Considering a partner but....

Discussion in 'Business Operations' started by Georgiehopper, Jul 29, 2003.

  1. Georgiehopper

    Georgiehopper LawnSite Member
    Messages: 187

    I'm having second thoughts.

    Our business is at a crossroads right now. There is so much business, actually backed up due to May and June's constant rain, that my husband and I cannot handle it all. We need an additional person to help shoulder the responsibility..i.e. running the jobs and making sure they get started and completed on time.

    I'm out doing sales calls, estimates,design, and troubleshooting...and my husband along with 2 employees are doing the installations.

    We recently canned our hardscape subcontractor for unethical our workload has increased greatly.

    We have one guy working with us for $20.00 an hour..he has great experience in both landscape and hardscape, has managerial skills, and speaks fluent spanish. He has shown an interest in part ownership in our business but I am unsure of his motives.

    I am hot and cold with day he is great..and another day he will call and say hes not coming in because hes doing work on the side. He says if he were a partner he would dedicate all of his time to the business, but since hes not, he needs to do his "own thing" to pay his bills.

    Our business is a corporation, so we would have to sell him shares......but he has no money to put up. He only has a few pieces of equipment and 7 clients. He would only be bringing his skills and good looks to the business.

    We could really really use him though.... but I'm just not sure if he would be as dedicated as he says he would.

    Deep down inside, I'd like things to remain as they are and just have a really good foreman...but its impossible to find one here... we've tried.
  2. Ground Master

    Ground Master LawnSite Senior Member
    Messages: 505

    scale back your workload no matter how much it hurts......if your worried about this guy now, you have just answred your own question---it sounds like he will give you more problems if he becomes a "partner"........

    Let him go and scale back!
  3. GLAN

    GLAN Banned
    Messages: 1,647

    would profit sharing for this individual, rather than partnership work better for you?
  4. GLAN

    GLAN Banned
    Messages: 1,647

    what about another laborer? may help to speed up projects, allowing to move to the next quicker.
  5. Rustic Goat

    Rustic Goat LawnSite Bronze Member
    Messages: 1,194

    Listen to that little voice giving you doubts. Don't know how many times I've chosen to ignore it only to regret it later.
    When there is something this major being considered, don't continue into the unknown with doubt as your passenger.
  6. M&E LAWNS

    M&E LAWNS LawnSite Member
    Messages: 9

    A partnership is like a marriage, and when it goes bad, it really goes bad.

    I had a partner for three years, the first year things were good, business was growing, and the money was pouring in. We still looked at business the same way. The second year, things started to turn, as my partner decided to work less, and make more without my knowledge. We started to see things differently. Arguing became the norm for the day. After three years, I had enough and left to start my own company. He is currently out of business.

    I guess the money, or the power changes people, why bring on a stranger, or a family member as a partner? Its a lot harder to fire a family member than an employee.

    You have more control over that employee, keep that person happy, and your work load will be easier.

    good luck
  7. LawnMowerMan2003

    LawnMowerMan2003 LawnSite Senior Member
    Messages: 768

    I have always believed a partner would be more motivated than an hourly employee. However, $20 an hour is not exactly minimum wage, and if this guy can't be a dedicated employee and not call in and make the excuse that $20 an hour is not enough for him, then I don't see how he would be a good partner either.

    My own personal experience with a partner went well, untill he decided to bail out on me without warning. He was motivated and jumped at the oppourtunity at first, but didn't even last for the whole season, and I ended up by myself in the end anyway.
  8. mtdman

    mtdman LawnSite Gold Member
    Messages: 3,143

    It's my opinion that if they guy wanted to be a partner that bad, he'd be making the effort NOW to impress you and show how much he wanted in. AND he would find a way to purchase the shares. No way in Hell I'd consider admitting someone that called in to do his own work instead of contributing to the business. You have to earn it, not bargain your way in. Scale back, hire more people, whatever, but listen to that nagging voice.

    I've been in 2 businesses with partners. The first one went BADLY, lasted 4 months. We were on 2 completely different planes and it did not work out. The current business I have now started as a partnership and lasted that way for 7 years. Problem was, after about 4 years my partner turned into more of an employee and I pretty much ran everything, he was just the labor. It got to the point where he was taking a lot away from the business, but never wanted to contribute or work hard to get things done. He quit this year, and I've never been busier, happier, or made more money. I will definitely never again take on a partner. If I need the help, I'll hire.
  9. Green in Idaho

    Green in Idaho LawnSite Senior Member
    from Idaho
    Messages: 833

    Isn't that the guy you were not going to hire and instead buy a Dingo?????

    And you would not have to 'sell him shares'. It can be noncash transaction.

    There is another question about letting him have accounts 'on the side'. Sounds risky to me.

    Employee contract.... " no landscape work outside of existing employment" or something to the effect within the scope of legalness.
  10. drobson

    drobson LawnSite Member
    Messages: 237

    Instead of a partnership right away, I would do as you were saying and give him shares or interest in the company. What you can do is give him options that vest over time. And as well as vesting over time, they can have specific milestones that need to take place before the vesting schedule can move on. The milestones can be anything from completing specific large projects, to keeping a certain % of projects within budget, to expanding his part of the business by a certain %.

    You can have a contract that says he can get partner status after a certain number of share options have been vested. Make this be at least 5 years in the future before he could become a partner, and make sure that his number of shares stay at a minimum.

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