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Thread: Partnerships or joint ventures

  1. #1
    Diamond Member
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    Partnerships or joint ventures

    Once again I speak from personal experience.

    If you go into a partnership ... make sure you understand all aspects of the partnership.

    There is no such thing as a verbal agreement ... well there is ... but if you getting the short end of the stick then chances are you gonna end up with the short stick.

    When a person tells you ... you are in it "together" ... make sure you understand what it means ... 50 % means you have 50 % rights to everything ... not just the debt.

    if you earning R5000 a month and driving an old rusted company bakkie or your own vehicle and your 50 % partner is drawing R50 000 per month (to keep up his/her lifestyle) out of the company and driving a R1.5 M company car ... best you be putting a little more thought into the partnership.

    or the company purchased your delivery bike and claiming the vat and expenses every month ... yet its being deducted from of your monthly salary.

    There are so many things to be aware of when going into partnerships/joint ventures.

    Make sure you understand your role in the company ... each persons role should be clearly defined before it gets out of hand.

    You get the partners who always seem to be in the office doing paper work ... delegating to everyone all the time ... always too busy to tackle those crappy jobs.

    Beware of going into a partnership where the company is already operating ... and the previous owner feels he is the boss man ... you find he still treats the partners like employees.

    Take a break and look around ... listen to your gut ... if it feels like your getting screwed ... there is a good chance you are.
    Comments are based on opinion...not always facts....that's why people use an alias.

  2. #2
    Diamond Member Blurock's Avatar
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    Good advice Ian. I've been done in by shareholders in a business and know exactly what you are talking about.
    Before entering into any contract or partnership, make sure that the rules of engagement are clear and in writing, so that there can be no misunderstanding.
    Trust is a big issue in business and if you cannot trust your business partner/associate/shareholder, rather walk away from the deal.
    I am now in a business where I am the chief cook and bottlewasher. I look at my boss in the mirror every morning and I am glad that I have a business with someone who I can trust.

    My success now is not having partners or shareholders. Collaboration is the key word. I buy from my suppliers and service providers and support them for a s long as they support me. I give my customers my best service possible and they stay with me for as long as I support them. If I slip up, they may or may not give me a second chance. Fortunately, I have not lost a customer yet.

    There are times when the collaboration of two or three companies are required to conclude a bigger transaction. Each party will then perform their function or supply their product independently, but to the benefit of all. Should one of the parties not perform as required, they would understand that they will not be involved in the next deal. Its almost like building a house; one supplies the bricks and cement, another the glass and windows, or the roof and one puts it all together. Each one is an expert in their field and ensures that their part of the puzzle is performed to perfection. This is a guarantee that the customer gets the best deal and that I do not have to be solely responsible for staff issues, supplies or cash flow etc.
    Excellence is not a skill; its an attitude...

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