Another partnership question...

Discussion in 'Business Operations' started by Bones, Dec 17, 2002.

  1. Bones

    Bones LawnSite Member
    Posts: 4

    So I did a search and have been reading the board all about partnerships and how nasty and evil they are. Most stay to steer clear and I can understand that. I thought I might offer up my situation and see what kind of advice I can get.

    My current situation is that I'm currently a full-time engineer. THe job is ok, but I'm not sure I want to do this for the rest of my life. As one moves towards management, the hours get worse and worse as well!

    So I have been kicking around the idea of starting a LCO for a LONG time. It just happened that my Brother In-Law was kicking around the same idea as he just sold his company and was looking for something to do.

    My Brother In-Law owned and operated his own business where he did marketing, sales and everthing else. The field he was in has been struggling so he sold the company to his employees. He recently went back to school and is working on a business degree very part time while he works a new FT job.

    He brought up the idea of us getting together on this venture. We both would like to work it part time, at least for a few years. He has a 16 year old son who would work for us along with my 16 year old brother.

    What makes this partnership attractive to me is my Brother in law's business experience. He's owned his own company and knows what it takes to make it work. He is VERY good at dealing with people and would be good at closing deals. I've got NO experience with running a small business, the costs involved, insurance, tax issues.. none of it.

    One other benifit is that I'm thinking a partnership would help keep each of us motivated.

    We live about 20 miles apart. WHen I think of the business I'd like to get, I am thinking of commercial properties. There is a nice cluster of businesses about a mile from my house that would allow me to mow at night or on weekends without alot of running around. I'm not quite sure what he's thinking.. residential or commercial. I'd have to think commercial due to us both working other jobs full time.

    I've been thinking about different ways to set this up.. have a total partnership splitting the work and profits. I can see this leading to problems as has been rehashed many times. I also thought to maybe run the companies more like an alliance. Share the work running it but run accounts separately. I'm not sure how well this would work though.

    Thanks for sticking through this novel! :)

    Any advice I can get will be GREATLY appreciated. Thanks!
  2. GroundKprs

    GroundKprs LawnSite Bronze Member
    Posts: 1,969

    Perfect situation for a Sub S, maybe a LLP or LLC.

    If disgreement or dissatisfaction in the future, either can sell his share to the other, and walk away. Just need to state that share sales must first be offered to other shareholders; good lawyer and good accountant necessary for this to fly smoothly.

    Just remember, in a partnership, each partner is full owner of the business. You and me partners, any act or decision I make is binding on you. Even if I sold the business to someone else for 10ยข on the dollar, you'd not have recourse against the buyer. LOL.
  3. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Partnerships are tough enough alone...but having one that includes a brother-in-law???

    Dunno, think the jury is gonna be out on that one for a long time. No matter how much you value your brother-in-law's business savvy and experience, when you meld "family" into "business", you are ceating a whole different atmosphere under which to work. Many different dynamics get put in motion.

    The very last partner I would ever want to have would be a family member.

    just my 2 cents.
  4. burninbill

    burninbill LawnSite Member
    Posts: 80

    My brother-in-law and I started 2yrs. ago and everything is running just fine. Is it easy, h**l no it isn't but that has nothing to do with my partner, that's just business. What needs to happen is you guys have to a clear vision of what you want to get out of the business. No hidden stuff, lay it on the table and leave your ego's at the door. Trust me you know right now if you trust your brother-in-law or not to be a good partner. The best advise I can give you is to first decide if this a job change you want or "It's easy to cut grass and I hate my job" because you will find this isn't as easy as it looks. Don't get me wrong, I love my job. I say think to yourself long and hard, then approach your partner to be. Please feel free to e-mail me or call.

    In short everyone you talk to here is against partners and that is fine but I am here to say it can work. I do it every day.

    Jon Walker
    Cutting Edge Lawn and Landscape
  5. bubble boy

    bubble boy LawnSite Bronze Member
    Posts: 1,020

    they can work, i've been one of those who has given positive comments on past threads.

    but for us we basically ran the biz for another LCO before going on our own. so we knew what to expect, good and not so good.

    both must be equally important, and FEEL equally important. ( or unimportant i guess, as long as you equal)

    your post though has some concerns...he has a new job, you are an engineer...time will be tight. this could create a prob,who sacrifices when, and how much...

    you have no small biz experience...could be a prob. for him. do either of you have lawn industry experience?

    you don't even know if he wants res or comm. and you say "I want commercial" such thing as I in partnerships, just "we"...sounds like you're already not talking enough to him.

    if you cut near your house, and he cuts twenty miles away whats the advantage? i guess if he did all the paperwork, but why would he? and if you split the paperwork, you might as well go on your own.

    in fact it sounds to me like you may want to. insurance, taxes, billing, etc you can easily figure that out. and are you good with people, even if you're not as good as him? a couple sales seminars can help. and you learn the more bids you do.

    the local small business office can help you. the literature put out is plentiful. they can give you the finer points in setting up.

    now, as i have a partnership that has worked (so far) understand that i believe they can be great. but the circumstances are rare, try and look at worse case scenerio's and see if you could see the two of you working them out together...

    and as always, shotgun clause.
  6. Bones

    Bones LawnSite Member
    Posts: 4

    Thanks for the info so far.. I'm glad to see that a couple of you see partnerships as a favorable thing, when done correctly.

    I appreciate your comments Jon and Bubble Boy.

    I feel that my brother in law is about as a good choice for a partner as one can get from a business prospective. I've seen what he can do and has proven that he can succeed with his own company.

    What I don't know is what he plans to do long term. I've got to say right now that we are in the VERY preliminary stages of getting this going. We just have basically chatted a little at family get togethers and such.. no deep discussions yet, although I do know that he's been working on a business plan. Heck, he was putting a business plan together before I mentioned to him that I was thinking of starting up a LCO.

    One thing that we both have in common is that we want to do this part time. From my point of view, I'm looking to do this to supplement my income AND to do something that I really enjoy doing. I hope that doesn't put me in scrubville. hehe If I do this, I WILL do this right... good equipment and my usual anal-perfection that I am known for.

    He is also looking to supplement his income and do this part time. He's mentioned that he would like to grow this to the point where he can just manage crews full time from his golf cart. hehe

    As for my job, I am fortunate to work for a company where 40 hour work weeks are the norm. In the summer we have the flexibility to work 4 10 hour days, which wuold work perfect for me to spend time getting the business going. Yes he has a new job and that is a concern. I'm not sure what hours he will be working or how flexible they are.

    I was thinking of sticking to commercial because I won't be able to cut as much as is needed during the week if I do residential. Who wants some dork over at 6am on a saturday mowing your yard. hehe Commercial accounts will allow for cutting on the weekends.

    I guess it's time to get together for a serious talk about where we want things to go, who will do what work, where to concentrate and all those things.

    any other advice or considerations are welcome.



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