Listen to this

Discussion in 'Lawn Mowing' started by SummitLLC, Dec 6, 2004.

  1. SummitLLC

    SummitLLC LawnSite Member
    Posts: 13

    I have been in business with two other partners for about one year now. There is Eric, Brad and I. Eric and I have all the technicial experience. Him and I were part-timers, the past couple years,and this seemed like the next step. Him and I were both skeptical of Brad. He had little experience, but supposedly was good with the business side of things. He started out strong, talking a lot about what we should do, and how we can make money, but it seemed to stop at that. His job was to set up the company, legally. It went a week, and then another week and nothing had been done, I figured he was busy, so I got all the paperwork, made all the phone calls, and was done relatively quickly. Then came the billing and payments. He didn't keep any records of deposits or withdrawals. Then the work started coming in. We started with a few mulch jobs that kept us busy but then we were booked and real busy. The trend was that Eric and I would be at the garage at 715 every morning, we would wait around till 745 ish waiting to see if he would call and such. Sometimes he would show, but 80% of the time he wouldn't. We would get a call around 10 saying he had a late night or some bull. To make a long story short, he didn't do his specific job, he was never around on time for the basic work, was slow when he did work, and thought that he was doing his part. Him and I fought a lot, but the last argument threw me over the edge, he claimed that the business would be nowhere without him and it could never run without him. That;s when i said ok ill buy you out.
    This is where i need advice. When we started it, Eric and I contributed 44 inch hydro walkbehind and a belt, all the trimmers and blowers, and a chevy 2500 pickup. Basically 11,000 dollars worth. Brad bought the trailer, 1100. Now we were supposed to be equals, but we knew it wasnt possible because he didnt have the money. Now when we went into negotiations, he wanted 30 percent of all the equipment, and 30 percent of profit in bank. I laughed in his face. My brother is an attorney and came up with a suitable number, and brad was not happy with this. He tried to counter a lot but i stuck with the number, and he eventually conceded. Because he was so pissed off, he shut our phone off. He put the phone number in his name and password protected it. Therefore instead of bargaining, I just got a new land line set up. Which was not good but it worked. He then wanted me to pay for the early termination fee. I laughed and said that he was paying for all the stuff i had to pay for to get a new number. He was pissed off, and now he came over and took the trailer that he bought, even though i offered to pay for it minus depreciation. Sorry for the bad english, im beat and have been working in the snow. Any advice would help.
    Josh
     
  2. hole in one lco

    hole in one lco LawnSite Bronze Member
    Posts: 1,793

    equal partners means equal investment
    hears your trailer get the f out :)
     
  3. TURF DOCTOR

    TURF DOCTOR LawnSite Silver Member
    Posts: 2,138

    Partners suck i had 1 for 3 years, get out before you get in over your head be solo,or familiy, or hire the labor out.
     
  4. SummitLLC

    SummitLLC LawnSite Member
    Posts: 13

    I forgot to mention that Eric and I are cousins and best friends since we were kids.
    Josh
     
  5. out4now

    out4now LawnSite Bronze Member
    from AZ
    Posts: 1,796

    Good thing phone was in his name rather than company. You are personally liable for all company debts in a partnership. I suggest considering incorporating or becomming an LLC in future. In business world there are lots of guys like that they are usually entraprenuers. They have big ideas and can talk up a storm but aren't usually good at running the business. Sort of like Oscar Schindler was in the movie "not the work...presentation" They ride the backs of others and let them get them there. Bill Gates is a better example. While a smart man he'd have probably been content to program than deal with the public. He was sort of forced into the figure head role. Unfortuanate that you had this experience, consider it a learning exercise. My guess is that he was not a good student in school, and could not hold a job very long and had a problem with authority? These are tell tale signs of that personallity type. Good luck to you guys in the future.
     
  6. Mico Landscaping design

    Mico Landscaping design LawnSite Member
    Posts: 238

    i would have laughed right in his face to thats some bull ****.. give him %1 is to much in my eyes good luck with this loooser! :cool2:
     
  7. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    this might make you want to consider the partnership with your cousin as well. Because this could happen again with him down the road
     
  8. bettergrass

    bettergrass LawnSite Member
    Posts: 242

    i would never go partnership inless it was completley 50 50 and id deffidently get a lawyer for every step. the only reason i would do it is cause its kind of like buying out competition. if each guys puts in 30 grand to start a company thats 60 grand to buy stuff. so it would be alot easier to put your foot in the door and start you buisness up right.
     
  9. lpwhandyman

    lpwhandyman LawnSite Member
    Posts: 197

    I agree with Tideman. You have to learn from this. I know you are cousins with your current partner and you think nothing will come between you, but it happens. Since your brother is an attorney, use him and get everything in writing and you can add to it as you see fit down the road. Just like having contracts with your customers, you should make it official with your partner, no matter who it is.
     
  10. ThePawnbroker

    ThePawnbroker LawnSite Member
    Posts: 2

    I hate to say this but you should go ahead and get an attorney. Not your brother, even if he is the best in town. Find an attorney who specializes in business. Explain your situation to the attorney and tell him/her that you have a steady business and they will almost always take a downpayment and let you pay an agreed on amount every month until you have paid the bill in full. They also shouldn't charge you any interest. Did you every form a legal partnership or corporation? No matter what form of business relationship you have, change the locks on the garage, change all passwords on anything you have (accounts, computers, etc). Form a partnership or corporation (this should not take long at all) and change all business accounts of any kind into the business name or open new accounts in the business name. It doesn't sound like you have any kind of legal partnership at this point so if the trailer is titled in his name you are probably out of luck there. I would immediately open a new bank account and transfer whatever money you have in the old account into it. Let your attorney sort out what if any of this money you owe him later. Remember, he has already shown his ability to do the "wrong thing" by what he has already done so you need to protect yourself now. If he gets the money out of the account, you will most likely never see any/all of it again. Last, if you want to stay in business with your cousin, you two MUST get an agreement in writing as soon as possible. Spell out what happens if you decide to go your separate ways. This is the best way to stay in business with someone. It's just like the old saying "strong fences make for good neighbors". This is a very true statement. The odds are that you and your cousin will not be the best of friends after the stress of running a business sets in. I always tell people "whatever you do, own your business by yourself". If you want to be optimistic, there are those rare situations where both people are confident in their positions within the company, are both very mature, both feel like they are getting their fair shake, and can therefore make fantastic partners. You and your cousin may be like that. However, buy an insurance policy (in the form of an agreement on how to dissolve the partnership) while you are still friends. Don't feel bad about anything you have to do now to protect yourself. Just think of all those long hours and early mornings you were sweating your butt off while you're worthless "partner" was "chilling" with one last "cold one". Remember, every minute you spend doing his job is one less minute you have to spend with your friends and family.
     

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