Advice for buying a business with a friend.

[BLK85]

I havent been around much, but I view on occasion. I have been busy working mostly(for someone unfortunately).

I have recently learned about an opportunity to buy a small fairly unknown type of business(except in the "industry" it will be in). I will be buying it with a friend(if everything works out right). We will need to buy a Franchise which mostly just consists of buying the companies product. It is a very new type of product, well not really new its the same as an older product but its been awhile since the previous product was around. I use it so I believe in it.

Basically I want to know what would be the best way legally to get this done? Where is the best place to get a loan for the amount? I really cant afford to buy it outright unless I empty my savings, which I wont do. I am going to my bank tomorrow to get some idea of how to do this.

Also any other advice on how to work this would be GREAT. I am really new to this. I look at it since its such a small amount of money and will probably be making money in a year it will be a learning experience to learn how to run a business.

Thanks,

BLK85

 

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[bflbob]

You might want to keep an eye on this thread, since it has some similarities...

http://www.thefastlanetomillions.com/real-estate-residential/18777-first-development.html

 

[msa1]

Be careful Be careful Be careful.

I screwed this up about 6 years ago when I started out.

We were friends for about ten years, the partnership fell apart in two.

My mistakes? It was a casual partnership and responsibilities were not clearly defined.

You can make this work but you must define each others responsibilities and stick to this without fail.

If you dont one of you may end up doing the majority of the work while splitting the profits equally.

Good luck and let us know what happens.

 

[MattThomas]

I'm concerned about the business you are looking to get in...the first iteration of the product you are selling hasn't been sold in awhile, why? The product can be great but is there any demand for it?

As far as financing, I'm not sure what banks are lending for startups at the moment...some do start-up financing, so you should look for banks that do this. From what I remember hearing a long time ago is that if you can't get a loan (for either startup or otherwise) from the bank, the bank will try to get you a loan through the SBA.

As for going into a business with a friend, just make sure you trust the friendship and both of your maturities to handle any business or partnership difficulties that you may face. If you feel that a breakup would ruin your friendship, don't do it.

 

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[GLC65]

I will only partner up with a friend if it is a buy it, fix it, and flip it. Long term partnerships never worked out for me. Its great in the beginning but conflicts will eventually happen. Have everything in writing, and assume there will be an exit. What will be the exit strategy? Who will get what and how is it going to happen? Maybe having a goal of owning two franchises and splitting where each partner walks out with one after three years might be one solution.

 

[Bilgefisher]

Be careful Be careful Be careful.

I screwed this up about 6 years ago when I started out.

We were friends for about ten years, the partnership fell apart in two.

My mistakes? It was a casual partnership and responsibilities were not clearly defined.

You can make this work but you must define each others responsibilities and stick to this without fail.

If you dont one of you may end up doing the majority of the work while splitting the profits equally.

Good luck and let us know what happens.

This is exactly how things can go if not careful. Great insight. I went into business with a friend. Our first rule, if it hurt the friendship we would back away. rep +

 

[BLK85]

I'm concerned about the business you are looking to get in...the first iteration of the product you are selling hasn't been sold in awhile, why? The product can be great but is there any demand for it?

I am a huge car guy so I use a lot of car analogies. Its kind of like Chevy selling the Corvette name to Porsche. A specialized product from a company that makes non-specialized products selling to a brand that makes more specialized products. This product is just about half the price of its main competitor and just as good.

I am concerned with how the economy is right now though since a specialized product usually doesnt sell as good in times like this. Maybe it will take 2 years to get my initial investment back, but still not that bad.

Thanks for all the help everyone.

Off Topic: I just noticed Im at Level 13 Pontiac. One of my cars is a Pontiac(Firebird Formula). Kind of ironic, haha.

 

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[MJ DeMarco]

Here's a great thread about Partners

http://www.thefastlanetomillions.co...on/3299-business-partners-who-needs-them.html

 

[TaxGuy]

One of my cars is a Pontiac(Firebird Formula). Kind of ironic, haha.

Ahh my first 2 cars were Formulas(93 t-tops then 95 conv't) :smxB:

As far as partnering with a friend, it's a sticky situation b/c a true friendship comes before ANYTHING and running a successful business will test even the best of friends, which is interesting b/c before my best friend passed away I was seriously considering running a business with him and I also was in talks with a few other close friends about running a franchise which of course looking back was the best decision that we didn't go through as it would've been one of those "too many cooks spoil the broth" situation.