Minor or Silent Partner

Discussion in 'Business Operations' started by Frontier-Lawn, Jan 7, 2007.

  1. Frontier-Lawn

    Frontier-Lawn LawnSite Silver Member
    Posts: 2,949

    I have thought about this long and hard and have decided to take on a Minor or Silent Partner. The reason i need one is the wife's taking 9 months off for child #2 to be born, so i really have no more cash to expand to bizz (advertising, new equipment, ect). I did plan to do a big advertising blitz this year before i found out #2 child was coming. I'm looking for a $20,000- $30,000 buy in, that will cover adds new Ztr and operation costs.
    Our Current client base is 90% Res, 10% Comm
    Now would i go about doing this? i also want to retain the major controlling part of the biz so i can latter on buy out the partner.

    Any help i can get would be great on ironing the plans out.
     
  2. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    Con-grats on the new addition coming to the family

    BUT look at is this way ...if someone was to approach you with this concept would you invest or have $20-30K of disposable income ??

    Also keep in the back of the thinking cap .... that say you find this person n they buy in fore $30k n 5 years later you do wish to buy them out ....how much is this gonna cost ... certainly not the orginal investment .... some sort of compensation is gonna have to be meet ...

    I'd say if you really need the extra cash perhaps other options need to be explored if they haven't already ... such as a loan, finance the new mower, do you have equity in something such as a home

    Now if your thinking of a partner as in not only the new liquid cash but also someone to pull 1/2 the workload that's another issue

    I started with a partner n I think enough threads have beaten this topic ... that's something that is not fore everyone ...n I did buy him out bout 5 years ago ....n I still go over to his house on holidays ....so the friendship lasted

    Either way good luck
     
  3. Frontier-Lawn

    Frontier-Lawn LawnSite Silver Member
    Posts: 2,949

    i would like to get him to work in the bizz, to get ore done in the same amount of time, also so i can take a vacation and let him work that week and visa-versa if he needs a vacation to
     
  4. Accu-cut Lawn Care

    Accu-cut Lawn Care LawnSite Bronze Member
    Posts: 1,206

    Taking a partner in the lawn care biz is a huge mistake...Too many hands in the honey pot. If you need expansion money, try contacting your local SBA.Even with mediocre credit, you can qualify for 25k pretty easily. If you are worred about workload and vacation time, hire an employee and show him the ropes.
     
  5. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    MMnnn I don't know fore others ....but I can say fore a FACT that when I got my SBA Loan it was after being in business fore 7 years n I had too jump threw alot of hoops .... they tore that little P&L statement to shreds ... it was like buying a house

    Anywho ... a partner-ship is like any relationship ...it's not fore everyone ... I can say fore a FACT that my original partnership was a GOOD Thing .... I learned alot ....n to start having someone else with me in the business was an ASSET .... I have NO Regrets ...would I do it again ....Yep ...but I was Lucky ...my partner n me kept the friendship ....had OPEN Communication ...brought equal good qualities to the business which complemented each other

    Again NOT fore everyone ....n really you should think on this very careful .....
     
  6. Team-Green L&L

    Team-Green L&L LawnSite Bronze Member
    Posts: 1,776

    The process begins with a Business and Marketing Plan. After you've completed both those documentations, you can look for investors through the internet. They don't care what you do or what your company produces. It all about risk vs opportunity to them.
     
  7. Accu-cut Lawn Care

    Accu-cut Lawn Care LawnSite Bronze Member
    Posts: 1,206

    I had a different experience with an sba loan. No p&l statements or bus. plans were neccessary. There was a lot of paperork to fill out; but it was worth getting 15k at 4% interest without having to put up collateral. Your experience with a partnership was lucky. My brother and I tried one out and things went very sour.
     
  8. mrusk

    mrusk LawnSite Gold Member
    Posts: 3,260

    What percentage of the business are you looking to sell? What kind of return will that investor get?

    Did you come up with the 20-30k # by what you think that percentage of the business is worth, or because that is just how much money you need?

    I do not think an investor is the best thing for you to take on right now.

    Matt
     

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