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Need financial advice from other owners, please offer your opinion!

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  • Need financial advice from other owners, please offer your opinion!

    Hello everybody,

    I am a partner in a lawn care and home maintenance service in the Twin Cities, I own 50% of the company and my partner owns 50%. We have been in business for exactly 1 month and things have been going VERY well, but that's not what this post is about. We are longtime friends so we are able to compromise and find solutions to problems in a non confrontational way, however, there are a couple things I am having a hard time finding a solution to.

    We have equal money in the business but I handle all the clients, advertising, networking, and I find all the jobs. In 4 weeks I have 20 lawn care accounts and 32 single day jobs (cleanups, trimming, home maintenance, etc). We started with 0, needless to say my head has been spinning with the amount of work I've earned and I love it. My partner brings a huge asset to the table, his Ford F150. Without it we wouldn't be able to operate at the rate that we are and we certainly would be making near as much money. THIS IS WHERE I'D REALLY LIKE TO HEAR YOUR OPINIONS.

    *His payment for the truck is $350/month, and we put all the gas on our company debit card. But he does other driving before work hours or after work hours. I would estimate that he does 80% of his total driving with the business and 20% for personal events.

    1) Should I be splitting his truck payment down the middle with him or should I be paying a percentage of it?
    2) Should I be splitting gas straight down the middle with him, or should I be paying a percentage of it?

    Or...Should we be splitting the payment and the gas up according to how many miles we are putting on the truck during normal business hours?

    I have my own car (that I barely drive) that I am currently making payments on and paying for gas and insurance so I want to make sure we are doing this the right way.


    Any help would be much appreciated. We are paying each other Wednesday and I want to make sure it's fair for both of us since we both work are asses off and have been doing such a great job. HAS ANYBODY ELSE BEEN IN THIS SITUATION?
    5
    I would split it down the middle 50/50
    40.00%
    2
    I would split it up according to how many business miles we put on it.
    60.00%
    3

  • #2
    What do you have in the business besides sweat labor?

    If you guys are making all that $$ you should invest in a work truck.

    If I were you I would be real nice to this guy, PAY HALF! or not its up to you.

    This is why you never have a partner.

    Man could go on and on.

    Ok so I think you need a work truck that only gets used for business, Also I would have some kind of agreement with this guy. Getting jobs will do you no good without a truck. So I would advise you to suck it up for a while (pay the money) until you guys get a work truck.

    Comment


    • #3
      Hello everybody,

      I am a partner in a lawn care and home maintenance service in the Twin Cities, I own 50% of the company and my partner owns 50%. We have been in business for exactly 1 month and things have been going VERY well, but that's not what this post is about. We are longtime friends so we are able to compromise and find solutions to problems in a non confrontational way, however, there are a couple things I am having a hard time finding a solution to.

      We have equal money in the business but I handle all the clients, advertising, networking, and I find all the jobs. In 4 weeks I have 20 lawn care accounts and 32 single day jobs (cleanups, trimming, home maintenance, etc). We started with 0, needless to say my head has been spinning with the amount of work I've earned and I love it. My partner brings a huge asset to the table, his Ford F150. Without it we wouldn't be able to operate at the rate that we are and we certainly would be making near as much money. THIS IS WHERE I'D REALLY LIKE TO HEAR YOUR OPINIONS.

      *His payment for the truck is $350/month, and we put all the gas on our company debit card. But he does other driving before work hours or after work hours. I would estimate that he does 80% of his total driving with the business and 20% for personal events.

      1) Should I be splitting his truck payment down the middle with him or should I be paying a percentage of it?
      2) Should I be splitting gas straight down the middle with him, or should I be paying a percentage of it?

      Or...Should we be splitting the payment and the gas up according to how many miles we are putting on the truck during normal business hours?

      I have my own car (that I barely drive) that I am currently making payments on and paying for gas and insurance so I want to make sure we are doing this the right way.


      Any help would be much appreciated. We are paying each other Wednesday and I want to make sure it's fair for both of us since we both work are asses off and have been doing such a great job. HAS ANYBODY ELSE BEEN IN THIS SITUATION?


      as you mentioned each one bring something to the table so therefore you are bringing in the bacon and he is bringing the truck.
      your ability to bring in the work and run the business is the reason why you are working and even having this conversation of how to divide your loot.

      anyone can buy a truck but not anyone can bring in work and if your friend bought this truck specifically for the business then you split the payment and you also share the truck.
      or, you come up with some fair value for the trucks use and split it.
      either way a f-150 is way to small of a truck and will eventually get useless for you.

      more often then not partnerships end up disasters and it don't matter how good a friend the person is.
      money always comes between people and has even broken up many families.

      the best course especially if you are savvy with drumming up business is go it alone and hire everyone you need.
      the profit margin is too low in this business and competition is far too fierce to be splitting the profits 50/50.
      you work harder and suffer a little more in the beginning but in the end you get a much better reward and you call all the shots.

      Comment


      • #4
        All he does is drive?

        Comment


        • #5
          Lloyd

          No, my partner does much more than drive. He's skilled and works hard, we make a great team that's I want to go about the truck and gas the right way.

          Comment


          • #6
            ALL business expenses are take out BEFORE any 'split'. This way things like gas, repairs etc are shared.

            Comment


            • #7
              No, my partner does much more than drive. He's skilled and works hard, we make a great team that's I want to go about the truck and gas the right way.

              the gas is a no brainer, all fuel used for work get taken out of the pot.

              Comment


              • #8
                One of my friends Tyler also works with me. He has a truck that he uses for personal use but I give him what I feel is appropriate for gas for when we use it. When working with friends always agree on how much $ is to go out before the job is started. Most of the time he turns down the gas money (hard headed) but it is always good to offer it.

                As far as how to split the payment your on your own the only thing I can think of is both of you count your miles on your vehicle for business use and set a rate of x amount per mile

                Comment


                • #9
                  With all of these responses, which way are you leaning on this?
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                  Comment


                  • #10
                    Follow up

                    Thanks for the great responses everyone. After re-reading my original post I realized I did not explain our partnership and how well we work together. He brings the truck and valuable field experiwnce to the table and I just happen to be really good at customer communication and advertising. We are good friends and make a good team that's why I wanted to reach out to you guys and see what you could offer from past experience. I think the best way to handle the siuation is to count the miles from day to day work operations and split up the truck payment and gas $ according to the difference between work miles and total miles.

                    I was able to develop a good formula to easily plug in numbers that will help. We both agree that expenses come out first, put money back into the business second, and pay ourselves third.

                    Comment


                    • #11
                      Are there any immediate plans to get a work truck or would you prefer to continue this way for a while?
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                      Download your Free trial of Gopher Lawn Care Software.

                      Comment


                      • #12
                        I believe the brains of the operation needs 60%, the field worker needs 40%.

                        Comment

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