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Tips On A Partnership?

 
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Old 02-01-2009, 05:31 PM   #1
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Tips On A Partnership?


Im in the process of discussing a partnership with a friend. We are not best friends, so its not like going in business with family. We have similar interests in Solar, and are bother Journeyman electricians. I think we both bring a lot to the table, but both with strong points that compliment each
others. We plan on writing up a very professional partnership, and having a lawyer look at it. We have not figured out a percentage, but have discussed 50/50, good or bad idea?

We want to format the company to where if either of us is in the field, we get paid a fair wage, but i will probably be in the field more, and him running the paper side a little more. But both staying involved in both. We will also establish the percentage that goes back into the company, and then share profit. He will probably get the license, being he is a little older, (im 23, and he is 33), but we will put it under the corporations name. Im looking for tips on what mistakes you have made with partners.
We both are very motivated, and realize its hard with the economy now, but we other jobs, and will do this slowly. any advice in general will help, do's and donts, "dont forget this"... you know?
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Old 02-01-2009, 05:46 PM   #2
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Re: Tips On A Partnership?


You gotta ask yourself....
- what is the other guy bringing to the table?
- why do I need him?
- why does he need me?


[more to follow...just getting the ball rolling]

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Old 02-01-2009, 05:53 PM   #3
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Re: Tips On A Partnership?


There is only 2 things you need to know and be comfortable with in a partnership. Who will be in charge and who will make the most money. I have had 4 successful partnerships.

Once those 2 things are figured out and honestly agreed to it is a piece of cake
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Old 02-01-2009, 06:03 PM   #4
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Re: Tips On A Partnership?


Quote:
Originally Posted by rbsremodeling View Post
There is only 2 things you need to know and be comfortable with in a partnership. Who will be in charge and who will make the most money. I have had 4 successful partnerships.

Once those 2 things are figured out and honestly agreed to it is a piece of cake
My rich ass uncle said the same thing!
make he knows what he is doing!
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Old 02-01-2009, 06:08 PM   #5
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Re: Tips On A Partnership?


he has a large network, knowledge in the solar industry, solar design experience.
- why do I need him? -I dont feel like i NEED anyone, you know what i mean? i feel like we can accomplish more, being 2 people, if we properly execute it.
- why does he need me? - same reason
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Old 02-01-2009, 06:11 PM   #6
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Re: Tips On A Partnership?


Quote:
Originally Posted by rbsremodeling View Post
There is only 2 things you need to know and be comfortable with in a partnership. Who will be in charge and who will make the most money. I have had 4 successful partnerships.

Once those 2 things are figured out and honestly agreed to it is a piece of cake
If we work as employees and get paid wages, whoever worked more would get paid more... i think But profit sharing would be where we would make the real money. Do you have advice on how to handle or decide who is in charge? examples? I have heard that 50/50 is tough when someone doesnt have the final say.
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Old 02-01-2009, 06:14 PM   #7
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Re: Tips On A Partnership?


Quote:
Originally Posted by CNC View Post
If we work as employees and get paid wages, whoever worked more would get paid more... i think But profit sharing would be where we would make the real money. Do you have advice on how to handle or decide who is in charge? examples? I have heard that 50/50 is tough when someone doesnt have the final say.
There is no 50/50 some one is in charge and makes more money than the other period. Figure out who has the most to offer even if its not you and agree to terms in advance. IF someone invest more money or has more money that person is usually in charge. Time or working more hours don't count for diddly.

The fact that your posting this means your are the poor one. Learn your place and make some money
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Old 02-01-2009, 06:23 PM   #8
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Re: Tips On A Partnership?


Quote:
Originally Posted by rbsremodeling View Post
There is no 50/50 some one is in charge and makes more money than the other period. Figure out who has the most to offer even if its not you and agree to terms in advance. IF someone invest more money or has more money that person is usually in charge. Time or working more hours don't count for diddly.

The fact that your posting this means your are the poor one. Learn your place and make some money
Ha, i am the poor one! how did this post give it away? I am also the younger one, i have no problem holding a smaller share, just properly figuring it out is what i need to invest sometime researching.
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Old 02-01-2009, 06:24 PM   #9
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Re: Tips On A Partnership?


Quote:
Originally Posted by CNC View Post
Ha, i am the poor one! how did this post give it away? I am also the younger one, i have no problem holding a smaller share, just properly figuring it out is what i need to invest sometime researching.

Rich People know their position from birth
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Old 02-01-2009, 08:06 PM   #10
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Re: Tips On A Partnership?


Another thing is to have an exit agreement so both partners know who's getting what should you decide to part ways.
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Old 02-01-2009, 08:51 PM   #11
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Re: Tips On A Partnership?


don't do it I have had two partnerships; the first was great except we had different ideas about how the bis should grow. the second would have be good but his wife ....... I am not going to give detail you fill in the blanks.

A partnership makes you partner with everyone that has influence over your partner.

Be sure he isn't

A gambler
A drunk
A pot head etc.
A philanderer
A lire
cheap
stupid
in dept (at all)
wanted
lazy
Bad tempered
in love (with you or anyone else)

Ah lets see did I forget anything oh ya if he's breathing you should be extra careful.

Now the benefits well ah there's the ah extra time no no two people cant make decisions faster than one so a partner will slow you down.

But then there's the extra money well not till your established, but then you ah well split the money. So, I guess that you'll make a bit less.

So ok got it you don't have to work alone.

I've been on my own now for three years finally paid off the old dept from the partnership. I have one solid employee and a handful of as needed guys. I will never be in a partnership unless I'm selling the bis.

But it might work for you good luck.
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Old 02-02-2009, 12:11 AM   #12
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Re: Tips On A Partnership?


When I was considering breaking off part of my business, my prospective partner and I were having a difference of opinion. He wanted a 50/50 split. I asked my attorney if he knew of any partnership that was successful on a 50/50 basis. He thought for a minute and said that in his years as a business attorney, he was familiar with one partnership that worked as a 50/50 deal. It was 2 brothers who started in business while still teenagers.

Someone has to be in charge, even if the split is 49/51%.
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Old 02-02-2009, 12:26 AM   #13
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Re: Tips On A Partnership?


Partnerships are great when the money is flowing into the company and both of you are getting a good shake from that, once it slows down, one will feel he is doing all the work while the other is sitting around. And usually the one sitting in the office blames the field guy for all the problems.

I've tried partnerships more than once, never once has it made it to the one year anniversary. I doubt I will ever attempt it again. I have established myself well over the years, yes, I still run the field and do the office myself, quickbooks is your friend!!! and that takes place of the partner!!!
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Old 02-02-2009, 12:32 AM   #14
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Re: Tips On A Partnership?


Tips on partnership,..... Don't
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Old 02-02-2009, 12:33 AM   #15
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Re: Tips On A Partnership?


First, if it's a corp its not a partnership.

Second, I have to agree with the above. If it's 50/50 no one is in charge. My "parter" and I were 50/50 with our corp and biz decisions were hard to come by because neither one of us had the authority to have control. My partner would shoot down my biz ideas, they would shoot down mine. Very frustrating.

We are NO LONGER partners and I'm continuing the business as a sole owner and I'm extremely happy about it. I wish I had dumped the partner years ago. In fact, I'm wondering why I took the partner on in the first place. My biz idea was just that, my idea.

a little fyi... never get a california contractors partnership license. If one of the partners leaves the biz, the license is cancelled.
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Old 02-02-2009, 12:47 AM   #16
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Re: Tips On A Partnership?


Quote:
Originally Posted by CNC View Post
Im in the process of discussing a partnership with a friend. We are not best friends, so its not like going in business with family. We have similar interests in Solar, and are bother Journeyman electricians. I think we both bring a lot to the table, but both with strong points that compliment each
others. We plan on writing up a very professional partnership, and having a lawyer look at it. We have not figured out a percentage, but have discussed 50/50, good or bad idea?

We want to format the company to where if either of us is in the field, we get paid a fair wage, but i will probably be in the field more, and him running the paper side a little more. But both staying involved in both. We will also establish the percentage that goes back into the company, and then share profit. He will probably get the license, being he is a little older, (im 23, and he is 33), but we will put it under the corporations name. Im looking for tips on what mistakes you have made with partners.
We both are very motivated, and realize its hard with the economy now, but we other jobs, and will do this slowly. any advice in general will help, do's and donts, "dont forget this"... you know?
You start the business and hire him.
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Old 02-02-2009, 07:06 AM   #17
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Re: Tips On A Partnership?


Quote:
Originally Posted by curapa View Post
Tips on partnership,..... Don't

ditto
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Old 02-02-2009, 07:47 AM   #18
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Re: Tips On A Partnership?


it also can become a problem when the potential partners have different income requirements,such as say you need health insurence thru the buisness but your partner has it thru his wifes work right ,there you need 10-15k more than him.
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Old 02-02-2009, 09:04 AM   #19
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Re: Tips On A Partnership?


I was in a 50/50 partnership for 4 years thankfully now as of 1/01/09 it is over. The problem I was finding is that I was the one investing the most in equipment & tools and still only getting 50% it worked out pretty good at first but as the years progressed it went sour. Another thing to think about is who has more skills than the other my ex partner had no clue how to lay block or finish concrete but he still wanted his half on those types of jobs. I will never do a 50/50 partnership again!
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Old 02-02-2009, 09:37 AM   #20
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Re: Tips On A Partnership?


Didn't work for me, cost me a lot.
Started 60/40, then 51/49 then at the insistence of his wife we went 50/50.
It was all downhill after that. We never had customer problems or quality issues, everything just stalled and never went forward.
Split 2 years ago, just getting back into my plan now.

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