Do I have a bad business partner?

[bke2006]

Hi

Can anyone offer any advice. I started out in business over a year ago now, after I was given an opportunity to take on a contract with a company I was an employee of a few years ago. At the time of the offer, it was suggested (by the company offering the contract) I get a partner. This seemed a good idea, as it would take a lot of pressure and work away from myself. Also, I could not afford to start the business financially by myself. So I entered into a partnership with a friend who I have known for many years.

So we fulfilled the contract (after 6 months), the client was very happy with us and gave us more work. The rest of that year also went well. As we did very good in our first year, our accountant suggested we should form a limited company. So we formed a limited company, which was now about 2 months ago. We have no premises, the company is registered at my partners home address. He has the title of secretary/director. I have the title of director.

Right from the start, I have had the responsibility of doing the books and pretty much everything financial. Invoicing, quoting, VAT, record keeping etc.. is all done by myself. This was agreed because I am more clued up on these matters, and also much more computer literate than my business partner.

We both share the 'on the tools' work load. 50/50. But the 'in office' side of things is mostly performed by myself. As we work during the day, the 'in office' work has to be done in the evenings or at weekends. When my partner is required to do any paperwork matters, it takes ages. I can only assume that he can not be bothered to perform these tasks in what he sees as 'his own time'. Basically I take on much more of the work load than he does.

Also I get a feeling that he does not have the same vision of the future as I do. I really want to push the business and spend money on marketing to hopefully get work from alternative clients (work with our current and only client is running out). I have suggested this many times now, but the idea just seems to land on deaf ears. I want to reinvest 50% of the profits back into the company. This still gives us a decent salary and dividend payout. But my partner wants to take, I quote "as much as we can" out of the company in dividends, leaving in running costs only.

We do not have any formal agreements in place at the moment, could this help solve the issues? I feel I am just wasting my time with him and at this rate we will have no work within the next few months. How do I politely give him a kick up the behind?

Any advice would be greatly appreciated.

[fisicx]

Ah, the the old friend as partner problem.

1. A partnership has no legal standing. As soon as you say 'it's over' then the partnership is dissolved. Close the bank account and start again.

2. You have to decide if the friendship or the business is more important. If they aren't pulling their weight then it's only you that is suffering so it might be best to pull the plug and operate as a sole trader utilising contrtactors as necessary.

3. You can only be a director if it's a limited company. You could call yourself the lord-high-his-excellence-the-commander-in-chief if you wanted.

[bke2006]

No we are now limited. We were a partnership, last year. But as of this year we own 50% each in a limited company. The problems have only really begun this year.

[Harold99]

Hi,

Its not so much you have a bad partner, but you both have different visions of what you both want out of it, as you indeed mentioned yourself. I had a similar experience a few years ago, where my partner was quite happy to work 9 hours a day 5 days a week and spend his share of profit in the pub. But I wanted to invest and grow the business.

There is a saying "If you want to lose your best friends - go on holiday with em" or something like that. You can apply the same principle to a friend you go in to business with..

If you want to try and avoid losing a friend, I would try motivational tactics first. Does he have any passions, aspirations or dreams which the current earnings cannot fullfill ? like sports cars. race horses, the 5 acre country house, Holiday cottage or Monaco pad or any other.

If he does, I would share in his dream, with regular reminders of what might be and how you both can acheive...If he doesn't your left with no alternative, a person without passions, dreams or aspirations in business is a dead duck and best dropped at the earliest opportunity.

Good luck
Harold