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Taking over lawn maint. for a partnership

Discussion in 'Business Operations' started by linky, Jun 1, 2001.

  1. linky

    linky LawnSite Member
    Messages: 151

    I have two friends that have a partnership and they want someone to take over the lawn maintnance portion of their business. They currenly have 30 good accounts and i would add my 30 accounts. I will become a partner and have complete controll over that part of the biz. I will have two employees and the co. provides all equipment. My pay would be 45 percent of the gross income for the lawn maintnance portion of the biz. My goal would be to greatly increase the number of accounts as well as laborers. (all of this is just being kicked around) If/when this happens it will be approved by my accountant and lawyer- you know the IMPORTANT stuff. Please give me your views and things to carefull of I'm a small sole propriator and this seems like it could be a very good thing. At worst i would still have the customers that i brought to the biz(by legal agreement) Thank You!
  2. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488

    Your pay would be 45% of the gross revenue from landscape maintenance??

    Something isn't right there.
  3. linky

    linky LawnSite Member
    Messages: 151

    John thanks for your reply. Could you please tell me what seems wrong? Thanks
  4. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488

    I'm speaking from "feel" here as I don't know the specifics of your arrangement, and it really isn't any of my business....

    However, if you consider that very successful landscape maintenance contractors find that 35% gross profit is the norm around the country, and that labor cost is (generally) about 35% of revenue generated - that leaves the rest to cover your profit.... now, maybe your partnership will do incredibly well as compared to norm, but aren't the partners going to want something out of this arrangement?

    Unless, you're talking about you getting 45% of the NET profit - that sheds a much different light on the subject. If that's the case, and if you're going to be out the doing production work too (mowing yourself), then I would respectfully suggest that you get a 'salary' or 'draw' for your production time and THEN take 45% of the net. That way you're somewhat assured of getting some money to live on all the while earning a profit for the partnership.

    Also, remember that a partnership has the same liability issues that a sole proprietorship has, only sometimes it is worse as you may be liable for mistakes made by your 'partners' too, unless your liability is limited to your portion of the "investment" in the partnership.

    Hope this helps some. It's not gospel as I'm not all knowing/all seeing. This is just an observation from an outside source.
  5. linky

    linky LawnSite Member
    Messages: 151

    John, Thank you for for your time and input it is helping me. At this point we are trying to figure the pro's and cons. I'm trying to get as much info as possible so that i can ask my accountant specifics.
    I welcome any and all replies.
    Thanks again
  6. Randy Scott

    Randy Scott LawnSite Bronze Member
    Messages: 1,915

    linky, I'm not sure when you stated that you "will become a partner and have complete control over that part of the biz" actually is possible. To be a partner and have complete control I think will be impossible. They are going to let you do whatever and exactly what you want with that area of the biz? Highly unlikely! They have something at stake also and will want to have some input. I don't know all the details and they are your friends and you are able to get a "gut" feeling about this that we can't. All I say is to ask yourself, " Why am I currently in business for myself "? Whatever the answer is, and the reasons for doing it on your own, will no longer be ! You now will somewhat be back working for someone. Although a partner, you will have to answer to someone again. If that's not a problem, and this feels right to you, go for it and good luck. Just something to think about!

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