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General Business Discussions A place to talk about general business discussions.

Business with a partner


General Business Discussions

A place to talk about general business discussions.
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  #1  
Old 05-14-2011, 10:08 AM
Robc Robc is offline
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Default Business with a partner

Does anyone run their business with a partner?
I used to run mine by myself and used to do pretty good just didnt have any time to do anything most of the season except business related things.
Me and my friend are now doing it as partners.
Its spilt like this - He does administrative work and I do the field work with the 2 employees or whatever you want to call it because thats what I enjoy doing and he likes doing the other half.
We have 2 guys working for us this year.
We are trying to open up to the landscape construction side as well. Mostly we do all maitnenance now.
My question is if there is someone that has a maintenance business with a partner is it profitable enough for 2 "owners" to be splitting?
It doesnt seem like it to me for all the stress that comes with it.
Constantly when Im mowing or doing jobs Im calculating in my head how much we are making versus how much we are spending. When we put out bids together we usually use $60/hr as a standard for coming up with a total for labor costs. It seems like that would have to go up about 20-30%. The main reason we joined was to expand and free up time for our selves. Im not so sure about it now.
What do you guys think? Any comments on successfully having a biz partner?
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  #2  
Old 05-14-2011, 02:26 PM
bruces bruces is offline
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partnerships almost always end up with an unfair split in the workload .Is your set-up a 50-50 split ?
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Old 05-15-2011, 01:41 AM
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the split is like this - I do scheduling, the actual work with 2 employees everyday, advertising ( which is not much at all because we are pretty busy ), and maintenance on the equipment . Maybe a few other small things thats the majority tho.
what he does is all paperwork related -billing,bids,customer calling and service, tax and payroll etc. things related to that side of the biz
so i do more of the labor which i enjoy and doesnt bother me and he does more office type work most of the time. He probably works less actual hours than me.

Can you give me a brief example maybe of how a typical split works? and how a split of bascially 5 ways works -the 2 owners, 2 employees, and the business. money needs to go to each area.

Its not really the labor split that im worried about. What im constantly figuring is profits. Because thats why we work. For the profits cuz thats what provides money for the things we want to do. The way i think about is like this if we are figuring bids off of $60 an hour then you have to divide it like this - $20/hr for 2 employees at $10/hr, roughly $10/hr should go to the business and the rest to the 2 owners. $15.hr each? That doesnt make sense tho cuz I could go work for some one else making more than that or the same with a significant amount of stress taken away.
So I might be off of what im thinking here. How do you figure bids or whatever so that what the 2 owners make goes up without over bidding to compensate?
I hope this makes sense. Its really frustrating to me when i used to do it myself and was bringing in good money every month. but im trying to get some time back.
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Old 05-15-2011, 12:32 PM
bruces bruces is offline
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your rate should be per man hour .Say your helpers and yourself are going to a large enough property it will take 1 full hour to service ,so as you are doing it now,you would charge $60.00 if I am fully understanding it .Anyways,you actually have 3 hours invested in the property ,an hour by yourself ,and another hour for each of your two helpers .Your charge should be $180.00 for that property .You might have yourself billed out at $60.00 per hour [lets call it a foremans wage] ,and maybe your helpers are not worth as much as you in terms of jobs they can handle unsupervised,speed accuracy etc.,so they might be charged out at only $40.00 per hour each ,which would put your crews charge rate at $140.00 per hour .
A split can be done in many ways ,but typically ,after expenses [employees equipment,rent,taxes,whatever else ] the remaining cash would be split between the two owners and the business however you decide .Depending on what each owner is bringing to the table [skills,money,time,] the % split would need to be worked out ,but from the extremely limited info you have given us it appears to me that your doing the lions share of the work ,so maybe a split of 60% for you, and 40% for him is in order but that has to be worked out between you two .It isnt easy to figure out ,but having reasonable expectations from each party involved will help .Since it appears you already had this business operating before you found a partner ,you have a reasonable expectation of getting some extra bonus because you provided a working business to begin with,presumably with some equipment and contracts along with a good name as well .Everything has value in this situation .
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Old 05-16-2011, 12:16 AM
Robc Robc is offline
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you pretty much answered my question all the way around. but it leads me to a couple more.
its kind of a long story how we became partners. I had my own biz going but then I had to leave for a couple years and left it with him, where he kept it going. He got divorced and kind of let everything go except for a couple accounts. Then I came back and now we doing it together.
Anyways I would think there isnt to many places that are going to be paying around 140 for you to be at their property for an hour. Just using that as the same example. We are licensed and insured but After doing mostly residentials for years it just seems way out there. But is that just the standard?
If it costs the same to operate at a homeowners property as it does at a commercial property why is a commercial property cost so much more?
Maybe im missing something here? The couple HOAs we do they told us what the previous guy was doing it for (showed us the old contract) and it was significantly higher than what we charge now. but we didnt low ball it.
Also i told him that the hourly rate that we figure totals for bids off of, should go up from $60/hr since there is 2 employees now. The fast answer to that was with 2 guys working with us now we get that much more work done in every hour we are working. so if it used to take a hour with one person then it only takes 30 min or less with 3 so there is no reason to have a higher hourly figure. I dont think this is right. what do you think?
something needs to change though soon because it doesnt seem like we are making as much as we could or should be.

I guess i kind of went in 2 different directions here.

Last edited by Robc; 05-16-2011 at 12:19 AM.
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Old 05-16-2011, 10:18 AM
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I believe that Steve has posted that the national average rate is $45.00 per hour for lawncare ,if thats not the actual # ,then I bet its pretty close .Are you telling the customer your $60.00 per hour ,or are you just figuring that rate out on your own then giving your customer a final quote ? I dont tell the customer that his lawn is a one hour job ,I just give him a final price .This allows me the freedom to show up with a crew of guys and be done in five minutes without explaining to him that it still took an hour,it was just spread out between 5 guys .
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Old 05-17-2011, 12:09 AM
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Quote:
Originally Posted by bruces View Post
I believe that Steve has posted that the national average rate is $45.00 per hour for lawncare ,if thats not the actual # ,then I bet its pretty close .Are you telling the customer your $60.00 per hour ,or are you just figuring that rate out on your own then giving your customer a final quote ? I dont tell the customer that his lawn is a one hour job ,I just give him a final price .This allows me the freedom to show up with a crew of guys and be done in five minutes without explaining to him that it still took an hour,it was just spread out between 5 guys .
The only time I work by the hour is when im operating the field mower by myself. other than that its always a total figure based off a $60/hr rate.X amount of estimated hours times our $60/hr rate = the final price of the bid.
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