Dear Captain Awkward,
Almost a year and a half ago, while I was in tenuous material circumstances myself, my partner of less than a year got sick. One minute they were having a biopsy and the next minute they were fresh out of what turned out to be cancer surgery. Shocked, I didn’t have the presence of mind to prevent post-surgery on my couch from turning into living on my couch.
Frustrated with my overwhelming sense of powerlessness in the face of epic shitty circumstances (which also later turned out to include partner’s mental health crash-and-burn), and failing to get caretaking support from their family, my community, and whatever social safety net ostensibly exists for someone like my now-ex,I started aggressively pursuing work.
I struck a deal with my friend to help with their small online business. Working for them for the past almost year has allowed me not only to address my recent and childhood traumas in therapy, but also to enroll in a course to learn their trade.
They offered me partnership, I took it. We’ve been splitting the revenues, but have yet to finalize our partnership agreement.
So here is the deal: my prospective business partner also struggles with chronic and mental illness. Sometimes getting them to do any work even on a flexible timeframe is like pulling teeth. Right now, the money coming in is by-and-large from a combo of their old work and my current work.
I am torn.
They extended a hand to me when I desperately needed it, and they really did help give me space to heal. Having experienced mental illness and loved someone who has mental illness, I have a hard time writing them off just because they’re difficult to work with. They were so patient with me when there were some days, and some weeks, when I just couldn’t work.
On the other hand, I *did* do a lot of work. I went to therapy, I got my ex off my couch, I revived their business, and I invested in professional development education which will empower me, if I choose, to work on my own. After everything I just went through, and from where I stand now, I am seriously balking at formalizing my commitment to this person who is reliably unreliable about doing anything besides paying me.
What should I do?
So Burnt Out (She)
Dear So Burnt Out:
YOU ARE CLEARLY AWESOME AND YOU KNOW YOUR OWN VALUE. GOOD JOB DIGGING YOURSELF OUT OF A REALLY HARD SITUATION.
Also, don’t sign that thing yet. Balking at it is a healthy sign that you are taking care of yourself.
In my opinion, before you sign anything:
You need…a vacation of at least a week where you take care of nothing or no one but you.
You need…to schedule periodic breaks for yourself through the end of the year so that you can take care of yourself. Put your winter holiday plans on the calendar. Put a brief September or October getaway on the calendar. Hell, you’re the boss, so put “I don’t work on Fridays over the summer” on the calendar if that can be done reasonably. Ask your business partner to do the same thing. “Let’s schedule some breaks so that we can stay on top of the work without getting burnt out.”
You need…to explore your field and investigate where you fit in. Maybe work with a career coach or mentor (who is not your business partner). Maybe set up some informational interviews with people who do the kind of work you do. See if there is a MeetUp or professional organization related to what you do. Join them. Attend events.
This is a project of a few months where you figure out what you really want to be doing with your professional life longer-term. This is where you also remind yourself that you have options and this partnership is just one of those options. This research will help you negotiate and make decisions from a position of strength.
You need…to hammer out some things with your business partner before you make a final decision.
Unspoken agreements, unwritten rules, and assumptions are morale-killers, partnership-killers and business-killers. Creating a partnership means putting things in writing and spelling them out so that the boundaries and rewards are clear. If things are not clear between you, either in general or in the current contract, then it’s time to make them more clear.
Reminder: I am not a lawyer or expert in how business partnerships work, and this is not legal advice. You should have your own attorney look at anything you sign before you sign it. This advice is meant to help you think through what you need from any partnership to make it function well for the specific actual people in this actual situation. Maybe these are discussion questions that you work through, maybe these go into a memo that gets added to your agreement. Make sense?
- What is your business partner’s best-case scenario for how this will all work? Have they spelled out a vision for how they want the firm to operate long-term? Is this congruent with what you want?
- Is your role going to be that of managing partner, where you are responsible for setting deadlines and “getting them” to do the work on schedule? Is this structure spelled out (and rewarded)?
- What are the expectations of how many hours/week or month each partner will work? What are the expectations of quantity and quality of work output?
- What accommodations do you need in a flare-up of your respective illnesses? Can you agree that during these times there is a protocol to follow?
- What are the terms if either of you needs time off or a lighter workload for medical reasons? What is the plan should one or either of you become unable to work for a significant period of time? Is there a structure in place for one partner taking a leave of absence? What short-term and long-term disability insurance can the company put in place for both of you?
- Even when things are good, what’s the plan for each of you to take adequate time off in the course of the year, to recharge and avoid burnout? Are there times of year when it’s ok to wind the business down or take turns taking longer breaks to pursue other interests and opportunities?
- Is there a continuing education budget so that you can both keep your skills sharp?
- What are the terms for dissolving the partnership if you decide to seek another opportunity later?
How you both answer these questions doesn’t have to look like how any other business would answer these questions, as long as whatever you agree is transparent and it works for both of you. You don’t have to build your business based what theoretical non-mentally-ill people “should” do in the same situation.
Think of it this way: This person built a business that sustained themselves all this time and that was able to grow to sustain you when you needed it. They are not your couch-living-ex! That doesn’t mean you owe this person continued service or that you need to hitch your wagon to their star forever, and you definitely shouldn’t continue working there if you don’t want to. But this is in no way an automatic “Sheesh, here I am, the unwilling caretaker, AGAIN” situation. You don’t have to accept this role, and you certainly don’t have to accept it without negotiation. If you can have some honest conversations, you have a rare opportunity to build a business together that builds in accommodations for burn-out and for people with mental illness from the start.
For example, instead of having a situation like you have now, where you feel like you’re the one keeping things afloat without recognition or an end in sight or a safe way to talk about it, you could decide to have a “Hey, partner, I notice you’re having trouble meeting deadlines right now. Are you all right? Do we need to activate Article 11?” conversation, where Article 11 is:
- Ill partner takes a couple of days off, as soon as possible, to regroup and start whatever medical care is necessary.
- Other partner helps triage their work so they are doing only what they can and what is necessary for them to do, at reasonable deadlines.
- The company budgets to bring in a temporary assistant to handle admin & billing issues and to take non-essential things off the collective plate.
- After a certain time period (2-3 months?) you agree that it’s time to discuss adding an additional staff member to the company full-time or making some other accommodation.
Obviously, I am making this up out of my head as an example of what you could negotiate in my beautiful fantasy about what a business that actually intentionally accommodates people with mental illnesses could look like. Adapt whatever is useful for you.
A script for the conversation could be, “Hey, before I sign these papers, I think we need to talk more about the way we set up our business so that it works for both of us. You were so wonderfully able to accommodate me when I was dealing with [sucky life situation], and I want to be able to accommodate you the same way now that you’re dealing with [sucky life situation]. Can we hammer out a structure that will help us stay profitable and grow, maintain parity in our workloads, and make this really sustainable for us as a company and as human beings?”
See also: “Hey, I know I still haven’t signed the papers. My bandwidth for doing xyz work is being exceeded right now, and I need some help brainstorming a way to handle that before finalizing our agreement.”
Or, “You’ve been having trouble with deadlines lately, and I am feeling overwhelmed and close to burnout. I need some time off next week. Can you step in?”
You don’t have to sign the papers, ever. If your time of working with this person is done, it’s okay to decide that, and telling them is a kind thing to do so they can make good decisions about their business. “I’m so grateful for all you’ve done, but in practice a partnership arrangement isn’t working for me and I’d like to [go back to freelance at $xxxx rate][strike out on my own][stay on until I find another job][be hired as a project manager at $xxxxxx salary][help you hire someone before I start new job on (date)][wind down my projects].”
If you don’t feel like you can raise these questions with this person, factor that into your decision. (i.e. Do not partner.)
If you raise these things and the answers are vague, defensive, full of expectations that you should be grateful for all they’ve “given” you, factor that into your decision. (i.e. Do not partner.)
If you taking time off for a even a week is impossible because you can’t trust your partner to keep things on an even keel while you’re out, factor that into your decision. (i.e. …)
If you honestly feel you’d be happier and do better if you strike out on your own, factor that into your decision. (Hence…)
Partnership and collaboration involve risk, and vulnerability, for both people. Can lovely, generous, imperfect you and this lovely, generous, imperfect person risk a little more to have the conversations that would make the things you do together not just work, but sing? I can’t help wondering. That doesn’t obligate you, but I can’t help wondering.
If you’re going to build a business, build the business you want to work in. You’re going to do and be great, whatever you decide.
37 thoughts on “#967: “Am I signing up to be a business partner or reluctant caretaker?””
I just want to chime in here about the partnership business itself. By making you a partner do you now technically own the businesses assets? What about the businesses brand? It’s customer lists?
A business is more than just the labor that is being done right now. It is also the reputation, the brand and the assets that make it possible to do more work. It’s possible that your potential future partner wants you to take over the primary “doing” of the business as they start to phase out.
Now I don’t know what industry you are in, but it is worth considering what the value of owning part of an established profitable business in this industry us, versus the challenges of striking out on your own. Just something else to make sure you consider as you lay out your partnership plan and evaluate your options.
Lawyer here who does a lot of work with entrepreneurs and business co-venturers. The captain gives you a very good list of questions and considerations to keep in mind for making this decision. I’d like to highlight the advice to have a consultation on your own with a lawyer who can discuss with you the various ways to structure your business venture. In the U.S., there are tons of ways to build your legal structure around the venture, and each one of those ways has advantages and disadvantages, whether with taxes, personal liability, operating costs, the survival of the venture after someone exits, and so on. (Outside of the U.S., generally there are fewer different legal structures you can choose from; but still I hope you explore the ins and outs of the options you might have.) Definitely ask the lawyer if a straight-up partnership arrangement will be the best for you. It may not adequately reflect both parties’ value to the venture.
A couple of hours with a lawyer will pay for itself going forward. So many of my entrepreneur clients come to me with problems that they could have avoided, or at least had plan to deal with, if they’d put some paper in place at the beginning of the venture.
Another thing I hear sometimes is that people don’t want to get “too formal” or “too legalistic” and so they don’t want to involve lawyers. Or they think it may come across as insulting or friendship-destroying to bring in a lawyer. You know what really destroys friendships? When a business venture goes pear-shaped, the parties were operating from informal agreements, and a state law’s default rules (or a judge) control who gets what when it all ends.
Best of luck!
It’s probably worth it to sit down with a CPA as well. One thing I learned in my tax accounting class was that the financial consequences of different forms of businesses can be super complicated.
Seconding the lawyer thing. If you are in the US, you may already be in a legal partnershp – independent of signing any papers – and then you already would bear responsibility for debts the business owes or liabilities related to it.
Seconded both the lawyer and the CPA, as well as the excellent advice from the Captain. SPELL THINGS OUT.
If nothing else, we will avoid the “but I thought you said” and “I though we agreed” and “I don’t remember it that way” which plagues every human endeavor which does not take precautions.
And possibly the kind folks at your local Small Business Development office!
Thirding (fourthing, fifthing) the lawyer suggestion. And also, please be aware that you may already be in a partnership (with the accompanying legal rights and responsibilities) event without having formalized your agreement (depending on the details, that could be the case in my jurisdiction, for instance). In the event that you do decide you want out, make sure you get some advice on leaving as well, and have your discussions about leaving formalized in writing.
I also slightly disagree with some of the Captain’s scripts. I 100% do not think the past, when your business partner helped you in a sucky life situation, is relevant to your current business negotiations (except in terms of how you both want to address future life situations). My lawyer mind also balked at any script that may suggest or imply you are holding signing something hostage until something in your current arrangement changes. That kind of behaviour can be legally off-side.
You potentially have a really neat opportunity to negotiate how to run a business in a way that works for both of you, and negotiating a legal agreement can really help structure that discussion. Good luck!
“Obviously, I am making this up out of my head as an example of what you could negotiate in my beautiful fantasy about what a business that actually intentionally accommodates people with mental illnesses could look like”
Wouldn’t that be amazing? No stigma, no shame, just “We have cave-brain hardware trying to run 21st century software,, failures are pretty much inevitable”.
LW – best of luck.
Could someone please cross-stitch that onto a pillow for me?
I work in one, and it’s great. We haven’t yet found a way to spread workload completely equitably, though.
And this model of accommodating people with mental illness is great for people who don’t currently have one… and will help keep people from acquiring one.
Every life has ups and down, challenges, and just plain running out of steam. We need more than the overworked/fired binary that so many try to implement.
I don’t think that ‘sustainable for people with mental illness’ and ‘sustainable for everyone else’ looks all that different, because everyone can fall ill, burn out, have an accident, or need to deal with a family crisis. ‘We both will work 60h/week for the next three years’ is not a business plan, it’s wishful thinking, and it will either fail outright or fail later.
The advantage of working for yourself or with friends is that you can be open about your needs (work-life balance, added support when you have a flare-up) and put procedures into place to cater to those needs. I *do* like the the idea of having a safe word – the ability to make a clear distinction between ‘not doing so well, will catch up next week’ and ‘doing badly, need intervention’ – without feeling like a complete failure at being a productive human.
LW, two things to keep in mind when deciding:
1) Is the business partner managing their health? Do they have a therapist/doctor/Team Them etc.? You wrote “the money coming in is by-and-large from a combo of their old work and my current work.” Is that likely to change in the (near) future? If not, are you ok with doing most of the work?
2) Do you *want* to be a partner in this firm? Or is that something you feel you owe to your friend/the easyest way forward/the safest thing/… As Captain said, figure out what you really want to be doing with your professional life.
Oooh, yes, the Sheelzebub principle applies in business relationships as in romantic relationships!
LW, one possible avenue would be to work with an outside counselor. In the US, I get regular emails from my local SCORE organization, a mentoring group of retired executives. In my area, they offer regular seminars on everything from search engine optimization to trademark registry. Their main strength though is mentoring and help to build a business plan, which is your main tool.
*Most partnerships run into areas that weren’t planned for.*
IANAL, but I’d offer that one area you are going to want disclosed are previous tax returns. I’d spend the money now to have a licensed detective run a quick profile for you including fingerprints, and I’d be much more comfortable with a partner asking the same of me. Your contract should include Errors and Omissions insurance, and a clause excluding you from any debts the business has prior to you joining it. There’s so much more. I have one of those business plan in a day books, but it’s mainly been a structured way for me to pull notes together, to go over with an attorney.
Yeah, people that actually show up when the going got tough are rare and valuable. I had a person appear to do that for me, but they told me not to pay them when I had outside income, and to pay them later. When I’d lost that income, they demanded instant repayment, while they told everyone how much I owed them. Also, they were clear that I’d be forever beneath them. I found this unworkable.
You don’t have to stay in any relationship that doesn’t serve you. Most people I help comes from me paying it forward.
To be clearer, SCORE hosts seminars presented by industry and legal professionals. They mentor, but don’t give legal advice.
If you don’t feel like you can raise these questions with this person, factor that into your decision. (i.e. Do not partner.)
On that note, it sounds like you haven’t raised these questions prior to writing. Is that because your would-be partner has given you reason to think they’ll react badly? Or is your own guilt making you feel (wrongly) that it wouldn’t be fair to bring the questions up? If the latter, the conversation might go better than you think. And if it doesn’t, well … that’s valuable information.
To be fair, these are hard questions: “Things that could go wrong and what to do about them” is a big area. Trying to bring it up (even to a sympathetic possible-partner and in a complete absence of guilt) without a map is very daunting.
They can be very hard questions, yeah. That’s why it’s useful to ponder whether the prospect of discussing them comes from something the would-be partner has said/done, or whether it comes from the inherent daunting-ness.
I feel like because you are working for and then with your friend, you are bringing platonic social dynamics into a business relationship. A business partnership, an employee/employer relationship, which this started as, is not a charity dynamic. Your friend did not give you something for which they was getting nothing in return. You gave them a product, your labor, and they gave you the monetary value for that (and that value includes vacation and sick days). That this was extremely helpful to your life outside work doesn’t mean it was a gift. Your salary was not a gift. Your job was not a gift. Those days you got off weren’t necessarily a gift. Presumably, if they didn’t think you’d be helpful to the business, they would not have hired you or given you space, bad circumstances or no (and you have proven helpful enough that they want to make you a PARTNER). If it hadn’t be their job, you presumably would have gotten a job somewhere with perhaps a non-friend, and though that job too may have helped with therapy and education, you probably wouldn’t have the same feelings of doubt.
I just think maybe you need to reframe this a bit. I’m not saying that your friend hasn’t gone above and beyond the legal requirements for most jobs. I am saying that GOOD jobs make accommodations to help high-performers because they have value. Your friend is your friend and they love you and they probably understand your circumstances in a way a lot of business don’t or won’t, but that doesn’t mean that the accommodations and space they gave you weren’t also good business sense (and if you were harming the business long-term would your friend still have given you the space? Wouldn’t you have wanted them to tell you and discuss if your ability to the do the work wasn’t working for the business?)
Talking out a way for the business to go on and thrive within both your limitations is giving your friend the exact same help he gave you. He wasn’t trying to sacrifice his business for you, right? It’s okay to feel like a partnership at this point would be a sacrifice and not want to do it. It’s okay to determine and negotiate what is too much within a partnership. You are not treating him unkindly or less kindly than he treated you to do so.
It seems like, even though your friend did a good thing by helping you get up to speed, you’ve also put a lot back into the business, which they’ve got benefit from.
I would separate out the questions:
1. Do you owe your friend your than you’ve given already? It sounds like, probably “no”, even though you will probably help them with advice, emotional support a certain amount as a friend even if you’re not in business together.
2. Starting from where you are now, what’s the best thing for you business-wise? Can you set up a separate business in your own name doing the same thing or do you need expertise or qualifications friend has and you don’t? If you both want to retain the website brand contacts etc which have been set up, can you agree to share those, but each individual piece of work is a contract between the one of you that does it and the client?
If you feel your friend has given you more equity than you’ve paid back, you could choose to share more future revenue with them one way or another, but don’t let that be an infinite amount. Even factoring in their older work and support for you, it sounds like you’ve been pulling most of the weight recently, so think very carefully if you *actually* owe anything, and are not devaluing your own contributions. It sounds like you feel you’re scared you “owe” something, that you actually think you don’t.
Consider if you actually want to work together. It’s been good for a while, but it sounds like, you might both do a lot better without having the responsibility/dependency on the other one doing things in a timely fashion. Constantly pushing friend isn’t good for you, and may or may not be good for them. If you both have the ability to succeed or fail your own way, it may be a lot less stressful.
If you do end up working together, ask yourself, and possibly them, if they go on just “not doing stuff”, is that still a business relationship you want to be in or not? Can you have an arrangement where they do a few specific things but only that? If you don’t want to, don’t commit yourself — they probably will go on having these problems. If you do still want or need to work with them, are there any ways of reducing the amount you depend on them?
This is a great post! I thought something along the same lines, but I couldn’t quite put it together until I saw this. LW, don’t stay just because of guilt. You earned your money and you get to decide whether to stay or to leave, and if you want to support your friend – in the non-monetary way friends do – you can do it without working for them.
Also, good. job on putting your life together. From how your letter sounds, I couldn’t have done half of what you’ve done, you’re amazing! I’d wish you luck, but I’m confident you’re perfectly capable of making the right choices.
Whoops, meant to reply to meadowphoenix. Sorry.
Congratulations on rebuilding your life and getting rid of a giant barnacle of an ex!
I am NOT a lawyer, NOT an accountant, NOT a business expert. (I was in business, did have a business partner; it did end happily. I’m not drawing on that when I write the following.)
I read your letter the first time with an open mind taking into account all your history and gratitude and experience of mental illness and sympathy and situation with your ex. I read it a 2nd time taking into account only what the advantages and disadvantages would be to you on entering into a partnership with your friend GOING FORWARD.
“Difficult to work with.”
“Sometimes getting them to do any work is like pulling teeth.”
Chronic illness that shows no reliable hope of getting better any time soon or ever.
That’s it. That’s the extent of the information for the both the plus and minus columns. This person has a past record of paying you. If you were an employee and your boss stopped paying you, you’d have an easy time getting out of there. If you’re a partner, it becomes much harder to fire the person who’s not doing any work.
It sounds like the only things that make you want to take on the partnership is a sense of guilt and gratitude about favors done for you IN THE PAST.
Questions: Could you make it in this business without the partner? Go into competition? Go into a different business that’s not competition? Could you continue as an employee which would give you the chance to walk away cleanly if you needed to? Because that sounds like the better option to me. I suppose the business might have assets in the form of capital, contacts or customers. Consider that if you walked away from this offer you’d have to start from scratch with those.
Telling you to walk away from someone who has been so good to you sounds mean, so if you want to do something good for someone who has been good to you, you still can. There are lots of ways to show gratitude without taking on a partnership with someone who right now looks like they’re going to be deadweight. You could pay a lump sum. You could take over as owner and employ Prospective Partner paying a fair, or even better than fair, amount for work done.
I believe the redherring element in this letter is the mental illness, but consider how it would sound if it wasn’t a mental illness but a serious other sort of illness: I’m considering going into business with someone who’s frequently ill and unable to do any productive work for weeks or months at a time, sometimes needing hospitalization. Or: I’m considering hiring someone for a responsible position who is frequently ill and unable to meet deadlines or work independently and who even with constant supervision never earns their salary instead leaving it to others to pick up the slack. Not hiring such a person is just practical.
Yeah, that’s sort of what I was thinking. Unreliable is unreliable, and no one wants to be stuck doing all the work for any reason.
On a related note, I hope this letter starts some kind of discussion in the comments about mental illness in the workplace. It would be nice to hear multiple sides of the issue.
The Captain’s advice about how to make a partnership work under these sorts of circumstances is great, I’m blown away.
I just want to break down the motivations the LW has offered up in her letter, noting there could be others we’re not aware of.
1. For entering into the partnership – the other partner has been kind in the past, the LW would feel guilty about not partnering with them because of their kindness.
2. Against entering into the partnership – the other partner is someone who is unreliable about doing work and keeping the business going.
So the motivation for entering the partnership is about the personal relationship with the other partner. If that’s LW’s main/only reason for becoming a partner, I would steer clear of taking on the role. Emotions are a big part of our work, sure, but the partnership really needs to make sense for the LW as a business move and as a career move for it to be a good idea for her. Otherwise she’s setting herself up for a stack of responsibility with very little payoff… which doesn’t sound sustainable for the LW, the business, or her friendship with the partner.
If the partnership is a good career move, and LW would jump at the chance to take it on if not for the other partner’s work/health issues, I would try to keep the work arrangement as is (mostly) while these bigger issues around work completion and health issues are resolved. Something like: “I really love being part of this business. I want to work towards becoming a partner, but it’s not a responsibility I can take on until A, B and C are resolved. Let’s keep things as they are for now while we implement X, Y and Z. I think we’ll be able to move forward when we’ve taken care of them.”
So much good feedback here! I love it.
I realize that a lot of details and nuances got left out because I was trying to tell a rather long and intense story within the 400 words that Captain requested, so here are a few more:
* I love my ‘barnacle’ of an ex with all my heart — it tore me up that I had to kick them out, but the combo of them being out of work + intermittent psychosis was genuinely more than I could safely handle (nor should I, nor am I qualified to). Bless them though, I only think of them with love and bittersweet twinges that I did my absolute best with that situation and they needed more help than I could give. Life.
* Biz partner and I have talked about some of the items suggested, but since months have gone by I feel that it bears revisiting and clarifying and expanding upon (and getting into a written document, yes yes yes). I love all the considerations that have been brought up here. I think that I get caught up in my own head sometimes that I am reliant on them for income right now which makes me feel a little a little overwhelmed to be proactive about discussing all my concerns/questions all the time, but the truth is that I should ground myself in my newfound confidence and position of strength. Biz partner has always been very reasonable and generous in discussions and negotiations. We don’t always agree on everything, but we are almost always easily able to find a solution or compromise that works for both of us, so I think that spending the labor and collective spoons on clearly defining what we’re doing is not a waste of time.
* But sometimes, like when I wrote this letter, I’m feeling reactive to having just poured a lot of my emotional and financial energy into something that I ultimately had to let go of, so this piece of work to be open to myself and others is working a tender muscle.
* I have found a lawyer of my own, though I haven’t seen him yet. Having this awesome list might just give me a framework to feel like I can go into a meeting knowing much of what I want.
* Biz partner taking care of themselves is definitely a ‘thing’ on my list of things that I care about, and sometimes they are better about it, and sometimes they are worse, and although their choices around that do impact me, I also do not want to get overly involved in those choices because that seems like a path to an unhealthy dynamic. I encourage them to make good choices, I praise them when they do, and other than that, I hope that the clear work agreements we hammer out will out will sufficiently protect me, whatever they end up doing.
* I agree with Captain that exploring options is helpful. I am joining a guild, and I am networking with other people who do our thing. If I were to do my own thing, I would not be in competition with my partner, as they have a very specific niche… and if we were to part ways under any circumstance, I am not interested in retaining their client list or the brand. The main value I am getting right now is the practical experience and stable income.
Yay, Thanks for the update. It’s good to build a framework to tackle what jerkbrain can’t process. I sometimes let my anxiety create a binary of “it is perfect or it is utter crap forever oh god leave now” which it applies to every aspect of my life. Having a way to step back and mindfully evaluate the situation from a slightly more objective standpoint is something my great therapist is helping me with now.
Best of luck!
I don’t usually comment but I felt obliged to reply as I have experience in this area.
The Captain is spot on with advice on deciding if you want to partner and what to consider about how to set up.
My advice is about making absolutely sure the terms of your partnership is clear in terms of : rewards and exit plan.
Rewards: make sure you have a split between salary and profits. Typically profits are split equally between partners (or left with the firm as assets). But you have to negotiate and have that in writing. That split would happen for the duration of the existence of the company regardless on wether you are working or not. Again, this is something you need to make clear in writing: are you equal owners?
Now about salary. This is where you have to have insurance as the captain said: what happens if for whatever reason one of you cannot work? How long does the company cover the salary. And what happens if these reasons are not addressed and they impact performance of one of you?
Again there are no right answers here. But these are things you need to discuss, have in writing not just for the two of you but also for future employees.
Now the exit plan: a business partnership is like marriage. You need to be able to leave. In my experience, there is no easy way to break it if one of you is reluctant or unwilling. And it is not just the day to day work and salary. A company accumulates assets, tangible and intangible. How do you value and split those.
In the worst case scenario of a partnership going wrong, one of the two partners ended up supporting the salary of the other for 20 years before he attempted to break it. (And that was because they were approaching retirement and he was getting burnt out.) There were many reasons he kept going for so long, mainly the feeling of obligation to support the partner who had suffered a health issue (it was treated but he was not the same after. Suspected depression but refused to treat it). The partner completely refused to break the company and they have been going back and forth with lawyers for years. There was no agreement about how to break the company and no solution is acceptable by the 2nd partner as he knows he cannot run half any part of the company on his own.
Now I am not saying this is going to happen to you. I am just pointing out some experience that might be helpful.
I hope you both do well no matter what you decide to do.
Don’t Sign that Thing!
Haven’t read the answer or any of the comments yet, but my first response upon reading the question is that LW is more than capable of striking out on her own in this business.
Here I’m assuming it’s something that can be done from home/online and not something that requires a big up front investment like a storefront or pieces of equipment, permits, etc… However, even if OFFICIAL BUSINESS PARTNERSHIP would solve some up front costs the business may have, it’s still not a good idea *because the LW states she is the one doing most of the work right now.*
Partnering with someone unable (unwilling?) to work just drags you down. You are already running the business with the other person’s name in front, there is little point signing on to be co- when you could instead go forth as full and sole proprietor.
I think my question, were I the LW, would be whether this is Partner going through a rough patch and needing more support right now (and we can reasonably expect the support to end up balanced the other way at some point in the future), or is this the way things will be for the foreseeable future? That’s not always possible to accurately estimate, but it would change my impression from “this doesn’t sound sustainable” to “y’all need support structures in place so you can weather each other’s rough patches”.
Yes yes. There is a world of difference between “we will each have rough patches; here is how we will ride them out” and “this is the New Normal.” A friend started a small business and with the best of intentions hired a mutual friend with significant mental health difficulties that precluded her from… well… doing the job for which she was hired most of the time. This worked okay for a while, but Friend A eventually became burned out by doing Friend B’s job for her while still paying her as if she was working, and it made it hard to retain other good staff who were not so much on board with the fact that Friend B would flake 80% of the time. I wish the story had a happy ending but right now they’re still in a state of limping painfully and resentfully along.
I think any sustainable scenario has to include some way of saying “okay, this ain’t working, we need to dissolve it” without massive guilt.
It has occurred to me that the right thing to do here might not be partner. It might be buying the business from them on a monthly payment basis.
That way both of you get what you each need.
They built it, mentored you, gave you support; if they can’t do that anymore, they should let it go with a price that reflects what they have done in the past.
You may have already formed a partnership despite the lack of a formal, written agreement Without one, you may have unlimited liability for your partners debts and for the business. And since you’ve been sharing profits already and operating as partners for a year, I’d say there’s a good chance you have a partnership. Basically, please go consult a lawyer. There are accounting lawyers especially who might be able to tell you what your current position is and how that might affect you – particularly with regards to leaving the partnership.
I commented earlier saying they might already have formed the partnership, but upon a reread of the letter it seems that they’ve formed a general partnership already. All it takes is for them to start behaving as business partners (agreeing to partner, operating the business, and splitting the revenues) for the partnership to be formed. So I suppose the question now is whether to redefine the terms of the partnership in a written agreement or leave. I still say to consult a lawyer in either occurrence, but also especially consider whether your partner is behaving in a way that you can trust. The current dynamic makes me wary, so try to protect yourself first and foremost.
This is basically off topic, but “Do we need to activate Article 11?” is one of the best phrases I’ve ever heard, and I am now going to strive to create a business agreement that involves an Article 11 that can be activated so that I get to say it some day. I am a fancy business lady, so this is well within the realms of possibility. Thank you, Captain!
One I didn’t mention at the time, but one of your very early articles included the phrase “businessy facts make bosses feel good” and I use that very often.
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