Any Imput Greatly Appreciated!

Drywall1

After being in business for 12 good to great years, I am now going into a partnership. Let me give you a little back ground.

About a month ago I got wind of an opportunity to try a new stucco product out and was rather busy with drywall. So I gave the opportunity to my high school buddy, (that has his own drywall co. 7 yrs). In the past month I have gotten rather slow and had the ability to work on a few of these stucco job with him. It is a great product and from what I can tell it is really gonna take off in the coming years. Sooo of course now that we are getting quite interested in getting serious about this venture, the drywall business is really starting to pick up.

So we have decided to join forces form a corporation and hire a couple more guys and git r done

We have very complementary skills when it comes to business and we have no problems with communication. My question is ...........
1. Anyone with any experience give me your take on this

The past week we have talked with insurance and lawyer guys so we can get everything agreed upon before starting and also an exit strategy worked out, so if things don't work out, going our seperate ways won't hurt as much.

I am very interested in all imput and personal experience. Thanks

Oh and if anyone has any great company names for guys doing stucco and drywall let me know.

Nate

__________________
Krieser Drywall
Krieser Insulation
www.KrieserDrywall.com

Sonny Lykos

Partnerships are generally entered into with a highly unrealistic, yet entusiatically attitude. I had two, of which one worked out good and the other didn't.

There is far too much that can be said in terms of pros, cons, how to prepare, what to look out for, etc. I suggest you go to www.inc.com, fastcompany.com, oter business web sites and type in "partnerships" in their own Search section, and start reading.

This will getyou started:

http://www.inc.com/cgi-bin/finder.cg...y=partnerships

There are 964 articles (some dupliates). Here's just one:

http://www.inc.com/resources/office/...partners2.html

joasis

The best partnerships seem to work out among "non-friends". And you do need a buy-out/sell-out agreement before you sign up for anything. That way you are both protected and have something besides a walk away agreement. When a partnership ends, it is like a divorce, you can be friends, or it will be a nightmare. I am 45, had one partnership, and learned from that to own 100% of anything I am financially involved in. I have never seen a partnership survive long....maybe an incorporated business with equall stock ownership and joint assets, but not a partnership.

Sonny Lykos

OJoais is right. You migh also consider a strategic alliance. Both of you can own a separate part of that it takes to run the business. For example, a sales corp, and a production corp.

http://www.strategic-alliances.org/

Patty

Create a policy where both signatures (yours & his) are required on the checks you write. How is your partner with money?

Keep spouses OUT of the ENTIRE business. Don't even let them do office work. If a divorce ensues with one (or both) of you, be sure to protect the business. Talk to a good lawyer.

If one of you dies, arrive at an agreement on what happens, i.e., remaining partner has first right of refusal on buying out the widow. Otherwise, you just might end up with 'the wife' as your new business partner.

Just my 2 cents worth. Have experienced my share, in this area. Would be very skeptical about ever having a partner again because of my experiences.

Sonny Lykos

You all realize that poor Drywall is/was all excited about his new venture like a kid opening up a new toy at Xmas, and here we are bringing a rainy day upon him.

Sorry, Drywall, but experience is what these forums is all about.

joasis

Let me add one more thought that may work for you: I had a guy I worked with, matter of fact, trained him in the business. He wanted more then a paycheck, and I wanted to not be liable for his taxes, ect., so he formed his own company. He works for my company 97% of the time, but has a seperate identity, and if he chooses, can go after all the work he wants on his own...I don't have a real partner, and in reality, it is a great arrangement. I own the big equipment, and charge him for its use and pay him a set rate based on estimates, not actual time..win-win deal.

Drywall1

Thanks for all your imput and I respect those of you that have said to run away from this venture.....but within the next month we have 100,000 sq ft of drywall to do so we are going ahead with plans. I'll be sure to tell all of you how this goes, good or bad.


Aren't there any of you out there that have a good partnership?



Nate

__________________
Krieser Drywall
Krieser Insulation
www.KrieserDrywall.com

Sonny Lykos

Let me be the 1st to wish you the very best of luck. Work at it to make it successful.

Sonny

Mike Finley

Who's going to be the majority stock owner? Please don't say we will both own it 50/50. No matter what reason you can come up with there is no good reason to ever have a 50/50 ownership. No matter how you want to look at it no two people are perfectly equal no matter how much your friendship will cloud the thought process. I am guessing you are both keeping your other businesses separate and are forming a 3rd together? If that isn't the case, why do you suddenly feel the need to form 1 with him?

Mike Finley

It all depends upon your measuring stick. Divorce in America has an astronomical failure rate, but it is nothing compared to the failure rate of equal partnerships in business.