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Old 07-12-2009, 11:27 AM   #1
szw
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small business - becoming a partner question

Hi, I'm new to this forum and would like some advice. A small bit of background for you: For the last year I've been working as an "engineer". I'm only a couple years out of school and realize that I hate working in an office or in front of a computer all day (even though I like being in front of a computer all day on my days off). My job is a contract that ends in November.

Since April I started working part time doing a delivery job on the weekends for a small takeout/del restaurant. Its only like 10-14 hours a week but I help out with other things around the restaurant quite a bit. The owner is looking to open a new location and asked me if I would be interested in managing the new one. Its a fairly simple operation but he still needs someone at that location to do the hiring and keep books and everything else.

Now I would be very excited to take this offer because I love restaurants, however I do not simply want to be a hired staff that is fairly easily replaceable. My first thought would be to offer to become a partner in the restaurant as well as take on the general manager role. To me, this means I'd be more secure as well as have a real incentive to grow the business. But, I'd still like to be paid for the general manager duties. I don't have to be a 50/50 partner, I would not mind taking a smaller share for now and don't mind leaving the ultimate decision up to the old owner.

Now my question to those of you that are familiar with how small businesses operate, is my suggestion reasonable and have you seen setups like this? If so, would the manager (and partner) be on a salary or an hourly pay?

Any other suggestions? What would be the best way to pitch this offer? And if he is not interested at all in letting me have a piece of the business, what are some counter offers I can make to take the job while still having some security and long term goals in mind?

Thanks for your help
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Old 07-23-2009, 12:12 PM   #2
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Re: small business - becoming a partner question

Interesting opportunity.

You need to be smart and careful about taking advantage of what could be a life changing new adventure.

Remember a few things to guide you along the way...

People don't own businesses to make other people rich. Successful business people find talent ( you) and hire them....BUT.. sometimes you find a person who is interested in helping others develop, and look to manage talent and help a young person they like get started.

If that is the situation, then this opportunity may work...

My advice would be to have an EXPLICIT agreement...no, not naked pics of girls, but a spelled out contract. Do not accept a handshake or promises.

Implicit, handshake agreements can hurt you. The business may do very well under your guidance, and all of a sudden, your "Partner" does not want to share.

One of the keys to a partnership is financial exposure. Will you be putting up some money?

If you have no money, but want to have a share of the new business...
Your partner can give you a loan.

You can develop a schedule where your share is earned based on performance.. like, if you meet certain goals, you get 2% of the business, with a 10 year agreement, with a sliding scale... like 2%, 3%, 5%, 10%, 20% for consecutive years of performance.

You can borrow money from your family.

You can negotiate part ownership as compensation. Like, pay me $5,000.00 a month, but $4,000 in cash, $1,000 goes toward a percentage of ownership.

If you do become a partner, know going into the arrangement what happens if you dissolve the partnership... how is the business valued? What events allow you to bail or force the other guy to bail? Can you buy him out?

Thats all I can spew right now off the top of my head.

Remember, your mileage may vary. Good luck.
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Old 07-23-2009, 12:50 PM   #3
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Re: small business - becoming a partner question

it's not trivial to just give up a share of a business...why would he do this? he needs a manager, not a partner, for this new location

it seems u did well to be promoted from delivery boy to manager, though

u aren't bringing any money to the table for this partnership, right?

why would he bring you on as a partner when he could find someone much more experienced with owning/managing restaurants and who could possibly bring money to the table to be his partner?

he may be wanting you to manage because you seem bright and because you would work for less than hiring someone with experience managing a restaurant...ie he's trying to save money for the new location...
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