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Business partner: big cons, big pros?

Biff_Loman | Posted in Business on January 25, 2009 05:00am

As some of you know, I’m an extremely happy employee, and am looking forward to years of employment in my current position. Not jumping ship, no way no how!

That said, I often wonder about my future five, ten years from now.

I think there are many people like me here: heads for solving technical problems, not so much for business. Through discipline and desperation, maybe it’s possible to morph into businessmen.

It’s like I’m allergic to paperwork.

There’s a particular individual I have in mind. We get along very well, he’s not afraid of hard physical work, but doesn’t have what I would call a technical mind. He’s what I’d call “people smart.” Natural salesman and is a demon for paperwork. He’s also in a transitional period in his career, probably wonders about his future, too.

There are a lot of people who are opposed to business partnerships on principle. I can see why. My father has had business partners, and they can cause a world of grief. But I see a world of potential in the concept, too. I strongly doubt that I’ll ever be as good at EVERYTHING as I need to be.

Let’s talk about the pros and cons.


Edited 1/25/2009 9:03 am ET by Biff_Loman

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  1. 3kings | Jan 25, 2009 05:08pm | #1

    having been involved in many partnerships that have all gone bad i would warn you against it.in the end it has always come down to the division of labor and what every one thinks their specialty is worth.i am currently moving towards the idea of running solo but having agreements w guys i know in the same boat to pay each other for labor as needed then there is only me to answer to. also i don't know as i would want someone w out the tech. know how selling jobs that i would have to make work been there done that just my 2 cents
    Noah

    1. MikeSmith | Jan 25, 2009 05:37pm | #2

      biff... any skills you feel deficient in can be hired at a lot less cost than having a partner...
      it really comes down to building on the big skill.... managing peopleand if you can't develop that... then no partner is ever going to save your bacon...Mike Hussein Smith Rhode Island : Design / Build / Repair / Restore

  2. craigf | Jan 25, 2009 06:09pm | #3

    I came very close to getting into a similar situation with a partner. The differences in personalities that would have made us a good team also lead to conflict.

    We had trouble hashing out a fair way to value each others contribution.

    If you become partners, you can be affected by problems in their personal life and finances.

    What did work is to do projects as seperate businesses, but give each other a hand when we needed to.

    1. dude | Jan 25, 2009 07:05pm | #5

      a partnership is often described as " the leakest ship afloat "

      i have been approached on the idea many times my contrubution they usually view as the small one  ie: money , tools , truck , shop , & skill

      their share , according to them : bright ideas , fair amount of skill ( diy ) good looking with friends and could wait to the end of first week for their share of the money , however i never met one that could get that far ( need booze , food drugs , gas & past due rent within first three days )

      somehow they still believe they are still bringing more to the table than me

      the above is why i no longer will consider a partner , been there too often and done that & got the scars to prove it

  3. Hazlett | Jan 25, 2009 07:00pm | #4

    Biff,
    you mentioned you are a technician by nature.

    I suspect the great majority of people on this forum with their own small businesses are primarily technicians. At some point they wanted to,or needed to, earn more money than they could make as a technician working at their trade---so they aquired additional skills,building on what they already knew.

    Mike Smith is a people person---so he naturally builds upon his people skills.
    ME?- I view myself as a problem solver--and I approach everything from that viewpoint

    Customer has a problem roof that needs to be replaced?--they solve it by hiring me

    Then I have a problem-- replacing the roof--perhaps it's larger than I can do myself-so I need to sub it out( to who?) or I need employees
    If I choose employees--there is another set of problems

    Luckily--as Mike noted---many problems can be solved economically without a partner--- like payroll. don't like payroll chores?- I solve mine with a payroll service for maybe $16/week and a 20 second phone call
    If I had a slightly bigger operation- I could solve a lot of problems with a part time bookekeeper.

    to me-it's a matter of making lists-identify the problem and then the logical solution--and then implement it-very simple.

    It's all about acquiring new skills-and building on what you already know.Being yourself.

    I have very poor social skills---a loner by nature. Luckily, my trade doesn't require a lot of chit chat and customers view my willingness to climb on nasty steep roofs as more important than chatting about golf etc.- I would be ill-suited to general remodeling, or kitchen design and would certainley go ballistic in any conversation involving choosing cabinet pulls for example.
    If you have the organizational ability to plan out and carry through a carpentry project--well business is just an extension of those organizational skills

    for me- it's all about making lists-and accomplishing goals and crossing items off the list---one step,one skill at a time

    and like your skills as a technician-the more you do something-the more practice---the better you get.

    I don't like to meet new people and talk to them--but as a roofer- basically every prospective customer has the same questions,problems,concerns etc---so basically I am repeating the same conversation in one form or another with every prospect----sheer repetition makes you effective.

    maybe you are concerned about your ability to sell? Don't be concerned. You already have a track record as a successfull salesman----that job you have now?--you got it with sales skills---you sold yourself to your employer as the best value as an employee--build on that!
    ME-- in school I hated any class that required me to get up and give a speech--- I hated the thought of a job interview

    As a contractor--EVERY prospective customer I meet essentially puts me through a job interview--and expects me to give a speech-- I might do that,during the season 4-30plus times a week. NO PROBLEM--- I have what they NEED and there are a lot more of them than there are of me. I just meet them-confirm the problem and describe how I am going to solve their problem. Tell them WHAT you are going to do, do EXACTLY what you said,and do it for exactly the price you told them you would charge.-simple

    Very best wishes,
    stephen



    Edited 1/25/2009 11:03 am ET by Hazlett

    1. Biff_Loman | Jan 26, 2009 12:03am | #10

      Good points, especially on the selling. I've often thought that I can't sell. But I got my current position through cold-calling, which seems pointless and discouraging until success comes. "It's all about acquiring new skills-and building on what you already know. Being yourself."Yeah. You're right. I've probably been cutting myself off at the knees by thinking things like "I hate paperwork" and "I'm not a good administrator." But these things are specific skills and skill-sets. It's not like a was born a carpenter. I'm making myself into one through dedicated application, improving each and every day.

      1. Hazlett | Jan 26, 2009 03:40pm | #11

        Biff,
        hating paperwork can actually be a GOOD thing , business wise----if you USE the hatred the right way. I hate paperwork as well----so over the years I developed ways to become brutally efficient at it
        during the working season-at my busiest---about 3 minutes a day, tops.
        and about 1 hour somewhere over the weekend handles all the household and business finances. for perspective that would be anywhere from 1 employee to 5 employees---but we only do one project at a time. more employees and more simultaneous projects-would certainley complicate things
        but- since I don't want to complicate things---we won't grow in that direction-------
        talk to you later--- i have to go give Mikey a pep talk.
        stephen

  4. m2akita | Jan 25, 2009 07:21pm | #6

    I think that you are going to get a lot of reports of the cons here.

    I am going along somewhat the same lines of you.  Have a collegue who I am talking with about going into business with.  We get along well, have similiar values/ ideas/ goals about both life and construction.  We are comfortable with each other.

    I like the idea of a partner.  Someone to share the burden and the wealth with.  I like having another mind to bounce ideas and plans off of.  I also dont want to have to wear all the hats myself.  A division of labor ( many hands make the load light).

    The cons are what have already been mentioned.  I think a lot of that can be taken care of by having a good partnership agreement/ plan.  Have a good exit plan for the company in place.

    We will have a partnership agreement in place and an exit strategy in place.  We will both be owners of the company, but we will also both be employees of the company.  Neither of us expects things to go smoothly between us all the time, or see things the same all the time.  In those times I will just have to humbly follow his way and then graciously accept his apology when he see's that once again I was right  =)

     

    Jim Allen has had some good ideas on partnerships.  Mike Smith also. 

    m3akita

    Live by the sword, die by the sword....choose your sword wisely.



    Edited 1/25/2009 11:29 am ET by m2akita

    1. MikeSmith | Jan 25, 2009 10:42pm | #7

      yeah..but where's jim when we need him ?hey.... there was a discussion about a new book by Gladwell... i think it is called "Outliers"
      basically he studies all these successes and comes up with a bottom line... being.... it takes 10,000 hours to become proficient at any skill..... occupation.... sport..... so.... partnership .... or one man boss.... it's going to take time and effort to get thereso..... if you're in your 20's..... figure you could be cruising in 5 - 10 yearssooner you start... sooner you arrive at somewhat proficientMike Hussein Smith Rhode Island : Design / Build / Repair / Restore

      1. mike585 | Jan 25, 2009 10:49pm | #8

        Mike Smith is a people person---so he naturally builds upon his people skills.

         .. it takes 10,000 hours to become proficient at any skill.....

         

        Stay with it Mike.... <G>

        1. MikeSmith | Jan 25, 2009 11:08pm | #9

          sometimes when i'm feeling insecure i log on as  Steven hazlett and  pump myself up

           

          come on mikey..... you can do it  !Mike Hussein Smith Rhode Island : Design / Build / Repair / Restore

          1. Hazlett | Jan 26, 2009 03:42pm | #12

            c'mon mikey- you can do it--you are the Greatest-- you are a phenomenal golfer- you are the Tiger Woods of Rhode Island!!!!!!
            Goooo Mikeeeeeeeey, yee hah!don't you feel good now, :>)
            stephen

          2. MikeSmith | Jan 26, 2009 03:49pm | #13

            gotta tell ya.... this January cabin-fever is stronger than usual....
            but yes !
            thanks for the upliftMike Hussein Smith Rhode Island : Design / Build / Repair / Restore

          3. Hazlett | Jan 26, 2009 04:08pm | #14

            Oh man Mike- lemme tell ya about cabin fever!
            we started out the beginning of January with about a foot of snow---- then my son and his girlfriend scampered back to college---then we spent about 2 weeks in the single digits either side of Zero THEN-- last week for one day we hit 40---just enough to renew my faith that maybe ,someday, spring might return
            then Wham--taking it in the rear again back in the single digits.
            trying to think spring by considering an aluma-pole set up i have a guy on line who is selling a used one and cut his price $500( his offer,not mine)
            if he cuts it another $500 he will be at $1000 and I will buy it without further thought but this morning I am gonna make a couple calls to investigate something slateman clued me in on--which might work more effectively for me( AND presumably cheaper)
            stephen

  5. andybuildz | Jan 26, 2009 04:09pm | #15

    In one word..."Associate". If you have to partner up do it that way first rather then a legal partnership b/c partnerships can be as much of a hassle to dissolve as a divorce. I think thats why I see so many signs whether it be lawyers or doctors or whom ever that say & associate.....then take it from there...

    good luck and I understand fully how you feel! It's the luck of the draw. I see a lot of good working partnerships and some that had become nightmares...

    It boils a lot down to feeling a bit resentful that one of you is doing far more then the other...

    For me....I'd love to share in the responsibilities....but I'd been ina partnership once and that was enough.

     

     

     

    http://www.cliffordrenovations.com

    http://www.ramdass.org

     

    1. todd | Jan 26, 2009 05:34pm | #17

      "It boils a lot down to feeling a bit resentful that one of you is doing far more then the other..."You got that right. I've had two "divorces" and ended up loosing what previously were good friends, along with some sizable $ the first time.
      Haven't talked to either one since...I'm a big prick, seems.Number 2 I insisted on holding 51 percent, made things a lot easier to finally part.When you have two 50/50 people pulling in opposite directions that ain't too productive.Todd

  6. Hiker | Jan 26, 2009 04:30pm | #16

    I have seen mutiple sound businesses destroyed by the partnership.  In each case, they never developed an agreement on who is in charge and did not establish clear means by which the partnership would be dissolved and how the value of the business would be determined. 

    In each case, the lawyers made all the money and neither entity could revive the business and each partner was impacted significantly both emotionally and financially.

    Bruce. 

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