Forums: Discussions for entrepreneurs and small business.

Ok, I`m feeling a little bit like Dorothy these days, forging ahead into the uknown in search of the great Oz! I`ve come so far and I don`t want to turn back now, but I need advice on which path to take next.

First, let me give you a little background on my business and everything I`ve done so far to get it going. I have developed a craft-related kit for children, and have sourced the manufacturing overseas. I have designed everything from the packaging and instructions to the actual stickers in the kit, and have been working on this project for well over a year now. I finally have a prototype and I am anxious to start my first production run and start selling my product.  I have no doubts about the product and believe that I will be able to successfully sell it.

I am feeling a bit overwhelmed at the laundry list of tasks that this business demands. It`s hard tackle everything from product/packaging design to the website, taxes, books, marketing, sales - I know I would benefit from having a partner to help me. I have a very good friend, who I know and trust like a sister. We`ve always talked about becoming partners, but for one reason or another (she was getting married, while I was having babies, ect.) it hasn`t seemed like a good time, until now.

We `ve also worked together in the past, so I know she has a strong work ethic, and her skill-set compliments mine. She has also offered to invest in the business. Everything seems like a perfect fit, except...I don`t know how I would structure a partnership like this. I have worked so hard and have invested alot more than money into this business. How do I put a $ amount on that? Do I figure her percentage of the business, based on her initial investment vs mine? Should I accept her offer to invest in the business, leave it at that - and just hire her as employee ?

I would love to get some feedback on this subject. Any thoughts/advice would be extremely helpful.

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Melissa Yamello
Owner/Designer
Storybook Studio
www.storybookstudio.net

Kids` Craft Blast
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Hi Story,

Just some thoughts....

You said it yourself-- you trust her like a sister. Are you williing to risk your relationship with your "sister" for your business? Let me put it another way: Never go into business with relatives. You`ve heard the horror stories, I won`t bore anyone with them now.....

You said it yourself-- you trust her like a sister. If she is (for all intent and purpouses) your sister, you don`t put a dollar value on all your hours of blood, sweat, and tears.

Lastly...you stated in your post that you are considering "....just hiring her as an employee". What if you accidentally start treating her like one?

Good Luck :)

P-

That`s a very difficult decision when it involves a friend.  If you need the investment she`s willing to make, maybe you should look for that elsewhere.  I would suggest hiring her as an employee.  Sure, you might be treating her as an employee because you will be assigning her things to do, but it doesnt mean you can`t treat her with utmost respect.  I know that being able to trust someone is very important. I think she can help you grow the business without encountering problems that a partnership could bring about.  If things don`t work out, trying to end a partnership will be more difficult.  

But if it`s what you want to do, and you feel good about it, you need to consider that working together, could damage your friendship.  You need to be willing to take that risk. 

Thank you both for the sound advice. You are right Janie, it is a difficult decision! I asked myself this question:

Would I still want her to be a partner if she wasn`t willing/able to contribute funds towards this startup? Yes, I absolutely would. But not a 50/50 partnership. I don`t see anything wrong with putting a value to the blood, sweat and tears - even if she was truly family. I can`t sell myself short since I have done so much work and have invested financially as well. She understands this going in.

We still have alot to discuss before anything is decided. To be honest, I`m not thinking about the money aspect much at all. I don`t mind splitting profits - after all, we are sharing the risk. I`m focused more on the other benefits of having a partner - just being able to bounce ideas of one another is huge to me. It`s difficult be inspired everyday. I guess what I`m getting at is, for me, it`s lonely being a solo entrepreneur sometimes! Having someone to share the ups and downs with, as well as going to meetings with buyers, tradeshows, networking events, ect. would be great. Sure, I could hire any employee to do these things, but I doubt they would be as motivated as I am. Maybe I`m wrong about that?

 

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Melissa Yamello
Owner/Designer
Storybook Studio
www.storybookstudio.net

Kids` Craft Blast
Sign-up for our newsletter featuring free project ideas in each issue!

Melissa, if your fine with sharing the profits, feel you`ll stay in business with your friend & believe the two of you will be a greater success, then go for it.

But remember, not everyone can be the Sloan Brothers. And I`m sure they even want to duke it out some days. 

Good luck!