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Small Business.

  #1  
Old 12-14-2014, 11:40 PM
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Default Small Business.

So i have a question for everyone out there. please give me your opionons. Bare in mind its going to be a LONG post.
Me and two of my best friends are starting up a business we have a name, business ideas, business goals and strategies. were all ready to hit the go buttom and see what happens...

But I am in kind of in a pinch...
The start of the company, Im putting 100% of the money into starting it. later on they said that they would help out with money..
When it comes to when we start production ill be doing about 75% labor one friend is about 25% labor and the other is helping with designs and all three of us with money... (but ill be putting more money than them... which im fine with)
and they said when we finally start to make a profit that they would like to split it all evenly between the three of us.. but is that really fair when its clear not everyone is doing the same amout of work..?

(Also if you want to compare it to a normal business there are times when people get paid the same for the same job and they each put different effort in.. i know that i used to work at a factory...)

Thanks for your feedback and time to read.(:
 
  #2  
Old 12-15-2014, 03:50 AM
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They need to owe you money, also being the highest investor, you should be making all the decisions. Including letting them go if they dont hold up to their end of the deal
 
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Old 12-16-2014, 03:20 PM
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In writing; what each member will put in, amount and percentage.
What performance each member will be expected to attain.
What each member will receive in ongoing dividends or wages.
What & how expenses will be shared.
What each member will receive upon exit, based upon investmentand corporate gain.
Did I mention in writing.
GOOD LUCK AND BLESSINGS UPON YOUR ENDEVERS.
 
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Old 12-16-2014, 04:19 PM
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My advice is don't go into business with anyone you want to keep as a friend! I've seen life long friendships destroyed beyond repair in very short times when people have tried going into business together. I give the same advice about choosing a roommate never live with someone you want to stay your friend. I'm not saying these arrangements always end in disaster but I have seen more disaster than happy relationships. If you decide to go through with it you start the business and be the sole owner and then pay them a salary for the work they perform. You would be stupid to put in all the money up front and do almost all the work but then pay them equal to what your paying yourself! Too many people thinking they are in charge isn't going to end well for anyone. Just do more research and see what your really getting into and how to properly protect yourself and then move forward but just jumping into business with a couple buddies cause it sounds fun and cool isn't a smart idea in my opinion and trust me I've thought about doing it several times but both parties realized that the friendship was more important than "getting rich"!
 
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Old 12-16-2014, 08:55 PM
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Thanks guys for all the feedback!
Very much appriecated. Yes the more I think about it im starting to think it'd be a bad idea.. mostly for the sole fact that both parties would like to recieve same cut of profit even with different labor and money input.. probaly break the friendship.
Im thinking of just doing business by myself or with my wifes help (when she has time.)

Thanks again(:
 
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Old 12-16-2014, 08:57 PM
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I think that's the smarter approach
 
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Old 12-16-2014, 09:45 PM
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I think that is smarter as well. Doing business with friends is never a good idea... friends try to bring that into play "but we are friends" that type of thing. It never works.
 
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Old 12-29-2014, 12:39 PM
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Have to agree....business with friends can be bad. I have also seen my share of friendships end due to them. With that being said, what you are talking about is called a general partnership. For any business you also need to set it up as an LLC to avoid losing any personal assets should the business get sued as the LLC can shield you. Even with that being said, there are LOTS of risks in partnerships and you need to do TONS of research. Here are some links that can help:

General Partnership

https://www.sba.gov/content/partnership

As has been stated, you need to document up front the distribution of profits or everyone gets an even share, even if you put up 100% of the money. Further, actions have to be approved by all the partners, even though you put up 100% of the money.

You're best bet if you chose to do this with friends is to do TONS of research or talk to an attorney to protect yourself.
 
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