Question on partnerships

[breakthru99]

I started an E-commerce Import performance parts and accessory site over a year ago, and I invested a lot of money into my webiste and advertising. I took all the risks and put all my time into growing this business by myself. Now my website is making sales, I want to expand into a garage and do the performance parts installs, but I needed someone to handle doing the audio and video. Thats where my business partner comes in. He would handle all the audio installs and questions and he wants to invest close to what I have into the business. I want to make it fare as possible, I just don't want to lose my company name or my website if we ever split. I was thinking of doing it 51/49. Can anyone help me on this. Thanks

[Cole Taylor]

What are the advantages of a partner over an employee? Are you looking for a partner to contribute capital?

[BusinessAdviser]

What exactly are you asking?

[ltressel]

I started an E-commerce Import performance parts and accessory site over a year ago, and I invested a lot of money into my webiste and advertising. I took all the risks and put all my time into growing this business by myself. Now my website is making sales, I want to expand into a garage and do the performance parts installs, but I needed someone to handle doing the audio and video. Thats where my business partner comes in. He would handle all the audio installs and questions and he wants to invest close to what I have into the business. I want to make it fare as possible, I just don't want to lose my company name or my website if we ever split. I was thinking of doing it 51/49. Can anyone help me on this. Thanks

I think that you should consult an attorney. The attorney can advise both of you on certain aspects that you and your possible partner are not comfortable discussing such ownership, profit sharing, responsibilities and liabilities, etc.

A good attorney can detail these subjects and make it so that no matter what happens, you are both clear on paper as to what each of you are entitled to what ever this business would bring.

LT

[breakthru99]

What are the advantages of a partner over an employee? Are you looking for a partner to contribute capital?

Yeah, he is going to contribute almost money as i have into it.

[breakthru99]

I think that you should consult an attorney. The attorney can advise both of you on certain aspects that you and your possible partner are not comfortable discussing such ownership, profit sharing, responsibilities and liabilities, etc.

A good attorney can detail these subjects and make it so that no matter what happens, you are both clear on paper as to what each of you are entitled to what ever this business would bring.

LT

Ya thats exactly what I need to figure out. Thanks! I wonder what a attorney charges for writing a partnership agreement.

[Cole Taylor]

Food for thought:

50k (replace with an actual number) in a developed, revenue generating company is NOT equal to 50k in a start-up. You need to be compensated for the risks you've taken to get to where you are today.

Before any negotiations, I'd suggest that both you and your prospective partner agree on the value of the business today. Value it BEFORE he invests then it becomes simple math.

[breakthru99]

Food for thought:

50k (replace with an actual number) in a developed, revenue generating company is NOT equal to 50k in a start-up. You need to be compensated for the risks you've taken to get to where you are today.

Before any negotiations, I'd suggest that both you and your prospective partner agree on the value of the business today. Value it BEFORE he invests then it becomes simple math.

I agree, Thats what im trying to explain to him. I took tons of risks and grew this business all by myself. Thanks for the help!

[Iota]

You have invested time and money into this business of yours. Your partner is coming to invest money and together you two will invest time again into it. I think you should evaluate how mcu you have invested with regards to your time, monetise it and together with your partner visit your attorney to discuss how to go about it. It is not only an issue of the controlling interest, it is necessary that you are fair to yourself and your partner in every bit of it.

[rogercbryan]

I think there is a simpler solution to all this. Why don’t you keep 100% ownership of your site and your online sales platform and then form a new venture with your partner for the instillation. If you are going to be equal partners (financially) in the new venture then there would be less to have to consider. If your new partner had no part in helping you get your online business going then why would they be entitled to any part of that?

You of course need to contact an attorney before signing any documents but I think you may be better suited to start a completely separate company with your new venture. If the garage thing does not work out you risk loosing your web sales company too. Keep them separate and you’ll sleep better at night.

[Gr-Andy]

I think there is a simpler solution to all this. Why don’t you keep 100% ownership of your site and your online sales platform and then form a new venture with your partner for the instillation. If you are going to be equal partners (financially) in the new venture then there would be less to have to consider. If your new partner had no part in helping you get your online business going then why would they be entitled to any part of that?

You of course need to contact an attorney before signing any documents but I think you may be better suited to start a completely separate company with your new venture. If the garage thing does not work out you risk loosing your web sales company too. Keep them separate and you’ll sleep better at night.

I agree. A separate spin off. Its not that hard maybe alittle expensive but oh well. Protection is worth the cost you pay.