Anyone Ever Done A Joint Venture?

djamesatl

Have any of you ever done a joint venture or know how one should be structured? My problem is that I need more of a commerical portfolio to close the deal. My exp. is in commerical work, but I'm not established enough. I can manange and staff the job. I would like to know about percentages, if the other party is just a figure head so to speak. Thanks for any help.

thom

I did one 25 years ago. It was a verbal agreement between me and the other guy. It was his job but he felt he couldn't do it. Knew I could. Big commercial pool (that was his business) and racketball courts (my business). Per our agreement, we did the whole job, on my contract, my books, paid everyone else, then split the remainder 50-50.

Aparently he has something you need. Don't go cheap or try to chisel him. You might not make as much until you get up and running on your own, but the extra $ you give him will be of little consequence over the years.

Diesel65

Really neither party is a figurehead, you can structure your contract to allow for any percentage for either party, ie You 70% him 30%, but that would mean that legally he is liable for 30% of any overcost's as well as 30% of the profit.

If he will take 5% just to lend you his name then good for you, but remember it his name you are using, so that put's pressure on you not to screw up, just remember that they will go after him for 5% if something goes wrong, so unless he is a good friend of yours I doubt he will go for it.

I have done this several times in the past but gone 50/50 on the percentage's it keeps both parties head in the project, and it gave me my start in the industry.

I have mentioned this before but I am only a HUGE fan of AGC contracts, I am not even a member, let alone work for them.

They have a very good JV contract.
Good luck with the project

mikesewell

djamesatl,
If you are both reasonable, honest with each other, have the same agenda, and the job is profitable with no litigation, you should do fine. Sounds easy, but that's a tall order.

Percentages? Easy, LOL. Make sure that the profit and liability are shared fairly. Every project is different, every partner is different.

Most of all, this business is about money, respect, and pride. If everybody makes lots of money, gets lots of respect, and can walk away proud at the end, then everybody should be happy.

I've had quite a few good experiences with joint ventures, and only a couple of bad ones. I can tell you this, the bad ones are bad.

Best regards,
Michael

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Commercial construction

Sewell Construction