|Wednesday, July 23, 2014
|[Monday, May 23, 2005]|
|A friend wants to bring me into his cleaning company as a partner. Everything is in place. He just needs the extra help and expertise. What should I expect, and what questions should I ask him before I say yes?
|Blended/Skip/Cooperative Cleaning - Fred Thomas|
|Answer # 2:|
Partnerships are a lot like marriages. They can try your patience in several areas:
1. Differences of opinion can lead to heated discussions.
2. The issue of trust is challenged when one feels the other
is not operating in the best interest of the partnership.
3. When one partner contributes more than the other, does
that change the compensation split and how budgets are
4. Can ego and issues of control remain in check?
A good starting place is to develop a very detailed job description for each partner. This should cover all expectations that each partner and their MATES will contemplate. It should also stipulate how the company vision and focus will be fulfilled. Next, spend time troubleshooting "what if" scenarios.
Don't forget that legal counsel can draft the compensation package and a buy out clause should the partnership end in a divorce.
National Pro Clean Corp
Answer # 1
A true and legal partnership is established by a legal agreement describing the terms and conditions of the relationship. This would cover everything from who is responsible for what operations to what happens if the partnership is dissolved by mutual consent or the death of one of the partners.
The agreement would spell out the salaries of each partner and the financial responsibilities each has.
In a going business, the startup costs have been borne by the original entrepreneur. Naturally, his expected return on investment (ROI) will be greater than that of someone who comes in to assist without any financial contribution to the enterprise.
If you are coming in as an environmental engineer, that expertise will be your contribution to the growth. Among the first questions you will want answered are, what are you expected to do, and how much you will be paid for your services? Are you expected to sell contracts, train employees, or clean carpets when the need arises? What sort of extra help is needed?
Defining, and putting in writing, your exact job responsibilities and the reimbursement you anticipate will make the partnership run much smoother.
You may want to explore other legal business formats or ways to participate with you friend as partnerships can be tricky and bring with them liability issues that you may want to avoid or limit. Talk to an attorney before you sign anything, you'll be glad you did.
Lynn E. Krafft, ICAN associate editor for ATEX