Silent partner's worth it or not?

Discussion in 'Lawn Mowing' started by nobagger, Jan 10, 2006.

  1. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Posts: 3,065

    I ran into an old friend of mine who now owns and runs his dad's plastic shop. He got into plowing and thats how we met up one night. Anyway, we've been talking about adding a 3rd truck and running it full time, and to make a long story short he asked how my business was going and he said he was looking into getting into a 2nd business. He asked me if he bought me a dump truck could I use it. Then he asked if he bought a new mower could I use that. I could use a new rider or a bigger w/b but is it worth it, (a silent partner)? He would have very little to do with the lawn care side of things and he is allergic to grass since he was a kid so he's not going to be mowing or anything like that. Basically he would be a financial backer.
     
  2. Lazer Man

    Lazer Man LawnSite Member
    from SW Pa.
    Posts: 9

    It all depends what he wants in return. To be honest whatever you folks decide to do get it in writing. It could be a good deal but honestly you know the guy. Better yet whats your gut feeling on this issue, the gut always knows.

    Bob :waving: :waving:
     
  3. K.Carothers

    K.Carothers LawnSite Bronze Member
    Posts: 1,124

    That's the truth!!

    Like mentioned, get it ALL in writing, down to every detail.

    Detail,Detail,Detail,Detail,Detail,Detail,Detail,Detail,Detail and detail

    kc
     
  4. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    I would say only if you are are between a rock and a hard place...other than that, no.
     
  5. slebeau20

    slebeau20 LawnSite Member
    from USA
    Posts: 103

    I would sit down and talk to him some more. If he is willing to let you keep total control of everything, I think that would be great. There are people out their that love to help people out. The last thing you want is him coming back to and screwing you.
     
  6. jc1

    jc1 LawnSite Bronze Member
    Posts: 1,656

    You would be better off making a truck payment. The truck will do what you want and make your life easier. A partner that does nothing other than supply you with equipment is going to want to be paid from your work and eventually you will resent that. Stay friends say no to a partnership
     
  7. Ol'time Lawncare

    Ol'time Lawncare LawnSite Senior Member
    from NJ
    Posts: 497

    Don't do it!
     
  8. brucec32

    brucec32 LawnSite Platinum Member
    Posts: 4,403

    Be very wary!

    Essentially all this guy seems to be doing is being a lender for you. He's giving you equipment in return for some mysterious cut of the profits in lieu of a lender giving you the money to buy the equipment and then you paying it back with interest.

    In other words, this is a totally unneccesary complication and potentially is a situation where someone is trying to take advantage of your lack of business knowledge to grab a portion of your business for very little. These ad hoc partnerships often end in acrimony, so you go into it at your own peril.

    While a dump truck is probably quite a lot, mower payments are peanuts. Why would you even want this guy involved in your business if he's not doing anything?

    If things are so good you're adding a 3rd (huge) truck, then you should be able to fund its debt out of your earnings. If not, you are risking a future cash crunch and bankruptcy. Lease it or buy used as alternatives if you need to grow. But generally not being able to "afford" to buy equipment to grow is the market's way of telling you that you aren't ready to grow. A lot of the big corporate bankruptcies (airlines, for example) happened because of over-optimistic growth where the increased sales do not pay for the new equipment.
     
  9. mrusk

    mrusk LawnSite Gold Member
    Posts: 3,260

    If he wants to back you in a business pick a better one then lawncare! Get into flipping houses with him or something.
     
  10. AintNoFun

    AintNoFun LawnSite Bronze Member
    Posts: 1,807

    only was i could see a silent partner worth it is if your going to be expanding to the 10th power. like adding 6 crews in a year or something major like that..
     

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