Hello everyone.

My husband and I are planning to start a small business with a third partner. We are all in our early 30s and have worked for The Man our whole adult lives. We aren't silly enough to think that starting and owning a business will be anything approaching easy, but we feel the satisfaction and freedom of working for ourselves will offset the drawbacks. Are we wrong? If you're going to be working your backside off, isn't it better to do it for yourself instead of a faceless corporation?

We aren't going about this foolishly. We know it will be lots of work and loooong hours. We know it requires planning and foresight, with a mixture of both short and long-term goals. We know it's a risk, we know it will take a toll on us. But ISN'T IT WORTH IT?

Yes, the Grass is Greener... but it's just as hard, if not harder, to cut.

It is fun and worth it, and hard and sometimes questionable. I, myself, can only work for myself. It is very hard for me to think about punching in on a time clock... or putting my tires in those grooves on the freeway and commuting to work. I like the 10-steps-to-my-desk commute.

I would suggest starting out slow at first and not quitting jobs until you are making more than you ae bringing in now. I would have 3 to 6 months of living expenses put away too, before going all-out.

Now, as for the third party/partner... I have only seen one partnership that has ever worked, where they didn't end up as enemies. Think that one through. I have seen the best of friends who were mortal enemies after even a short time in business together.

If you do go into it as partners... then I would make sure that each of the partner's responsabilities is written down. And, I mean everything... even down to who turns on the lights in the morning and who turns them off at night. Making that very clear up front might save some of the problems, but not all.

Good luck. Sharpen those mower blades!




Jeff S.
Night Sky Murals
Award Winning Murals

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Yes it is worth it,However why do you want/need a third partner? Hire an employee or 2 if they don't workout you can replace them!Do you have any particular business in mind?

We need the third partner because HE has the formal mechanical/technical skillset, the certifications and the network that will ensure a shot at success. Myself, I have more years of practical experience running a business than you can shake a stick at; everything from accounting to customer service. My husband is highly skilled in sales and service, knows the mechanical part (although he's not certified - he's just smart and knows his own stuff) and has worked in corporate environments. I have both attended and exhibited at trade shows.....basically, it boils down to the three of us pooling our skills and working together to make one helluva team. (There is also the aspect of our friend being a really great guy who has had an indecently hard life, and if things work out even half as well as we hope, it will not only improve our lives but his as well. We care deeply for him; he's a special dude.)

This isn't something we dreamed up last week. We've been talking it over, smoothing out our ideas and brainstorming for over a year. Most that time was waiting for our friend to complete his formal education. He has recently graduated and has several jobs lined up in the industry to get his foot in the door. None of us intend to quit our dayjobs unless and until we have so much work that we simply cannot keep up and demand insists we turn full attention to our business. Even then, my husband my keep his job on a part-time basis to keep insurance coverage for our family.

Our next steps involve our friend getting a position, making contacts and learning the practical side of running a similar business. We know businesses can be very industry-specific; a janitorial service will be run quite differently than, say, a Mom & Pop convenience store. We have baby steps and short-term, mid-term and long-term goals in place already. We have no intention of jumping headlong into anything. That's a sure recipe for failure.

We know we will have to write a business plan; we know we will have to set down all aspects of the business on paper; we know we will need funding; we know it will be a risk and a struggle. We know there will be conflicts amongst us from time to time, too. My hope is that we are all like-minded enough that we will work together as well as we suspect we will. The good news is that my husband and I have already worked together before and it went wonderfully, so we do have SOME experience with that.

The naked truth of the matter is this: we have reached the point that we'd rather try and risk complete failure than not try at all. I think I shall rapidly go insane if I'm ever forced to sit in a gray little cube again, with an inept and ineffectual boss droning in my ear about TPS reports.

You know... in reading your last post, you shed a lot more light on things and you are doing so much that is right. I have suggested to other people that they get a job with another company in the industry first and have had my head torn off. What a better way to get to know the industry then while someone else is paying you as they train you. Good for you guys.

You know... go for it. What will you really loose if you are all working and just working this on the side at first?

Good Luck



Jeff S.
Night Sky Murals
Award Winning Murals

Watch us on FINE LIVING...
http://www.youtube.com/watch?v=eUhRFIL2A38

www.NightSkyMurals.com (Product)
www.DarkSkyMurals.biz (Business Opportunity)

Featured in...

* The Robb Report's "Luxury Homes" magazine -
* Angies List
* in Affluent
* HGTV's show - "I Want That"

Sometimes it's greener, sometimes it's downright browner and sometimes it's just plain dead!

Don't give up your day jobs until you're sure there'll be paycheques!

Some thoughts...

One thing that employees never notice are business cycles pertinent
to the sector/industry of the business. As an employee, you get up go to work, go home and every week or every 14-15 days, you get a cheque.

Being in business for oneself isn't quite so simple.

Sometimes, you end up sitting at your desk looking at your bank account wondering if you'll ever see a paycheque. Nevermind worrying about whether the one you do get will last until the end of the month.

Be aware of your industry's business cycles, where they are and where they're going and plan and budget for the lean times and contingincies... You never know when the roof is going to leak or a pipe will break, etc.

You'd be surprised at how easy it is to run a business for the first few years, while it's a simple matter of in and out, it's easy, when it becomes tricky is when you are juggling accounts payable, accounts receivable and payroll while still trying to find the time to do your payroll and get out of the office in time to pick up the boy from little league.

I think the hands on training for business management is a great idea. You can check with your local business incubator groups to see if they offer training courses that will be useful to you. They can also help you with setting up your business early on, so it is easier to run when it gets trickier.

Having a good support bank to fall back on, I believe will be the difference between making it and not. Having a mentor will also be helpful.

One good piece of advice I can give you, from personal experience, is to not only lay out and define what everyone's jobs and responsibilities will be, write and sign a partnership agreement. There is nothing worse than having a falling out with a partner but having nothing on paper. (It cost us four years and over $30,000 not including emotional strain).

You'll also want to look into Key employee and/or partnership insurance... I know you guys are young and don't expect to die anytime soon, but life has a way of doing exactly what we don't expect. With insurance, if something happens to either one of the three of your, your partners don't end up in partnership with one of the partner's family members, or kids or worse.

You've come to the right place for networking and brainstorming. There are lots of members here at varying stages of their own businesses and everyone has the most unique insights.

As for the grass being greener... well, getting up at 8:45 sure beats all H E double hockey sticks out of getting up at 5:45!

Good luck!

Tina Brooks, VP Marketing
Brooks Pepperfire Foods, Inc.
Makers of Peppermaster Hot Sauces
http://www.peppermaster.com

Eat more peppers!

Thank you, Jeff and Tina, for your comments.

Our friend graduated from the Motorcycle Mechanics Institute in Phoenix - if you're unfamiliar with them let me assure you it's not a flash-in-the-pan outfit. He paid $30k for his 2-yr education, graduated top of his class and MMI is the leading source of techs and mechanics for virtually ALL industry players. Race teams tap their mechanics from there, privateers start there, etc. The instructors are business owners themselves, or racers, or work in OEM or aftermarket companies.

My husband has ridden motorcycles his whole life, starting with a 50cc dirt bike when he was 3-years-old. It was our love of bikes that inspired our friend to attend school in the first place. As time passed we all came to the realization that our working lives thus far have almost painted us a Yellow Brick Road to where we are now headed. But how stupid would it be for us to rent a building and go into all sorts of debt just because we can? Better to start slowly and build up, take short steps until we can take longer ones. Our final vision for our business is much more than a bike shop (we don't intend to specialize, either; if it has an engine and isn't a passenger car or truck, we'll work on it for you). We intend (eventually!) to locate a large piece of commercial property and build and actual motocross track on it. Perhaps a foam pit. We've even kicked around the notion of putting in a paintball course if we have enough land. We want to make it a DESTINATION, rather than just a place to get parts or have your bike worked on. Naturally this will require all sorts of liability insurance and waivers and such.

Here's the neat part: a fourth friend of ours is a lawyer and is more than willing to help us navigate the legal waters we're getting into, at every step. We are doing everything we can to cover our bases and go about this intelligently and realistically.

Tina, you'd mentioned insurance. I will definitely look into partnership ins when the time comes. When our son was born I insisted on life insurance, so at least our family would be privately taken care of. We have $500,000 worth of coverage already on ourselves - MORE than enough in our part of the country to take care of anything needed, even after Uncle Sam takes his cut. We are currently looking into alternate sources of startup capital besides loans, although we'll probably need those, too. Our friend has offered his home, which he owns free and clear, as collateral should we need said loans. He has no children or wife and refuses to let us risk ours. Which I'm willing to let him do! But as I understand it we have some options before taking out bank loans. And that's all in the future, anyway, so we have time to research. You'll probably see me on those boards, asking questions.

You'd also mentioned how businesses can be seasonal. Don't I know it! The place I work for now is located next to a major lake and is VERY seasonal. A bike shop will be, too, without doubt. We intend to sock away cash for the lean months, and spend that time acquiring and customizing bikes and ATVs for resale. My husband is skilled in paint and body work, so we hope to push that during the winter. We think it's a great time, since it's too cold to ride anyway; people will use those months to improve their rides. We'll also have clothing and accessories, and I've been thinking of ways to bring in winter business. Winter is also a good time to attend trade shows and events where networking would benefit us. Overhead should be low, since we won't have employees outside ourselves and in winter we won't carry a lot of back stock. The place I currently work is a small, privately-owned business and my boss pretty much relies on me to do everything. I order stock, I handle AP and AR, I balance the books daily and monthly - I couldn't have asked for better practical experience in behind the scenes business management.

We will get our LLC when the time is right and have chosen a company name. Our lawyer pal will help us draw up the necessary partnership paperwork and help us get our proverbial act together. Once things start moving in the direction of actually getting a location, we will set down the rules in stone and get our ducks in a row.

We're going to do it. There's no doubt. At this point, I'm almost actively digging up people to tell me the bad stuff just so I don't get blindsided by something I didn't anticipate. It's just amazing to me sometimes, looking back on the last 10-15 years, how it seems so obvious that we are supposed to do this. At 19 years old I was in charge of the entire backorder dept for a large retail furniture store, and handled the accounting on weekends. Who lets a 19-yo do that?! I won't outline my entire work history, or my husband's, but the skills we've gained on the job are going to significantly help us with this venture.

Boy am I glad to have found this site!
Thanks again!

I always like to read/hear about those venturing into self employment and I think it's great.

I'm not sure what specifically it is that your new business will be selling or offering, but I can tell you that I live in Myrtle Beach, SC and we have three annual bike rallies and the revenue from bike and bike related vendors is phenomenal! These events draw hundreds of thousands of bike enthusiasts and although I have never been around bikes, I can tell you that there is a market out there for bike related businesses. So best of luck to you and your business team.

It depends on if you are willing to risk your savings, your friendship with the third party and possibly your marriage. I am not trying to be negative just honest. Its a big challenge and you have to be prepared for the endless disagreements and arguments why you attempt to succeed. If you are lucky you will marriage in tact.

Thanks

Joanna Swank
Marketing Consultant
Marketable Concepts
info@jswank.com

I'm a bit late in replying to this but it may be more pertinent now.

Most of what I would have said others have said. I'm in a 21 yr old partnership that works well but it didn't happen by accident, and it has had its bumps along the way, but it has evolved into something that now works well. A partnership is always easy when things are going well. However, went you hit a financial bump, or the economy takes a dive...will it survive when you have very little if any cash and it's time for the partners paychecks...who's going to get what? Will you divvy up the cash based on need, worth, or just spit it. Will your partner feel shortchanged because he's (his family) is only getting a third while yours is getting two thirds?

The only other thing that I see that I don't think has been mentioned is the certifications. If these are that important or required by law, your partner will be in a position to hold you hostage at some point in time.

If you've waited a year so far, you might want to wait a bit more. At present the economy is headed south, credit markets are frozen (to me a good thing) and people are likely to be cutting way back on spending on their toys. Recreational dollars are going to take a back seat to just keeping the rent paid and food on the table. The motorcycle can sit in the garage not running.

If you do go ahead anyway, be sure to start without debt...borrowing (if you even can) to finance your start-up will only make things more difficult.
Good luck

Denny