# What to do about a potential partner



## zymerguyer (Feb 15, 2007)

Hello, I have recently starting getting help for my printing business from a long time buddy of mine. His full time job is a commodities broker and needless to say he knows A LOT of people and is extremely good at sales. 

In the first week of "helping me out" he got me a $3300 job from a local high school and already has a bunch of other prospects. I love having him on board because it lets me concentrate on what I do best, the printing, and not have to worry about the sales portion of the business, which I've found out I'm not too fond of.

Now he wants to partner with me. He wants to buy in for around $12,000 which would be the cost of a new 1 head embroidery machine. He's offered to take 10% of all sales up to grossing $40,000 and after that he'd receive a 30% cut. I think the cut is pretty resonable just because of the fact that I'll be getting tons more business. Also, it would be a year to year deal, so I'd have to buy him back out if he wanted to leave the venture.

The problem is that I don't want to partner just because I'd think that would cause more headaches in the long run and I'd just like him to do sales, where I'd offer 12-15% commission for every sale, even ones he doesn't get, and that would be because he'd help with the structuring of the business and helping it to run more efficiently. It sounds like the only way he'd want to do this is to partner and not be just a general salesman.

I was wondering if anyone had any other ideas regarding what else i could offer him to stay on as a salesman without becoming a partner. 
Thanks

-Travis


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## red514 (Jul 21, 2009)

I like the sales percentage idea.
do you need the 12,000$ for a new 1 head embroidery machine? why does he want to buy in?

In my opinion i would not partner up if you don't need to.


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## hostingdiva (Mar 31, 2006)

Hi Travis:

I can understand why he wants to partner - he's helping you be successful and wants a piece of the action. You should be up front about not wanting a partner and see if there is something you two can work out. Maybe you can come up with a more generous commission structure to where he's getting a piece of his hard work but he's not a partner. 

You should keep in mind that if he ever sues you, there may be a problem if he helped "with the structuring of the business and helping it to run more efficiently." These are "partner" type responsibilities and a court may see that even though he wasn't a partner on paper, he was in action and in treatment. So, if you don't want a partner, make sure he's not doing partner type things.


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## red514 (Jul 21, 2009)

good point hostingdiva

regarding "partner type responsibilities", is it possible to have a separate contract for that? i see that as a consulting service.


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## zymerguyer (Feb 15, 2007)

Thanks everyone, yeah I wonder if I should just bypass all of the structuring parts that I'd like him to help out with and just offer something that has only to do with sales. I should just let him know my position, I think.


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## charles95405 (Feb 1, 2007)

why not structure a deal in which he gets a % of what he brings in...I use a percentage of the GROSS sale..that way sales people do not know the actual costs and it is to their advantage to keep the price up appropriately. to base any commission on bottom line profit means you need to divulge your overhead...and I am not in favor of that...nor am I in favor of any partnership..particularly with friends as this just means that sooner or later the $$ will raise it's head and a friendship goes away


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## thutch15 (Sep 8, 2008)

zymerguyer said:


> Thanks everyone, yeah I wonder if I should just bypass all of the structuring parts that I'd like him to help out with and just offer something that has only to do with sales. I should just let him know my position, I think.



EXACTLY...there is a reason he wants in: You are running a good business. I would like to buy into a little of Under Armour, but that is not going to happen. You just need to pay a good commission, BUT keep 100% ownership.

The only ship that does not sail is a partnership!


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## zymerguyer (Feb 15, 2007)

thutch15 said:


> The only ship that does not sail is a partnership!


What a line! Maybe I'll just print that line on a T-shirt and meet with the guy; that way he'll get my point before I even say one word!

No, seriously, I'll just offer him a strictly commission based pay and hopefully he'll accept it. I would hate to lose his sales potential.


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## gerry (Oct 4, 2006)

I totally agree w/ everyone...Ive had partners...friends, family etc. and always turns into at the very least..a major headache. Offer him a percentage and keep your co. to yourself. I heard along time ago 14% is average for a salesman and offered it to a "partner" a few years ago..he accepted and worked well for both of us until he decided i was making to much money..so i canned him and downsized...turned out to not be worth it in my case.


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## Austin300 (May 24, 2009)

Great line about the ship and partnership


I've had partners in business and we were friends.
It took 10 years for us to get on the phone and
talk like we used to.

Nothing worse for a business. You can add the
guys wife and her opinions in that "partnership"
along with their family members and all their
ideas also.


Never again will I go down that road.


Be the Captain and guide your ship.


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## kriscad (Dec 18, 2006)

no no no to partners... pay the guy a commission


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## Twanabee (Sep 14, 2009)

I would have him as an independent rep. You would give him usually 20% on all orders sold in his territory even if he did not sell them. You can find a contract on line for this. The standard contract usually leaves it that either party can cancel the contract for any reason and addresses issues such as samples, equipment and such. If this guy is as good as he sounds, he should jump at this deal.


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## BaySic (Apr 30, 2008)

charles95405 said:


> nor am I in favor of any partnership..particularly with friends as this just means that sooner or later the $$ will raise it's head and a friendship goes away


This is how I feel also, I have lost friends due to partnerships going bad, and I'm currently involved in a joint venture with a very good friend of mine. I'm getting screwed on the business deal we are involved in(doing 80% of the work and getting 50% of the money), as soon as our lease is up the partnership is also. I would strongly suggest you try to find a salesman deal both of you are happy with and go with it.


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## scarface1899 (Aug 7, 2008)

NO partnership.

I had one and sooner or later someone thinks, maybe it isn't even true, that he or she works more then the other one and is not happy with the amount of money he gets. Work is getting down and also the friendship.

I recently had someone who wanted to buy into my company, I was straight forward and told the guy no cant do, although I wanted to do something together. So I offered him another deal, we started up a new company under another name, both put in 50% of money. Embroidery and printing is done by my other company. Gives us more production and what comes out of it we split. If it doesn't work just discontinue the partnership, no harm is done in your company structure.


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## DTFuqua (Jun 26, 2008)

If it is a real friend and not just an acquaintance, you should tell them your feelings/reasons for not wanting to damage such a good friendship and talk about a sales contract. Or you could go partners on a seperate business that he could sell along side of what you do now. Do you do sign work? A solvent printer for signs, wraps, banners and full color T-shirts on a short run setup could make a large increase in income.


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## Fbomb (Jul 29, 2007)

Austin300 said:


> Nothing worse for a business. You can add the
> guys wife and her opinions in that "partnership"
> along with their family members and all their
> ideas also.


hahahaha...VERY true!

I agree w/ most in saying to keep sole ownership (since you are already established)...BUT you should work on some kind of bonus (for x amount of business/sales) to keep him happy and driven.


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## zymerguyer (Feb 15, 2007)

Fbomb said:


> hahahaha...VERY true!
> 
> I agree w/ most in saying to keep sole ownership (since you are already established)...BUT you should work on some kind of bonus (for x amount of business/sales) to keep him happy and driven.


Yeah, I really want to keep this guy going with me. I think the only option is to offer him a nice incentive-based package to be strictly a salesman. I'll keep you informed on how it goes.


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