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Non-Working out-of-state partner
solitaryPetrel
subscriber Posts: 1 Member
Thank you for taking time to read this. I am looking for some guidance here.
I am planning to buy a business (in my town) with someone who does not live in my state. This business belongs to his distant relatives. I will be the working partner in this business and he will contribute as he can. He cannot move to my state or even come here regularly.
I need some guidance to define this partnership. What is the most suitable way to approach and handle this. This person is my very good friend and I want to be sensitive to his feelings too.
Right now we have discussed at high level to do 50-50% ownership and I draw salary as a working partner.
This business will be my sole and only source of income. While my out of state partner will have another 9-5 type job. So, from risk point of view, I am all-in with this business but he will continue to build a career with other companies while owning this business. In worst case scenario, if this business fails, then I am left with nothing.. but he will still have an established career.
What do you suggest is fair model of partnership here?
I am planning to buy a business (in my town) with someone who does not live in my state. This business belongs to his distant relatives. I will be the working partner in this business and he will contribute as he can. He cannot move to my state or even come here regularly.
I need some guidance to define this partnership. What is the most suitable way to approach and handle this. This person is my very good friend and I want to be sensitive to his feelings too.
Right now we have discussed at high level to do 50-50% ownership and I draw salary as a working partner.
This business will be my sole and only source of income. While my out of state partner will have another 9-5 type job. So, from risk point of view, I am all-in with this business but he will continue to build a career with other companies while owning this business. In worst case scenario, if this business fails, then I am left with nothing.. but he will still have an established career.
What do you suggest is fair model of partnership here?
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Comments
However, if you are putting more money, more time, more effort, etc., you may want to approach him about why you don't feel a 50-50 split is fair to you. But you must do that strategically, and have data and facts to back up your claims.
This is an old article form StartupNation, but the content is evergreen. It has nine tips on starting business partnerships, and touches on those with personal relationships as well: https://goo.gl/OnMvNI
Community Manager
StartupNation, LLC