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Advice Needed

 
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Old 11-23-2017, 09:03 PM   #1
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Advice Needed


I would like some advice about pitching the idea of becoming partners with a contractor that I
have been doing work for. I understand that many partnerships don't end well so I am trying to
be cautious about it.
I have been considering going into business for myself for years now and have been doing side
jobs on weekends while I work up the nerve to leave my day job. I finally quit and have been
working with a friend who is overwhelmed with work. He has asked me to become an employee.
My issue is that I don't want to be an employee anymore. I am ready to make the calls and have
a say in business decisions. He has expressed the need to have someone run the day to day
business while he takes care of bids and paperwork. I also have a strong background in
marketing and web development and he wants me to help with advertising. Up to now business
has been 100% word of mouth. The business is already fully functioning and he has a strong
following of customers close to our location. If I were to partner with him, I wouldn't have to
compete for business and would hit the ground running. Should I take advantage of joining in on
a running business? Or am I crazy for trying to partner with a friend? There are so many
downfalls of having a partner and trying to split costs/profits. It makes me wary to give it a shot.
Any advice is appreciated.
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Old 11-23-2017, 10:54 PM   #2
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Re: Advice Needed


what's your buy in and split?

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Old 11-24-2017, 12:37 AM   #3
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Re: Advice Needed


Here?s some advice....move forward only if he can prove to you that he can replace your full time income. (you know before you f?ed up and quit).
What are you bringing to the table? Have you considered that he has a 5 or 10 year plan that doesn?t involve you? What?s his income? Can you double it while running legit?
Price workers comp for YOU as an owner based off your (hopeful) income and report back. Best advice I got: look before you leap.
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Old 11-24-2017, 01:28 AM   #4
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Re: Advice Needed


I figured I would regret posting here. What made you think that I " f'ed up and didn't look before I leapt"? What do you know about the job that I quit and my financial situation? I quit a soul sucking job ran by corporate that kept me away from my family 90% of the year. I am now happier than I have ever been working oddball jobs. Sure my finances are super tight now but I'm still paying my bills. I never said that I was drowning with my current workload. I'm looking toward my future and planning my next step. Obviously I wont be making a ton of money right away.

I asked a simple question about the pros and cons of partnering vs going out on my own.

What am I bringing to the table or using to "buy in"? A skill set and different take on the business that he needs to grow and expand. An entire shop, truck and trailer full of tools that will double the size and thus profits of the business. Knowledge of marketing and advertising. He's the first to to admit that he needs me.
The issue is weather or not to continue on by myself and make my own way or take on the benefits of a functioning company.
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Old 11-24-2017, 08:32 AM   #5
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Re: Advice Needed


Quote:
Originally Posted by jcurtis View Post
My issue is that I don't want to be an employee anymore. I am ready to make the calls and have
a say in business decisions. He has expressed the need to have someone run the day to day business while he takes care of bids and paperwork..
There ya go. You do the work while he shuffles paper and looks busy.

My opinion is that partners seldom work, unless you have some magic chemistry, because someone ultimately needs to be the boss and make the final decisions.

If you are ready to step out, step out. If you need more time I'd take a manager position for more pay.
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Old 11-24-2017, 08:43 AM   #6
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Re: Advice Needed


Why would he would even do that when he's asking for a competent and skilled employee?

But let's put that aside for the moment...why would you want to partner with him?
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Old 11-24-2017, 09:44 AM   #7
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Re: Advice Needed


I worked with another contractor for a good number of years. Was suppose to be pull expenses and split the rest. Sounds good, not. I was the one that ended up doing out of town work , picking up material , dealing with customers. Also he only like to work 5-6 hours a day, bad back. I got taken advantage of , because I would work extra for the same split, my dumb. Well things went south a few years ago now. Am on my own now , best thing I ever did .

So my take be an employee or work for yourself. Be every wise and careful in becoming a partner. If things don't work out who's business have you been building?
Sure a partnership can work out , just go into it with open eyes.
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Old 11-24-2017, 11:54 AM   #8
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Re: Advice Needed


Quote:
Originally Posted by jcurtis View Post
I figured I would regret posting here....
Wow. Don't be so fast to judge. Just because you weren't given an absolute, definitive answer in 1.2 seconds doesn't mean the answer isn't here. We're not a 24/7 board of paid analysts. We're all volunteers here.


Quote:
Originally Posted by jcurtis View Post
....What made you think that I " f'ed up and didn't look before I leapt"?....
No one said you have. It was simply a warning to make sure you have your eyes fully open before you take any action.


Quote:
Originally Posted by jcurtis View Post
I asked a simple question about the pros and cons of partnering vs going out on my own......
Unfortunately, there's no simple answer. The best we can do is give you advice..... NOT the one single answer that is best for you. That you must decide for yourself.

To add yet another option.... how about going out on your own, yet keep on good terms with this other person and you both hire each other as contract labor on an as-needed basis? You each respect the other's customers as theirs, and you can get the best of both worlds. This is something I do with several other contractors and it works out quite well.
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Old 11-24-2017, 12:38 PM   #9
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Re: Advice Needed


Quote:
Originally Posted by jcurtis View Post
I figured I would regret posting here. What made you think that I " f'ed up and didn't look before I leapt"? What do you know about the job that I quit and my financial situation? I quit a soul sucking job ran by corporate that kept me away from my family 90% of the year. I am now happier than I have ever been working oddball jobs. Sure my finances are super tight now but I'm still paying my bills. I never said that I was drowning with my current workload. I'm looking toward my future and planning my next step. Obviously I wont be making a ton of money right away.

I asked a simple question about the pros and cons of partnering vs going out on my own.

What am I bringing to the table or using to "buy in"? A skill set and different take on the business that he needs to grow and expand. An entire shop, truck and trailer full of tools that will double the size and thus profits of the business. Knowledge of marketing and advertising. He's the first to to admit that he needs me.
The issue is weather or not to continue on by myself and make my own way or take on the benefits of a functioning company.
I was trying to be helpful, I gave you some really good advice. Here is more; donít go into the trades, youíre too sensitive or thin skinned. My sister isnít as easily offended.
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Old 11-24-2017, 12:39 PM   #10
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Re: Advice Needed


Quote:
Originally Posted by jcurtis View Post
He's the first to to admit that he needs me.
The issue is weather or not to continue on by myself and make my own way or take on the benefits of a functioning company.
Maybe the way to approach this is list for us why do you need him? What can he offer that you don't have a can provide for yourself?

Last edited by KAP; 11-24-2017 at 12:45 PM.
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Old 11-24-2017, 12:56 PM   #11
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Re: Advice Needed


Quote:
Originally Posted by Randy Bush View Post
I worked with another contractor for a good number of years. Was suppose to be pull expenses and split the rest. Sounds good, not. I was the one that ended up doing out of town work , picking up material , dealing with customers. Also he only like to work 5-6 hours a day, bad back. I got taken advantage of , because I would work extra for the same split, my dumb. Well things went south a few years ago now. Am on my own now , best thing I ever did .

So my take be an employee or work for yourself. Be every wise and careful in becoming a partner. If things don't work out who's business have you been building?
Sure a partnership can work out , just go into it with open eyes.
Same kinda thing here.

When I had a partner, I thought I needed him. Maybe in the beginning, and as time progressed I still believed he was pulling me along.

When the reality of it was I was carrying him and building "our" reputation instead of "my own" reputation.

When we split, my business grew and his failed. Was the best thing I ever did, going solo. No more partners!

Just my .02Ę
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Old 11-24-2017, 04:04 PM   #12
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Re: Advice Needed


The "Rich Dad, Poor Dad," books have a real easy to understand definitions of laborers, skilled/professional employees, investors, and Entrepreneurs.

To get more then a tiny share of net profits you have to RISK some equity, equity that could disappear in one hour with one bad error...

You'd have to show me as the current owner how giving away a fraction of my valuable business would make me enough added $$ to cover the potential downsides of partnerships( I'd never go straight P-ship, some sort of Corp for better treatment on equity building).

You need a basic understanding of how all levels of Government taxes, fees, mandates, and massive regulations effect EVERY thing a business needs to do to be profitable....most likely your current employer is breaking several federal laws every job now, do you want to share in the penalties?

Is your business dependent upon federal give aways that can be terminated at ANY time, like solar and wind mill welfare checks???

For instance, say your employer was making 10% profit after paying all expenses on your two's work, of 330,000.00$ a year, 30 k$ profit, 150,000$ payroll split 60/40 and 150,000$ materials etc...

The business might be valued at 10X annual profits...thus 'Stock' value of 300,000$, You'd need 150K$ to buy a junior half share......

And if you did, How would the partnership now pay you the extra 30K$ of salary a year with out reducing equity value?
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Old 11-24-2017, 04:38 PM   #13
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Re: Advice Needed


I had a guy ask the same when I was extremely busy building my own day care center.
I had no choice but to accept his "partnership". As soon as I was done with the construction my wife took over and my" partner" got der boot

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Last edited by Peter Goldwing; 11-24-2017 at 04:41 PM.
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