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Advice On Taking On A Business Partner...

 
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Old 08-09-2009, 12:13 AM   #1
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Advice On Taking On A Business Partner...


As I have said in other posts, I went into business for myself in Jan. Right now I am so booked with work, with more coming in all the time that I am looking to partner with another guy on some of the larger jobs. Do you all think this is a good idea? Bad idea? Any input or suggestions would be appreciated.

The individual I am considering is alot older than me, I am 27 and he is old enough to be my dad. He is more of a handyman, advertises as such, haven't seen alot of his work but he appears to be honest and trustworthy. I am very particular about some things, I guess what worries me is that he may not be "teachable". You can teach people new skills, but you can't teach ethics or attention to detail so I hope this will work out.
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Old 08-09-2009, 12:16 AM   #2
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Re: Advice On Taking On A Business Partner...


Quote:
Originally Posted by carpentershane View Post
As I have said in other posts, I went into business for myself in Jan. Right now I am so booked with work, with more coming in all the time that I am looking to partner with another guy on some of the larger jobs. Do you all think this is a good idea? Bad idea? Any input or suggestions would be appreciated.

The individual I am considering is alot older than me, I am 27 and he is old enough to be my dad. He is more of a handyman, advertises as such, haven't seen alot of his work but he appears to be honest and trustworthy. I am very particular about some things, I guess what worries me is that he may not be "teachable". You can teach people new skills, but you can't teach ethics or attention to detail so I hope this will work out.
I remember when I was young and knew everything. Maybe he will teach you a thing or two.

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Old 08-09-2009, 12:33 AM   #3
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Re: Advice On Taking On A Business Partner...


I don't claim to know everything, in fact quite the contrary... I only mention the teachable part as one of the first jobs I bring him in on is about 11,000 worth of Hardie siding. He has done very little with James Hardie products, I have. For this job to be profitable he is going to have to "pick things up" quickly.
In our discussions I mentioned that I have been learning the hard way in quotes and bidding, and unfortunately he has not much more experience in this area than I do.But I do look forward to working with someone who has "been around the block" in life and carpentry more than I have. I am teachable...
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Old 08-09-2009, 12:41 AM   #4
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Re: Advice On Taking On A Business Partner...


partnering up is gonna cause headaches if it's with someone you don't know well/haven't dealt with much. You may be in for some surprises, plus the way it sounds, he doesn't have the skills you need in a partner. If you're looking for someone knowledgable in the trades, that's one thing, but you'll have to learn the business side of it for yourself. Kinda sounds like it's the business man you need though.

Trustworthy, while a good virtue, isn't all you need in a partner. If I were you, I'd work with whoever you're considering partnering with for a few months *at least* before taking a risk with a contract of any kind. Make sure he'll be on the same level/page/whatever with you and that you guys will be a good fit for eachother.
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Old 08-09-2009, 01:15 AM   #5
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Re: Advice On Taking On A Business Partner...


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Originally Posted by carpentershane View Post
I don't claim to know everything, in fact quite the contrary... I only mention the teachable part as one of the first jobs I bring him in on is about 11,000 worth of Hardie siding. He has done very little with James Hardie products, I have. For this job to be profitable he is going to have to "pick things up" quickly.
In our discussions I mentioned that I have been learning the hard way in quotes and bidding, and unfortunately he has not much more experience in this area than I do.But I do look forward to working with someone who has "been around the block" in life and carpentry more than I have. I am teachable...
JK, I hear what you're saying about the Hardi siding.
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Old 08-09-2009, 01:41 AM   #6
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Re: Advice On Taking On A Business Partner...


Hire him or someone, but don't partner. I know of what I speak.
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Old 08-09-2009, 02:35 AM   #7
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Re: Advice On Taking On A Business Partner...


Start him off as an employee unless he can bring to the table resources you can't get elsewhere. hire him and pay him reasonably well on a performance bonus basis to make it worth his while. a 55 yr old over the hill handyman is more a hack than the 18 year old green apprentice.

you can't teach a old dog new tricks sometimes... but you can train a puppy and correct his bad habits. you can't correct a old dog's bad habits..they die hard with their life..hahahaha
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Old 08-09-2009, 02:48 AM   #8
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Re: Advice On Taking On A Business Partner...


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Start him off as an employee unless he can bring to the table resources you can't get elsewhere. hire him and pay him reasonably well on a performance bonus basis to make it worth his while. a 55 yr old over the hill handyman is more a hack than the 18 year old green apprentice.

you can't teach a old dog new tricks sometimes... but you can train a puppy and correct his bad habits. you can't correct a old dog's bad habits..they die hard with their life..hahahaha

The only kicker with that is he is already licensed, bonded, insured and his own business entity. I am not sure if I am ready to take on the extra expense of an employee... I can hardly keep my crap together as it is in the books, bids dept. let alone the added work of an employee. I guess it is almost employee status, he will be working on jobs that I quoted and closed on... I figure I will give him a test run on a deck job I got coming up in a couple of weeks- see how that goes, maybe go from there. You all, slowforthecones and deadhead, have that bad of experiences with partnership?
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Old 08-09-2009, 03:18 AM   #9
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Re: Advice On Taking On A Business Partner...


Timely thread. I literally got a call yesterday from the guy I was considering partnering with. I finally decided to strike out on my own, despite not having as much cash as I wanted, because he made a few questionable decisions regarding his own finances and I started get a bad feeling about it.

Now, a year later, he's calling me looking for work. He spent all his savings on frivolous crap like $800 RC cars with $300 computer chip upgrades, vacations, new cars, and then got laid off. He's been out of work for nearly three months. I'm actually working and have work lined up for several months down the road. I can't thank that little voice in my head enough for going on without him.

As to your situation: yeah, people are who they are once they hit thirty. Work habits, life habits, etc are so ingrained it is not worthwhile to try to change them, it will only end in frustration and disappointment. So you will have to take all of this guy's shortcomings and learn how to deal with them a long with the good qualities.

Why can't you hire him? Yeah it will cost a bit more up front to be able to have employees, but in the long run it will be worth it because you will still be the owner and you will be able to get twice as much or more work.

If he's got a license can't you sub work to him? Or find another one man contractor to sub extra work to?

If you already have concerns about a partnership with this person, then you probably shouldn't go through with it. Listen to your gut. In the end, it's probably right. I'm sure glad I listened to mine. It was a slightly tougher road, but a year later I'm still patting myself on the back for doing so.
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Old 08-09-2009, 03:37 AM   #10
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Re: Advice On Taking On A Business Partner...


[/quote] Why can't you hire him? Yeah it will cost a bit more up front to be able to have employees, but in the long run it will be worth it because you will still be the owner and you will be able to get twice as much or more work.

If he's got a license can't you sub work to him? Or find another one man contractor to sub extra work to?

If you already have concerns about a partnership with this person, then you probably shouldn't go through with it. Listen to your gut. In the end, it's probably right. I'm sure glad I listened to mine. It was a slightly tougher road, but a year later I'm still patting myself on the back for doing so. [/quote]

I am trying to avoid getting in over my skis... I am not the most organized businessman in the world and an employee just adds work to the table. Basically I am going to be subbing work to him, we will both be seperate entities, but if I need a hand with a large job, or get alot of worked booked I will "sub" some of it to him. We will work together and split (55-45???) the coin. I don't have any doubts about this person or his work ethic, etc. But I am unsure of how to proceed long term so it is a win-win for all.

Last edited by carpentershane; 08-09-2009 at 03:43 AM.
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Old 08-09-2009, 03:44 AM   #11
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Re: Advice On Taking On A Business Partner...


Quote:
Originally Posted by carpentershane View Post
The only kicker with that is he is already licensed, bonded, insured and his own business entity. I am not sure if I am ready to take on the extra expense of an employee... I can hardly keep my crap together as it is in the books, bids dept. let alone the added work of an employee. I guess it is almost employee status, he will be working on jobs that I quoted and closed on... I figure I will give him a test run on a deck job I got coming up in a couple of weeks- see how that goes, maybe go from there. You all, slowforthecones and deadhead, have that bad of experiences with partnership?
You said he has almost zero experience with James hardie products. So what's he bringing to the table......his ability to install traditional siding?

If he is licensed and bonded, put him as a subcontractor... NOT a partner. A partnership or JV (joint venture) can mean a bunch of headaches including liabilities increased overhead and if he is a partner in your biz, he can be entitled to a share of the profits. If it's your contractor, sub the install to him or a portion of it. That way if you assist him in it, calculate that into his sub-price.

I've always went into biz for myself, never a partner...if i own something it's got to be all of it..not half of it or a fraction of a whole.
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Old 08-09-2009, 03:50 AM   #12
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Re: Advice On Taking On A Business Partner...


Nooooo... I am not interested in JV, just some assistance from time to time.
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Old 08-09-2009, 04:21 AM   #13
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Re: Advice On Taking On A Business Partner...


Where's wallmaxx when you need him..he's in the state of WA near you... He is a intelligent man.. yo "Capt" where you at?
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Old 08-09-2009, 06:28 AM   #14
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Re: Advice On Taking On A Business Partner...


About 4 years ago I thought I wanted a partner for the remodel side of the business. Neighbor and friend had the skills so I thought I'd try it out on a "probationary basis" for about 3 months before drawing up the legal agreement.

Starting out, I was carrying about 75% of the labor load, and all of the bid/business end. I tried to keep an open mind and thought he'd pick up his pace labor wise and show some interest in the business end. Never happened. After 3 months he decided he wanted to part ways because he thought he was worth more than the 50/50 I was offering. If it wasnt for his mother and relatives he would have starved to death. In the end I was relieved that it worked out the way it did.
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Old 08-09-2009, 07:20 AM   #15
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Re: Advice On Taking On A Business Partner...


Just a caution, from my chair the partnership you are describing comes across more as a misclassified employee. If certain agencies were to look at it and agree with my assessment than you will find that the 55-45 split has not left you with enough coin to cover your defense.

The good news is that you have recognized a weakness in yourself, the book work. Work your strengths and hire your weakness. With your professed knowledge of Hardy siding you would need more of a helper than a partner. For a few bucks a week you can hire a payroll company or accountant to take care of the payroll while you are earning more than enough to pay them. Your helper would earn a wage suitable for someone in training.

For that matter, for a reasonable fee you can take a bag or box of receipts and invoices to an accountant and they will sort and record for you weekly.

A partnership is one entity with multiple owners sharing the responsibilities, risks and rewards.

Sub contractors are easily identified as separate entities contracting with a GC for a specific portion of the work. It's not normal to work on a % split and can be done, but 55-45 doesn't leave you much room for error or profit after expenses.

For example, who buys materials? covers accidental waste? is paying for the insurance on the job? gets the call down the road if something goes wrong? pays for warranty coverage if needed? license is on the line? and much more.

I'm in a long term partnership and will tell you it can work, many others have horror stories. It's not something to enter into lightly or occasionally. Talk to an attorney and accountant for some CYA insight.

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Old 08-09-2009, 07:45 AM   #16
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Re: Advice On Taking On A Business Partner...


Quote:
Originally Posted by carpentershane View Post
As I have said in other posts, I went into business for myself in Jan. Right now I am so booked with work, with more coming in all the time that I am looking to partner with another guy on some of the larger jobs. Do you all think this is a good idea? Bad idea? Any input or suggestions would be appreciated.

The individual I am considering is alot older than me, I am 27 and he is old enough to be my dad. He is more of a handyman, advertises as such, haven't seen alot of his work but he appears to be honest and trustworthy. I am very particular about some things, I guess what worries me is that he may not be "teachable". You can teach people new skills, but you can't teach ethics or attention to detail so I hope this will work out.

ADVICE...Wise men don't need it, fools won't heed it.

First, raise your prices. If you're so overbooked there's a reason.

A partnership is a marriage of weakness. Something is missing....money, skills, experience, an so on. If a business idea is so good, it's worth keeping for yourself.

My grandfather was a partner with his brother (in the 40's) in an appliance business. Every Friday the company truck would be full of gas, every Monday it would be empty. The brother got the truck, my grandfather got the gas bill. There's a lot more to argue about than a truck. You want to buy double of everything so you can have this guy help you with a siding job?

Employees are cheaper than a partner.
Subs are cheaper than a partner.
Consultants are smarter than a partner.
A wife might be cheaper than a partner.
An accountant is smarter than a partner.
Every alternative you can think of is cheaper and smarter than having a partner.

You'll regret being the sole owner once in a while, you'll regret being a partner every day. You don't need a partner, you need a business mentor.

Check out SCORE, your local Chamber of Commerce, and local organizations where you can get some training. Read some books. Everything you can do to avoid being a partner.
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Old 08-09-2009, 08:18 AM   #17
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Re: Advice On Taking On A Business Partner...


no partner, It may be nice for a while, but at some point you will regret this decision
If you are really busy hire some one on a job by job subcontract basis,(Lots of good 30 50 year old carpenters out there looking for work with all the experience you need)
if that is legal in your state.
good luck
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Old 08-09-2009, 09:47 AM   #18
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Re: Advice On Taking On A Business Partner...


Is he bald?

Seriously, I don't like the idea on taking on a partner.
Too many reasons to list. But for starters, having to be accountable to someone else just does't seem appealing.
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Old 08-09-2009, 02:26 PM   #19
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Re: Advice On Taking On A Business Partner...


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no partner, It may be nice for a while, but at some point you will regret this decision
If you are really busy hire some one on a job by job subcontract basis,(Lots of good 30 50 year old carpenters out there looking for work with all the experience you need)
if that is legal in your state.
good luck
over the hill means they're good only for 4 hours of a 8 hour day.
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Old 08-09-2009, 06:01 PM   #20
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Re: Advice On Taking On A Business Partner...


Quote:
Employees are cheaper than a partner.
Subs are cheaper than a partner.
Consultants are smarter than a partner.
A wife might be cheaper than a partner.
An accountant is smarter than a partner.
Every alternative you can think of is cheaper and smarter than having a partner.
Well said...

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