Partnering with someone

Discussion in 'Growing and Managing a Business' started by daytrader, Feb 1, 2012.

  1. daytrader

    daytrader
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    I have the forum set up and already has members on it posting but I'd like to partner with someone that i think can also help. How should be go about monetizing it?
    should be have 50/50 for the revenue?

    can you suggest just what do we do from here?
     
  2. StarBC

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    If you doing 80% of the work and your partner is doing only 20% it's unfair to share your profits 50/50. Consider the percentage of your investments (work, money etc) and your partner's and if you both have equal liability.
     
  3. sigma

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    I agree with StarBC. It all depends on the work load or the difficulty of the work the people are handling.
     
  4. Shahrier

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    Well, if you are partners, it basically means 50/50.. If you don't give them 50% share in your site, it's more of you being the boss.

    It depends on what this person is coming in to the partnership with (such as services, money, software, etc.) and what he is capable of doing with the site.
     
  5. sallya121

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    It is better you sign the contract with works that you both will do .It is more clear and helpful.
     
  6. AshleyWhiteBusin

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    Hi! How about just hire a freelancer to be a moderator. You do not have to pay the 50%. Just standard rate.
     
  7. Mark T

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    Hmm. About monetizing it, well, other than the PARTNERSHIP idea, why don't you try to create a separate place in your forum where people can bid or buy for products that is offered by other members as well. Of course, you would be hiring someone who knows that part of marketing to help you out on your plan and make sure you create a reliable and credible marketplace online.

    The way you can earn? Simply by probably adding some percentage of maybe 10% or whatsoever is accepted in every item/s sold in your forum or through your forum.
     
  8. JPStonestreet

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    Be very careful. A partnership is like a marriage. You'll spend more time with your partner than you'll spend with your family so you need to know them very well before making a decision. Be sure you have similar goals for the business, a similar work ethic and complimentary skill sets. If what you really need is a sales person or an advertising person, adding another developer won't help much. I'd recommend a trial period to make sure everything is going to work, unless you already know them very well and trust them without question.

    The next thing you need is a partnership agreement. Define everything, and I mean everything, that might be an issue now or in the future if your business takes off. What are the individual roles and responsibilities? How much will each of you get paid and how are raises decided? How much vacation time will be allotted per year and is it paid vacation? What happens if one of you gets pregnant or your wife has a child? Do you get time off with or without pay? Who will do the work when one of you is away? Will you get key-man insurance to pay a salary if one of you gets hit by a bus? How will you handle the profits? Will you reinvest them or pay them out in bonuses or a combination of both? Discussing these issues upfront could save your partnership down the road.

    As far as deciding how much percentage to give a partner, if your business isn't generating revenue yet, you can go 50/50. However, if you've invested a significant amount of your own time and money, you may want to add all that up and ask your potential partner to bring that to the table or otherwise reduce their percentage.

    You can calculate the value of your time by estimating the number of hours you've worked to date, and multiply that by the amount you would have paid a contractor to do it for you. If you've spent your own money to launch the site or paid for development, that's your basis in the company and your partner will need to bring an equal amount if they want an equal partnership. That doesn't mean you can take their money and spend it on a new jet ski. Their money will go into the business account for use on business expenses such as advertising or new features.

    The best partnerships evolve over time and develop out of a mutual respect for each other, and each person brings complimentary skill sets. Most partnerships don't work very well and often end up destroying the business. Make sure you really need them and they'll add value before you agree to anything.

    As for monetizing your site, that depends on how much traffic you have. It takes traffic to earn money from ads. You can charge people to post classifieds in your forum, but that also requires traffic. If only a small number of people are looking at the ads, you'll have a hard time selling ad space for enough to make it worth while. You could also try selling something related to the topic of your forum or allow members to post things for sale for a percentage of the transaction. In my experience, it's hard to generate revenue from a content only site unless you have a lot of traffic. You might want to focus your efforts on increasing your user base for a while and come back to this question later. By then, the answer may be obvious.

    Hope this helps. Good luck!
     
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  9. BusinessStories

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    I agree with JPstonestreet. A partnership is like a marriage. Finding a good partner is invaluable, but also extremely difficult. If you aren't ready to commit long term I'd recommend finding someone to do freelance moderation on the site rather than adding a partner
     
  10. daytrader

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    All of a sudden it becomes too serious, I never though getting into partnership has lots of factors to consider. I'm afraid I'm gonna be offending him.
    Thanks for the advice.
     
  11. ArcSine

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    AshleyWhiteBusin touches on a point which is frequently a helpful way to analyze a situation such as yours, Ownedbox. If your particular scenario permits, start by deciding how much you'd have to pay someone, on a straight salary basis, to handle the workload you'd need from your potential partner candidate.

    Then ask yourself if this partner would be able to bring enough additional value to the table, as a partner, to justify your giving up some X% of the revenues (or bottom line, or whatever), instead of simply paying someone the straight salary for the same job.

    Suppose for example you figure you could hire this work for 40K a year. You also estimate that your business will produce a bottom line net (before this other person's salary) of 100K. Then you personally can expect a profit of 60K per year, after paying the salary.

    Now you estimate that if instead of using this straight-salary individual, you partner with someone who will not only handle that same work, but would also bring attractive intangibles into the equation (such as an extensive network of valuable contacts, a proven track record of developing new business, etc.). You estimate that this partner's "intangibles" might be able to increase the bottom line from 100K up to 170K or so. Then if you're sharing profits 50/50 with this partner, your personal income increases from 60K (using the straight-salary person) to 85K (with the partner).

    That kind of comparison---estimating your personal income using a straight-salary employee for the work vs. having a partner---is an analysis that might help you in this decision. (Of course, if you expect the bottom line to be, say, just 10K a year, it'd be cheaper to pay someone with half the profits than with a fixed salary of 40K per year ;)).

    On a different note, if you do choose to team up with a partner, try to write a partnership agreement that anticipates in advance as many possible questions and issues which might arise down the road. For example, what rights and responsibilities does each party have in the event one partner wants to exit, or to sell his/her interest? How is the company to be valued if either one of you wants the other to buy him out? To what standards are the partners to be held with respect to minimum hours of work, performance, etc? What provisions in the event that standards aren't being met?

    These and many other questions are 100 times more difficult to resolve down the road when they arise, if they're not already dealt with by a mutually-agreed-upon resolution to the matter built into the agreement.

    Cheers, and best of luck with it!
     
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  12. JPStonestreet

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    It's not personal; it's business. If you're going to be successful, you'll sometimes need to have uncomfortable conversations. But trust me, if you don't have these discussions before you're tied to each other monetarily, you could be setting yourself up for even more uncomfortable conversations down the road.

    You need to be able to communicate openly and honestly with your business partner. If you can't do that before you're even partners, I'd suggest continuing on your own and consider outsourcing tasks if you can afford it.
     
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  13. jcworlditsme

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    Good point, although in some cases people will moderate forums on a voluntary basis.
     

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