfing instead of building golf courses.
Watching the unfolding reports of Donald Trump’s practices in business, here’s the advice I’d give any small business owner: don’t do business with Donald Trump.
Copyright, Rhonda Abrams, 2016
This article originally ran in USA Today on July 13, 2016