ECN Forum Forums General Topics of the Trade Business Related Discussion Hard topic...partnerships

I hate to be the only negitive person here but a partnership can be a bad thing as I have learned in the past. Actually it was a S corp split 50%.

It's like being married. Are or were you married? No 1 person has all control or makes a final decision. Eather of you can do what you want.

What would you do if your partner suprised you with "I decided I needed a new work truck so I got a loaded.." with the last of the cash? What would you do if you found your partner was just doing side work and had no work for the company. Or even worse using company accounts to buy that material. What to do if your partner gets lazy and sloppy? What if they turn out to be bad dealing with customers? Who dicides how much you will spend on advertising. How are you going to base your income. What if they don't put in all the extra hours you do? Will you want to work weekends if he can't even if you get paid the same.

Some people can change a bit in attitude between being employed and being an owner. Even if you worked a few side jobs with him the attitude may not be the same.

You may say we will just talk and make decisions together. That does not work so well when your biz is short on cash, and there are disagreements and other problems.

The difference if an emploiee has what ever problem you still can get rid of them. An emploiee does not make the final decision.

Like said before you may want to have 2 seperate companies. Have agreements to share advertising, work jobs together and what not. That way if problem you can walk away from him when the job is done.

Or you could try to hire him. But then you would need much more capital.

If you do a partnership ask an attorny about setting up a buy sell agreement. That way if does not work out you allready have it figured out on how to handle it.

Tom

saint,

You say your prospective partner isn't greedy. That's good and counts in his favor, but some other traits I would deem extremely important are: is he disciplined, does he have integrity? Also honestly assess how how you rank with these qualities. We all have thses qualities to a degree, but two partners should have a little more than most.

By discipline I mean the standard get up on time etc.. definition as well as the ability to seperate your emotions and ego from the situation when needed. As with all relationships between people, emotions untempered can blow a situation out of control, and feelings and expression tactfully reigned in can salvage and move forward constructivly.

Also as far as integrity, I'm talking mainly about doing what you say. That can be as much follow through with what you commit to as well as knowing whe not to commit (again restraignt and discipline).

Just a couple more things to keep in the back of the mind as you dwell on this.

Dave,

I am very grateful for my brother. If I can teach my kids to be friends and take care of each other to get the many-fold pay-off I have, as crazy as it sounds, it makes me consider having more, just to give that to them. But then I know plenty of large families where it doesn't go so smooth, so maybe the answer isn't in the numbers.

[This message has been edited by Jps1006 (edited 12-01-2005).]

Sincerity, is NOT always the same thing as reality. You may have located a potential partner who is sincere about honesty, integrety, and appears to be hard working, but he may actually not be any of the above when it gets right down to it. Tread careful here my friend.

Well I am taking a measure of caution.....The two small companies are staying seperate.We are dividing the metroplex. The only thing we are sharing is the marketing and labor pool. And coming together on larger jobs. Tax Id's seperate....Insurance seperate. Who pulls what on the bigger jobs depends on which side of town it is.