Forums: Discussions for entrepreneurs and small business.

Hello all, I use to visit here often, but have been too busy with my latest venture to stop by.

As with any venture you can`t foresee everything and this one has me puzzled.

There are 4 co-owners to this business and part of our agreement states (in a nutshell) that all monetary and business decisions shall be brought to a vote amongst the primary and/or co-partners. But that`s the problem, there are 4 of us and I can easily see a situation where we might tie on a "yes" or "no" vote.

Any ideas on how to break the tie that aren`t too terribly cheezy? Or maybe some of you have experience with these problems and can give me some real life scenarios and how you solved the problem?

Thanks,
~Chris
www.gonink.com

I was in this kind of situation for years, working with bands. In so many cases, a band has an even number of players. Being what they are, in most of those situations they start out believing that everyone should run everything. A band "leader" is a figurehead, someone to talk with the public.

Sadly, none of those bands ever get anywhere. That`s why at some point there has to be an executive decision-maker.

One recommendation would be that before you and the partners make any further actions or plans at all, you have a single topic and single purpose: to decide on a managing director.

Consider it this way: Suppose the managing partner gets a 30% vote in any project decision. Even if one partner abstains, two partners can disagree and have a majority decision. But if two partners agree and two don`t, the manager has enough extra clout to make the decision happen.

That 5% "leader`s staff" could be timed, and move around in cycles. Maybe you`re the manager for a year, then the next person, then the next. Or, to start things out, maybe only a quarter or half a year.

My view of it is that if you guys are developing a plan and half the company disagrees, then there`s something wrong with the plan itself. It`s pretty unusual to have a continuing situation where nobody can agree due to a 50-50 split, pro and con.

Aaaaah, a Director with 30% power. Now that`s just perfect and the idea of moving the "power" around amongst the partners in a timely manner is just as good.

Thanks Craig, very good ideas!

Hey, I just hope it works! :-)

Hey Brandon,

How about $0.05 per decision we need? I figure we`ll need at least 10 or so a year. And hey, with this government bailout looking like a thing of the past, a $0.05 might be tempting in a few months. Ha! I kid of course. Let`s not get into a political discussion.

That is when the others have to check their egos at the door and not backbite or undermine the decision maker if their decision is not supported.
And that might be the toughest part out of all of it. Because it`s my wife and I along with another couple. Imagine a very heated discussion and then trying to go home and go to bed with your business partner who hates you more than a 3rd degree sunburn. LOL

There`s an exception in business structure, where it comes to having a combined business and love relationship. Again, I`ve seen this a lot of times in the music business. In fact, there`s been a sort of unstated rule that in any band where two of the players either already are married, or fall in love and decide to marry, the band stands an overwhelming chance of breaking up.

My above suggestion won`t work in the situation you`ve described.

Instead, I would suggest that you figure out a way to get a "mediator" on some sort of retainer or as a 5th partner. In a peculiar way, it would be like having a "board of director" with only 1 director. The only purpose for that person would be explicitly as judge and arbitrator.

Otherwise, one or both of the marriages will suffer, and depending on the amount of money invested, either the marriage(s) and/or the business will collapse.