thinking about merging with another co.

[Rich]

Hey,
I am fairley new at this. I have been in the tree care industry for about ten years. I now own my own tree care co. A good friend of mine owns his own tree care co as well we both started about the same time. ( about a year ago). I have reached a cross roads of sorts. My collegue wants to merge, I trust him and have known him for along time. There is pros and cons to this descision. I am bringing more to the board than he is. I have a truck, chipper, I have worked hard to network with mowers this winter for more business. I have done alot of free work for and organization that has given me lots of free publicity for trade and it has paid off. I have also taken out two yellow pages add.
My gut is that I should not, but it would be nice to have someone that I can trust and that I would not have hire an employees.
I am wanting any and all advice
Thanks Rich

 

[treeman82]

Rich- Speaking from personal experience, in a situation much like your own. I would advise that you not get into a partnership with this guy. Maybe write something up about partnering up on jobs once in a while, who will be paid what percentage or whatever. If you are worried about having somebody to trust for if you get sick, or if you go away on vacation, like I said have something in writing saying percentages for jobs that you team up on. Have the guy fill in for you when you need to, be nice nice with him. However! do not form a partnership with him. If your gut is telling you not to, then trust your gut. As far as the whole employee thing goes, hire somebody on, its a lot cheaper than having to get a partner involved. An employee, you pay for the time that they work. A partner you pay a percentage for any time either of you works, or doesn't work. IF you do decide to take him on as a partner though, have everything in writing about what both people bring to the table, client names, equipment, advertising, you name it. Then you may want to think about having him give you some money because of all the $$$ you have shelled out over the years.

 

[Toddppm]

Follow your instincts , DONT DO IT!
It's not worth it.

 

[Stephen Wiley]

Partnership

Rich,

The fact that you claim to be "new" at business, is all the more reason you should carefully consider any decision concerning your business.

I have seen successful partnerships, however they are the exception not the norm.

If you have 'verbally' spoken to your friend in favor, and are now feeling you have done yourself wrong. It is not to late to correct the situation.

Recognize, this decision as you would in removing a hazardous tree. Attack the problem and not the person or persons.

Do you have professional guidance for your business? Lawyer? Business Consultant? Accountant?

The key success to any good business can be described as having four legs to a chair.

1. Business Plan - this is where you could identify the positives and the negatives of growth potential.

2. Attorney - is recommended you choose to have other partners, and required if you consider, corporation status, limted liability (if recognized in your state).

3. Accountant - can advise you of financial advantages in the set up of your business.

4. Key People - besides yourself, needed to fulfill your company growth.

By pursuing this decision with the professionals mentioned above. You will take the attention off yourself and your potential partner, to a more informed business decision.

Which by doing so may end up in advisement by someone other than you, thereby preserving the friendship of this potential partner.

Other option is he may be willing to invest in corp status. Corporation shares are based upon monetary, asset value placed into business. Since you already have more to offer, it would stand to reason that you would control the majority of company shares and a higher office.

If your not familar with advantages/disadvantages of corporations vs. partnerships vs. proprietership
consider a business consultant.

NOTE: Usually, bringing on a partner does not prevent the need to hire more employees. You both need to generate the same if not more work. Administrative costs of partnerships can increase thus taking one of you away to tend to the other side of business.

 

[geofore]

Partnership

Give some consideration to a Sub S Corporation over the partnership. Get it in writing as to who does what when and where and why. If your gut feeling tells you No, walk away and read up on Sub S.

 

[John Paul Sanborn]

I like the cooperative working method better, sell it to your buddy as living together before getting married.

Once you have the leagaly binding relationship you could get screwed.

What benifits do you get from having a partner, sounds like insurance premiums would stay the same, book keeping would change and you would have two bosses in the company.

To have good efficient operations you will need employees or some other form of help, otherwise you will be the one who is doing all the work. If you sell, prune, cleanup, maintain gear you will allways be running around nit getting everything done.

 

[rborist1]

:Eye:

 

[sonny]

my oppinion, & just my oppinion. Its like hireing family.Its a no no.sell out maybe but you have earned what you have.(you).

 

[NeTree]

I'd have to say NO as well. Too much legal crap that goes with it, and you've obviously worked hard to get what you have.

I prefer more informal relationships. I have tree guys that send jobs my way, some I send their way, sometimes they hire me for a day, sometimes I hire them for a day, and sometimes we have both sets of crews working oine big job. It's alot sim,pler, and it works. This is only a cutthroat business if people make it that way. I think that it elevates peoples' opinion of the industry when two companies co-operate on one job- it shows professionalism as opposed to backstabbing.