Partnerships

J Phipps TN

SGF, Supreme Grumble Framer
Joined
Jul 14, 2004
Posts
1,423
Location
Kingsport TN
How many of you out there are in a Partnership in your business.

I am considering it and want to hear from those of you who are curently in business partnership situation. I know it all depends on the "partner", but are there any success stories?

It just seems you could get alot more done. And there would be someone with a vested interest in the business becoming a success.

I am not a large business, Just a small, high end frameshop with a few artists that I carry for sale.


I don't own my building, so it wouldn't be a huge investment for the other person.

Maybe I'm just feeling a little overwhelmed so if you think it is a bad thing or a good thing, I would appreciate your imput.

Jennifer
 
I'm in a partnership with my bank & Uncle Sam.

;)


Seriously though...a partnership in small business is like a marriage. If you aren't 100% comfortable and trusting, stay away unless you set the business arrangement up under a different entity than a true partnership.

A true partnership makes you liable for any business debts or actions taken by your partner.

Look at what each of you bring into the business relationship and make sure your assets outside of the company are protected.

Consider another entity, such as a corporation or LLC (Limited Liability Company). Many advantages depending on your situation and your state rules and regs.

Research on your state government website and talk to your CPA or attorney to fully understand the different entities you may set your business up under. There are legal liability concerns and tax considerations too.

Dave Makielski
 
Jennifer, when I first read your post, I had a feeling of dread.

Taking on a partner is a HUGE decision. If your shop is a big part of your life, it means giving (selling) away part of your life.

When it's a good partnership, it's great! When it goes bad, it's as bad or worse than marital problems.

Wish all the best in your decision process. I'm really glad it's not me making it!
 
Originally posted by J Phipps TN:
...It just seems you could get alot more done. And there would be someone with a vested interest in the business becoming a success...it wouldn't be a huge investment for the other person...
Just a few thoughts:

1. If you want to get more done, it may be easier to hire, train, and manage a good employee than to cooperate with a partner who could have strong opinions. In the employee/employer situation, there's a clear distinction about who's boss, and that may get fuzzy with a partner.

2. What would be the partner's "vested interest in the business" you mention? I think a vested interest should come only in the form of, and directly proportional to, an up-front investment.

3. If it "wouldn't be a huge investment" for the incoming partner, see #2 above.

4. A partnership is like a marriage, in terms of how the business relationship works. Would you want to be so committed to your partner?
 
Proceed with extreme caution. I know of a frameshop that brought in a partner same as yours, small highend. Started out great ..ended disasterously. I've recently felt overwhelmed and even though its slow a goood friend of mine who has worked with meas a framer a 2 other shops in that past is helping me out a couple of times a month. I pay her as my framer. We frame..toss ideas around,etc. It always ends up as a high production day and takes enough pressure off me to pursue other parts of my business enough to last a few days.

Just be careful...my stomach flip flopped when you said partner :(
 
I tried the partnership thing in my first shop, after I was underway for a few years, for the sake of having help. It got ugly. I don't recommend it. We were very good friends and thought we could get through anything together. We didn't. It ruined our friendship and didn't help the ambience of the shop either.
Been there, done that, won't do it again, ever.And beware of anyone approaching you with the partnership idea. I've already had that.
I agree with the others, better to hire.
 
A friend of mine just ended a partnership with someone she was VERY comfortable with.

After less than 3 years things went bad, lawyers got involved and a nasty fight not unlike a divorce followed.

She got some cash, he got a very good business that she got off the ground and made profitable.

If you can tough it out for the first year or so on your own do it. If you need help you can hire someone, or ask your suppliers how they may be able to help ie. if time is a problem for a few dollars more suppliers will join your frames...freeing up some of your time when time is what you need.

If you are fortunate enough to ask family or friends for help do it. Even if they don't know anything about framing there may be things that they can do to help. Run errands, help place orders or even putty frames are things that can eat up your day and can be handed off to a non-framer.

If control is an issue for you (like most of the shops I have worked at) you may find it very difficult to give over half of the decision making to an "outsider". You will not be THE boss any more and when a partner buys in they have just as much say as you do.

I've opened my shop over 1 1/2 years ago and have been where you are and am glad to not have to give half of what I have built to another person.

Good luck in whatever you decide.
 
Here's a success story for you!


I have been in a partnership with my sister-in-law for 5 years. A FAMILY partnership -- YIKES!! Before we started the business we discussed the risks at length. To us, the risk of losing our bond as sisters and friends was a larger risk than entering the business world. COMMUNICATION IS KEY!!! It IS just like a marriage. We don't make any decisions without consulting the other and everything we do here is 50/50. I would imagine though that bringing on a partner to an existing business would be much more complicated. Afterall, you have a history, you've built the business and he/she is jumping on after all that work has been done. Something to think about. Resentment between partners will kill the business -- and a relationship -- in a heartbeat.

From a mom's perspective, having a partnership has definitely give me a certain amount of freedom. My partner and I both have young children and we have been able to work the business in a way that we have had limited child care costs (and none at the moment) and we have been able to spend the time with our families that otherwise would not have been possible.

Benefits and risks! Weigh 'em out and follow your gut.
 
I just ended one on a different venture. Don't recommend it. It was with a person I thought I could get through thick & thin - didn't work that way.

I'm in the boat where I get overwhelmed with work - its just me. I have friends and family I bring in on occassion to help me with the little stufff that can eat up time and keep me from framing- that helps ALOT! There are lots of retirees looking for something to do and get out of the house 1 or 2 days a week - they are a great resource for help. They also have a better work ethic than most employees I have come across and let go.

Partnership - I don't recommend it..

my 2 cents, and my fresh pain from ending one recently. An expensive lesson.

Elaine
 
Business partnership is like a marriage: At least %50 of them end in divorce and are messy.

The only partnership you want is with your bank, because you cannot avoid it.

Better hire, because you can fire.
 
My "partner" is my wife. Look up the stats on divorces caused by working together! Horrific!

The only reason our situation works is because we have clearly defined and separate roles. She's mostly outside sales + book-keeping. I run the production side + handle certain commercial accounts. The more time she spends outside the physical 4 walls of the business the more harmonious our personal relationship. Irrespective we still spend too much time talking about the business when we are "not working".

In "previous lives" I have had working partners. One of the problems I have observed is that people change over time. So what may work at the beginning may not later on.
 
Thank you for all of your advise.
I've been in business for 5 1/2 years, and have been through all the hard stuff.

I guess I'm just feeling a bit like the business can't grow any bigger on my own,(not enough hours in the day) and I have had employees and that is a good thing, (have one right now)But when they are here working, all I can think about is how much they are costing me.

I haven't made any decisions, I am just praying about what to do next . Sometimes I wish there was someone who would take some of the pressure off.

I guess watching those "Designing Women" rereuns doen't help. They always seem to have fun.(I know it's just TV)


Wouldn't it be great to share a space with someone who ran thier own business but was in the same building,

Like maybe a Coffee shop in your business with someone else owning and running it. Working togather but not mixing money.

Oh well, I'm still thinking about it, and would love to hear some more success stories.

Jennifer
 
I am going to drum all the negative responses out of my head, I can't hear you I have beans in my ears......I am just getting ready to enter in on a separate venture with two other partners with the hopes of bailing me out of this leaky boat I call a store......I trust them both completely and we already have a great working dynamic in place. All three of us bring something different to the table and I have great hopes that it will only lead to bigger and better things for all of us. No blinders on, I swear.

I think it is all about expectation and communication.
 
Kathy Sorry we're all so cautious. Good luck with your new venture, at the very least you have the right attitude
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No way, no how. Nope. Never would. Much like Andrew said, my hubby is my business partner, but we have fairly distinctive roles. We are really a two in one business; he is a photographer. That helps. If we were both framers, I would kill him.
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Right now, I am overwhelmed with the many different aspects of our business, but I don't even want an employee. I am too much of a control freak. Besides, no one would want to work for me. An employee wouldn't last a week here. It's just my two cents, probably not worth much.
 
Originally posted by J Phipps TN:
But when they are here working, all I can think about is how much they are costing me.
Jennifer
If you cannot see where they are making you money, then there is some other component of the business that is out of whack. Employees are just another cost of doing business and their production level should not just take up the slack, but should add to your bottom line and benefit you directly in non-monetary ways. They should be making you money that you could not make for yourself. I know well where you are coming from on this count. I once felt the same, but I wasn't looking at the bigger picture.

Oh, in your position, I would nix the partner idea. You're far enough along that another boss in the shop wouldn't be good for business.
 
Also, Jennifer, don't forget that partners want to be paid too. They also might want to go to trade shows, a company car and other such perks business owners get...

Dave Makielski
 
Originally posted by wpfay:
</font><blockquote>quote:</font><hr />Originally posted by J Phipps TN:
[]
You're far enough along that another boss in the shop wouldn't be good for business. </font>[/QUOTE]This was my concern as well. I've had people approach me about jumping on board. NO WAY! It's my sis-in-law or nobody. Finding a good partner is like striking gold. I wouldn't press my luck!
 
Kathy let me know how it goes.

Also are they going to be framing or are they adding other elements to the business?


And Mecianne, You are so lucky to have your husband on board. It's just the companionship at work and someone else to feel the pressure with, that I would like to have.

My husband has a job and is very happy and wants nothing to do with my work.

He helps with heavy lifting and moving but short of that he has no desire to do any business things.
But he is a great guy! He has even thought maybe a partner would help.

Still thinking!
Jennifer
 
Wally and Dave make very good points above, about your comment:

...I have had employees and that is a good thing, (have one right now)But when they are here working, all I can think about is how much they are costing me.
If you think an employee is expensive, keep in mind that a partner would want more compensation. The only upside might be that the partner should be in a position to generate enough extra revenue to cover the added cost. Maybe.
 
Jennifer, I have been in a partnership with my parents for 23 years. It has been a good experience for many reasons:
1)we all started on the same page.
2)we are all good workers willing to do whatever work needs to get done to get the job done. We all clean the toilets, etc.
3)we help each other out with projects outside of work so it is a natural extension to do so within work.
4)there are other people to kick ideas around with.
5)we are dependable people.
6)we have different strengths/weaknesses.
7)we are in a culturally diverse community where a number of the different cultures seek out, like, and respect family businesses because that is the way of business in their own countries.
8)when things got rough (serious illnes, death of one partner, broken arms all at the same time), the bond was there to keep things going.
9)if business isn't going well, the family is aware and has a greater incentive to make it better. a family business is more than just a paycheck.

On the other hand, the down side is:
1)the fact that we are family overshadows decisionmaking on a strictly business level sometimes.
2)there is no family leave in a small business - when you work with your parents, you are taking care of them as they age. You can't fire them. You find the jobs that they can keep on doing so they can continue to participate.
3)you never get away from the business.
4)when you are really pissed at a family member about something, you still have to work beside them without customers picking up on it. - which brings up another good point -

10)you learn how to make things work because you can't ever not be family.

Jennifer, it doesn't sound to me like you are really interested in a "partner" so much as someone who would be a soundboard, would help out where and when needed, lighten the load, etc. when needed. That sounds to me more like a friend - certainly more than many employees might be.

As to your idea of having another business share your space, that is what we are working toward now. As we are nearing retirment, we are tearing the store apart to see if we can bring in a mix of several other small businesses such as ourselves. We too, feel that we probably can't grow our business too much bigger for our area and customer base. The mixed business model makes sense for our property.

Hope this helps!
 
Terry, great and thoughtful post. I too was in a family business with at one time my grandparents, parents and several siblings and cousins all working at the same time. I especially liked #10:

"you learn how to make things work because you can't ever not be family."

So true.

You also stated that if things get tough, family pulls together to make things better. Also, family is willing to suffer a little financially if for the betterment of the company.

Thanks for a very thorough post.

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Dave Makielski
 
In a family "partnership", I guess the family relationship takes precedence over the business relationship -- like in a business run by a married couple, there's a pecking order, there's mutual respect, and there's understanding for one another.

But sometimes even a partnership of siblings can fail, and that could get terribly ugly. I saw that happen once, more than twenty years ago. To this day, the brothers do not speak to one another.
 
After having issues with employees, I have decided to "keep it in the family" I would rather have my hard earned money paid to a family member that helps me than to resent paying an employee for the work that they are not doing. I have had the worst experience with employees in the last 4 years. The best luck I have had is with hiring my mother, my niece, and my mom's retired friends. I say...Keep it in the family!!

my 2 cents

elaine

p.s. I worked for a family owned business for 22 years - it can get ugly - especially when there is a LOT of money involved and control issues.
 
Originally posted by J Phipps TN:
Kathy let me know how it goes.

Also are they going to be framing or are they adding other elements to the business?
Jennifer,
This venture is a separate business from my frameshop. I have hopes of raising some cash to move the store when my lease is up because I have no desire to sign a new lease. We are starting a new entity and it will be a level playing field. I think it would be hard to take on a partner with a business I have had on my own for 4 years. It would be hard to give up the control. But with the new venture we are starting from scratch so we can divvy up the control from the get go. Unless you need a financial contribution I would avoid a partnership in your situation, you clearly have done well for yourself on your own.
 
Instead of calling this new person a Partner... How about a Manager? Roles could be defined and ideas get respect from both sides, but it would still be YOUR business and if a 'divorce' is necessary, at least it will still be YOUR business when the dust clears. PS I have been in partnership with a 'friend' (worked out badly) and a spouse (we only want to kill each other about once a week now; down from several times a day when we started out)
 
Let me tell you a story about a different kind of partnership.

When Kim and I opened our shop 25 years ago, we had no idea of what we were doing or how to do it - we had each been licensed as sole proprietors and we threw in our lot together - I was the framer and she was the retoucher. She fixed the pictures and I framed them.

We had known each other about a year and worked for the same photographer and we were friends from the get-go.

We found a store front - divvied up the rent according to who was expected to bring in what - I paid 75% of the rent, she paid 25%. I paid the gas - she paid the electric and the phone.

That was it - nothing on paper - that was our "arrangement."

About 10 years into it her first husband left her high and dry so I took over the entire rent and the electric bill.

She continued to pay the phone bill until she became ill last year.

She has been and always will be "My Business Partner" because her energy and ideas and spirit made my shop what I hope it will continue to be after her death this week. heck, she even named the shop!

She was always there for me - she could take care of my framing customers, pick out framing and just say, "Mar will call you with a price tomorrow." I could do the same for her photo customers - although the digital/home computer revolution changed the amount of customers she had over the years. Before she died she had been moving in the direction of being pretty much a digital artist doing animal portraits but she was still my partner to the end. I mean, somebody has to frame the art, right?

So, like a relationship, there are all kinds of partners - some folks live together, there are domestic partnerships, common-law and real marriages. Some work out well - some don't.

If you can be lucky enough to have what Kim and I had you will be lucky indeed.

I realize that this post will make a lot of you business folk absolutely cringe and for this I humbly apologize!
 
Framar, my heart goes out to you after reading about your wonderful experience with your partner and of her passing. You are correct - you are so lucky to have had such a wonderful partner relationship!

Sometimes the most important lesson a partnership can teach you that there is more to life than just "business".

May the future bring you only the best - both in business and in non-business.

Thanks for sharing.
 
As the saying goes, "Been there, done that, won't do it again!"
 
Jennifer, Kathy and anyone else interested in a partnership:

Watch the first half of the Martha Stewart movie.

Then see your accountant and lawyer and create an exit stratgy and agreement.

Then have all the parties agree to the agreement before you make an agreement to partner.

Mitch
 
What timing! A new customer just left, and he happens to be an old boss from back in my restaurant days. Of course, we got to talking about the old days. He ran a restaurant with 2 partners and it did not end well for any of them. This happened with 2 very successful restaurants that I worked for. Things were great in the beginning, but eventually communications between partners broke down, someone was dishonest, old friendships fell apart, business fell off and both restaurants finally went bankrupt.
I was in your position a few years ago and seriously considered going into partnership with another local framer who also needed a break, but I decided in the end that our styles were too different and I just had to wait until the right employees came along.
Good luck with whatever you decide.
 
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