Help!!! Partner or not to partner?

Discussion in 'Growing and Managing a Business' started by ida, Mar 29, 2016.

  1. ida

    ida
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    Hi, I am going to start a business with one of my friend. We both are from same country. He is now in USA in tourist visa and I reside in USA for several years now.
    So here is the deal. He already have a established business in his county. He has got one partner back home. He now wants to set up some clients in USA and and outsource business in his country. In USA he cannot establish a business without the help of US person. So he's taking my help. He wants me to involve, register a name for him, do all the communications and marketing in USA. All the work in USA is done by me. His English is kind of okay. He wants me to act as an agency for his business. But he doesn't want to me involve in the business back home. He said I don't need to invest in there. The profit will be shared 50% in USA and 50% in back home country. In his case he said he's 50% partner with me and he's 50% partner back home too. So whatever profit we make 50% is his and rest 50% is divided among his partner back home and me - 25% each. This kind of profit sharing is not giving me motivation to work or do business. It feels like I don't own anything. There's no name or fame. I'm just an agency. What should I do? Please help.
     
  2. CorporateViking

    CorporateViking
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    Hi Ida,

    After you posted your question I've been thinking about it.

    When trying to decide on doing a business you have to look at your exit plan unless you are liking the idea of doing the same thing for the next 20 years without any payoff in the end. Your exit plan with a company can be to be bought out or to retire or any number of other solutions but when you're running the business you need to know the answer to at LEAST the following questions.

    1. At what point do I walk away from this project?
    2. How much do I have the opportunity to make if it's successful?
    3. What risks do I have to mitigate in order for that to happen?
    4. What actions do I need to take on a daily, monthly, and yearly basis in order to reach my Walk Away Plan.
    5. What resources do I have to invest?
    6. Is it worth it to do this?

    When looking at a partner
    1. What are they providing that I need to continue?
    2. What am I providing to them that they need to continue?
    3. Do they have a morally upright character that's not going to leave me dealing with their legal problems?
    4. What is their home life like?
    5. What do I respect about them?

    Getting a new Partner is like getting married to both them and everyone else in their life. If you hate their significant other, it will impact the business. If their Grandmother is both a serial killer and outspoken racist, don't assume for a moment that it won't drastically effect your life. Their debts become your problem, not just financial but also their social debts.

    Setting up legal entities across the borders have their own share of other problems depending on legislation. Depending on the risk you're willing to take via the immediate and long term rewards, it might be a great idea.

    A word to the wise, the scariest thing you said in your entire message was that the person is a friend of yours. Friends make the worst business partners. The number of reasons is endless. It might begin somewhere around the concept of emotional bleed between settings and situations and devolve into what happens when you have opposing needs. Of hundreds of businesses over a decade, I've never once known two friends, that is two people who were friends before going into business together, to stay friends in business together. Some shattered their relationships, others became Acquaintances who worked together, others stopped business and stayed friends. That's your pragmatic Public Service Announcement. Hundreds of businesses, not one.
     
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  3. Rosy Queen

    Rosy Queen
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    I can't help but be concerned about what you said. I'm also starting out a business with friends (not just one but THREE!). Considering what I've read, it makes it a lot scarier for me. I hope everything goes well, if not, we might have to stop a business that we haven't even started yet. :confused:

    Hi Ida,
    I don't have much experience in doing business; however, your post worries me. If you're having second thoughts, you might want to talk things out with your friend. If he/she is considering you to become a business partner, transparency is really important or you might as well invest your time and money in another form of investment that's more rewarding and somewhere you know where your money's going and at what pace it is growing.
     
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  4. CorporateViking

    CorporateViking
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    Transparency and clarity communication are going to be essential.
    Roles. responsibility, and accountability come in an immediate second.

    Just remember, it's like your marrying them, all of their drama, and their significant others. That's not a bad thing having Three, especially not if you treat it like a board.
     

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