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Partnering with growing business!
Hi Everyone,
I'm new to the forum, and I basically had a few questions. But before that, here's some relevant info about me: I am a relatively young guy and currently have a nice job at a huge corporation that pays very well. I am proud of where I am right now, but feel that I could be doing a whole lot more. Rather than working for SOMEBODY, I would prefer to go out on my own, and try to involve myself directly with a business. I realize that there is the possibility of failure, but that is a risk I fully understand. Being that I am still young, I feel that I will be able to pop-back in the event of such failure. I also don’t have dependents or any other huge obligations at this point in my life, so that’s a major plus. Now here’s my situation:
What I would like to do is partner up with a semi-established and expanding business. This business I am eying is currently established for the past 9-10 year or so, so it’s fairly young. It’s a business that caters primarily to the automotive market, and the product is currently created using skilled manual labor. However, like many companies, this company has decided to outsource the labor to an outside country. In addition, the outside country will be able to mass-produce the products since they will be using machinery to create the products. This way, these items will be produced more quickly, efficiently, and consistently, hence the cheaper cost. The owner showed me the new product being produced outside, and it is definitely of high-quality. Now, the owner of this company is a guy I have dealt with before. I used his service before and was so happy with the results, I actually provided him about $25-30,000 in sales due to referrals, but that was just the beginning. I referred individual customers who were interested in his product. The owner was obviously happy since any additional orders mean more profit to him (his primary customers are various local dealerships). It turns out that he wants to expand and create additional accounts with various dealerships and other large-scale buyers. And that’s where I would like to help out.
Basically I want to market his product and create new accounts for him. Right now, I can refer single persons to him, but I think I am capable of getting LARGE/bulk orders. Obviously, I want to get paid for my efforts, but I want to know what I should do. What I don’t think I want to do is actually become a PART of his company. Rather, I want to be a consultant to them, OUTSIDE the company. Reason is, I don’t want to become sucked in by the company and have to work for somebody. And even though I trust his products, I don’t want to become a reseller either. The reason is I don’t want to purchase his products to resell. Instead, I want to be a middle-man of sorts between this company and dealerships/large-scale buyers. I don’t want to invest too much money since I want to do this “on the side” to begin with. For what I want to do, I won’t be taking away more than I put back, i.e., I know his profit margin, and if I take a percentage of that as a commission, he still keeps a huge portion by essentially doing nothing but filling my orders/accounts. So what should I do?
- Should I establish a company of my own that provides this company with some sort of consulting?
- If so, how should I establish a company and what steps do I need to take?
- What type of contract should I come up with? I want to make sure we draft a document which protects me and makes certain that I get paid a set amount, etc. Who should I seek for help on this matter?
- How should I present this information to the owner? Like stated above, I have dealt with him before (both positive/negative experiences)
I didn’t go into TOO much detail since I don’t want to bombard anybody! But I will add more information if that is needed.
Thanks in advance for any forthcoming advice!
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