Going in partners with a silent partner

Discussion in 'General Industry Discussions' started by smarino21, Jul 31, 2006.

  1. smarino21

    smarino21 LawnSite Senior Member
    Posts: 345

    I was wondering has anyone ever went in partners with someone who has a lota money. I was thinking of looking into it. The goal i am trying to accomplish is to get bigger (from1 truck cutting to 3) I would love to have 3 trucks on the road cutting. So money becomes a part of this and new accounts. So get a big dogg on your ship and bank roll you and then buy out a few companies and so forth? Any help anyone think good or bad?
     
  2. Stan's_Lawn_Service

    Stan's_Lawn_Service LawnSite Member
    Posts: 18

    Bad idea, everybody loses, because nobody wins, lawyers win it all,two brains two ideas about things. The silent partner is rarely ever silent. They have a stake in what is going on and seem to keep their fingers in a business that they rarely understand. They have money and are looking for a new way to make more money. They rarely care about your good name or your business relationships. (The reason I know is I have seen two LCOs do what you are thinking about doing and both lost everything.) You will be much happier, less headaches and no worries about someone trying to leverage you out when the business gets profitable. My 2 cents worth...

    Stan
     
  3. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    Man, Stan said it right out, you won't get no better truth than his, I edited some to what I think are the most important bits:

    - The silent partner is rarely ever silent. If they have any ability to communicate, plan on it.
    - They keep their fingers in a business that they rarely understand. Yup, they will drive your boat, and hit a few icebergs.
    - They are looking for a new way to make more money. Yes again, and your money and/or success takes second place always. Matter of fact, if you go under, so long they make more, that is ok by them, very much so... Do NOT listen to them, they will swear up and down oh nooo it's really not like that... Yeah, whatever, it always is!
    - They rarely care about your good name or your business relationships. Why should they? It's their investment they're working on.

    You hit that one right square on the head man, I done been down this one in other ways, you are 100 percent absolutely correct.
     
  4. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    That means giving up control and much of the decision making to someone else. No thanks.

    I suppose ideally you could find someone who would give you a ton of money and only ask for 49% ownership. But they wouldn't be very wise. I don't think you'd find too many investors wanting to go for that deal. If they are going to pony up tens of thousands, trust me, they are going to want to call the shots too.

    I've grown my business from just me and 1 truck to 16 workers and 9 trucks without ever having to ask for someone to bankroll me. Sure, I might not have the newest nicest trucks in town. But I paid for every one of them CASH and I own them outright. And I didn't have to borrow a dime.

    If you're thinking of getting a loan to help you expand, consider a small business loan. They start out at about $100,000 and they aren't too awfully hard to get. The nice thing about them is you still get to call the shots.

    Still, my biggest advice is to just grow as you can afford to. You don't have to buy brand new trucks to expand. Find deals. Find ways to finance your expansion creatively, without spending a lot of money up front. That's how I've always done it. It's been working pretty well so far. As I said, I don't have the nicest or newest trucks around. But they do look nice and professional. And I never had to borrow anything to get into them.
     
  5. befnme

    befnme LawnSite Bronze Member
    Posts: 1,413

    Dont Do It !!!!!!!!!!! Bad Idea !!!!!!!!!!!!
     
  6. TheLawnBarber

    TheLawnBarber LawnSite Senior Member
    Posts: 539

    start from the bottom with your "own" buis. What if Two, three, four years down the road the partner wants out. Then what are you going to do?
     
  7. Tharrell

    Tharrell LawnSite Silver Member
    Posts: 2,964

    Someone once said having a partner is like being married without the sex.
    That's not true, when I had a partner in my moto-cross track, I got screwed all the time.
     
  8. smarino21

    smarino21 LawnSite Senior Member
    Posts: 345

    thanks guys
     
  9. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Posts: 3,065

    DONT DO IT! I was about a pen stroke away from doing it last season. The "investor" was a guy I used to work with who loves the whole landscaping/lawn care stuff but he was a salesman through and through, well actually he is a sales manager at a huge Ford dealership. But anyway, he wanted somewhere around 35% intrest on the "loan", after I figured it out to be that rediculous I said have a nice day and walked away very fast. Just be patient and built your business slowly and you will better for it.
     
  10. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    Hi Jim, Have not seen you around to much lately. And as always good advice. A silent partner is really just a bank loan so will work the same. He will get paid first and will start dictating if not paid.
    Getting to 3 trucks should not be too hard. I would grow it yourself
     

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