So I originally was going to do this by myself for a while. But an old friend of mine I also used to work with came to mind so I got ahold of him and ran across the thought of bringing him on as a partner with me… So my question is. How would or should I handle the money side of things to keep the biz going. How should I structure it? 60/40 on resi’s and storefronts? but then how much to put away for re-investing back into the biz… . Sorry for the questions. but this is new to me that I never thought about.
Alright, I just finished a divorce. First and foremost YOU want to hold on to the majority of control, so don’t be 50/50 partners. Sure you might split up the responsiblities 50/50, but don’t be nice (foolish) like I was.
What we did was split the money into 1/3. Each of us got a 1/3 and the business got 1/3, this was after taxes and bills. I’ll say we got by and made decent money but that left no where near enough money for the business to grow without taking on debt.
No clue what you should do, but that is what we/I did for 5 years.
As Dave said, keep control. 50/50 partners almost never works out. Someone needs to be in charge.
If you’re going to do a 60/40 pay split, make sure it’s after expenses. Otherwise you could end up making less than your friend.
Friends can be a blessing, or a curse. Never hire anyone you can’t fire.
In my opinion, giving the new “partner” 40% of the take is pretty generous. Is this new partner assuming any of the risk? I’d pay an hourly rate while you train them. Then once they’re up to speed on the work, you could give them a percentage of the job. If they do the job solo, you could give them 25 or 30%. If you’re working together, 15 or 20%. At those lower percentages, you could eliminate the need to calculate expenses and just take the percentage based on the gross. Working together he’d get lower percentage, but more work would get done in the day and he could end up making more than if he went out solo.
The guy that I have partnered up with gets 33% of each job that he works with me. If he does the job himself 50%. If there are major headaches with the job like far distance traveling, adding it at the end of a day and working very late, I will increase the percentage.
He has his own equipment, his own van, everything. He’s owns his own window cleaning company and has over 20 years exp. He said hes tired of flyering, trying to get his web page higher in ranking, mail outs, the whole nine yards. He just wants to show up and work. He’s happy with the arrangement, and so am I.
Sometimes he gets calls and we go do his jobs. As a matter of fact we are doing one this morning.
Sorry to be negative, but I wouldn’t do a partnership of any kind. In my opinion there just isn’t a need for it in a start up window cleaning business. I had a partner before in another venture and I really disliked giving him a huge chunk of the earnings. The only partnership that I would advocate is a wife and husband partnership. At least you both get to keep all of the profit. What exactly are you getting from this guy? That is a huge question. Let’s take this scenario for example. You guys start up together 49/51 % (whatever % you choose). He puts in 150 bucks to purchase a window cleaning starter kit, you put in 150 bucks to buy a starter kit. You both labor and get your said 49/51 %. Really, so far, the other guy has only made a 150 dollar investment. Let’s say you guys purchase a couple ladders and some other equipment equaling 1000 bucks. Ok, that’s another 500 dollar investment each. Once you get the ball rolling and start getting jobs, you can use the money earned to buy equipment as you need it so you really only started with a 650 dollar investment each. So, 5 years down the line and you have 10 employees and neither of you are doing any of the actual labor anymore. Even though he is not laboring, you still have to give him 49% of all profit. All this for a small 650 dollar investment he gave to the business. What I would do is purchase a few items yourself, hire someone and give them a commission. Nowhere should you ever tell him that you are partners of any kind. He just gets a percentage of the labor he does. Then down the line, you get to keep all of the profit.
My main reason is because he was an awesome salesman and I trust him more than anyone… Me and him together were the 2 top salesman in the Chicago Region of the Midwest which is huge. For Tru Green Chemlawn. And that was selling lawn care over the phone. So I figured we could make more ground work together as a team and push one another and later on he could be in charge of a sales team / cleaning crew or something…
My old partner and I worked for another company when we were 16 or so. We kicked ass on jobs together. He was/is fast as all hell and I charmed the ladies. We trusted each other, we brought skills to the team which balanced each other out. We probably did make more head way the first couple of years being a team, but as we started to grow it slowed us down.
I understand your sentiments and appreciate what you are trying to do, so my advice would be to draw up everything in writing before the first dollar is earned or spent and consult a lawyer before signing it all into existence. Having said that, I personally would still stray away from the whole partnership thing. Oh, and funny thing, I also worked for TGCL in Albuquerque. This business is NOTHING like that business, I’ve been doing this 7 years and I know.
Then you should just hire him as a salesman and pay him a percetnage of each job he brings in. Maybe he can sell lawn care, but does he know anything about window cleaning. BTW, I fired Chemlawn, they made promises they couldn’t keep and still will not stop calling me trying to get me to sign on with them again for a lower and lower price. You may be able to do that with lawn care, but you can’t keep cutting prices on your windowcleaning if you want to make any money. You better test the guy out before you partner up with him. He may just suck the life right out of you and your compnay.
Like Steve said, windows are a whole different business than most anything else! If your giving him that much percentage just to be a salesmen, your shooting yourself in the foot. Giving him that much commission if he is working the job by himself might be fine, but there are alot of headaches outside just sales and cleaning that he’s probably not going to be handling.
I’ve been told before, “Hey if it gets where you think your paying me too much, you could always just cut me in for a percentage and we could become partners”, NO WAY, I will partner with alot of people for alot of businesses but NOBODY touches MY window business.
It’s work getting started and building a clientele but I can tell you from experience it is way simpler and less time consuming in the long run than even a painting business (that one I may consider a partner in:D), don’t give away the cash cow!
I agree here. Just hire the guy. If he proves to be worth his weight in gold after a year or so, offer him 10% non-controling interest instead of a raise. Should be just enough to keep him moving the business forward. Right it up with a lawyer and increase the ownership % every 3 to 5 years by 5 or less %.
partners NEVER work… like ray said hire the guy… maybe everytime he brings you a customer you can throw him a $20 bonous or somthing and if he does the whole job you can give him alittle more somthing along those lines.
