Quantcast
Jump to content

Partnership split suggestions.


Recommended Posts

Hey everyone,

 

This is my first post on this forum. I hop on here occasionally to get ideas for my business. I've run into a slight problem with my business and thought I would see if anyone on here had any recommendations. Just a little background information: This is a family owned and operated business. It was started in 1960 by my grandfather. My father inherited the business back in the early 90's (I believe). We hit hard times in the recession, and were able to tough it out. My brother and I had been employed there for the previous 13 years. 2 years ago my brother and I took ownership of the business as 50/50 partners.

 

The past 2 years have been a learning experience. My dad owns the property and we are renting the property for a very high amount. We're probably paying 2.5 times what the property is worth, but we have a running business for that (including shop equipment & previous clientele). It has been my brother and I doing everything for the past year. We both handle our own estimates, customers, and parts ordering. I have been handling bills, taxes, and probably 75% of office/management responsibilities. We have occasional spats, but last week it came to a head.

 

My brother is an awesome technician! He can handle small to large jobs with ease. He is constantly pulling motors, doing 1 ton 4wd transmission jobs, head jobs on northstar engines, you get the point. All the big stuff. I can do pretty much anything as well, but I definitely don't get as many hours because of office responsibilities.

So enough of that I'm looking to make the business more profitable, and basically am gridlocked because my partner has not been wanting to hire a secretary or technician. He has very high standards and no one seems to meet them. So we got into a fight because of personal stress issues on his end and business stress issues on my end. I want to fix this problem as we are brothers and don't want to see this come between us. My brother wants to liquidate the business, which at this point wouldn't benefit either of us from my point of view. I told him that I would like to do a 51/49 partnership so that we could move the business forward and this was a huge insult to him because he thinks I'm wanting to go on a power trip or something.

 

So tonight I was trying to think of another solution. We have been taking a draw for payroll of the same amount for the previous 6-7 years. What are your guys opinion given our current situation of offering him 70/30. And also partner that is taking 30% of profits getting a salary of what we have been taking for the previous 6 years. I feel that if we could move the business forward by hiring additional help it would pay the 70% partner well and the 30% partner is guaranteed the existing salary + 30% profits. As far as responsibilities the 70% partner runs the business and the 30% partner is pretty much turning wrenches. Does this sound unreasonable or does anyone have any suggestions? I know it's probably hard to tell without numbers. I'm going to crunch some more numbers before I make him an offer as it may be to close at 70/30.

 

I really want to move this business forward, but not at the cost of our friendship.

Any help in this matter is greatly appreciated!

 

 

Link to comment
Share on other sites



I believe you major problem is the operating structure. Even though you are 50/50 partners you are running 1 shop and there are no two captains to 1 ship. It seems like you may have an issue where your brother does not want to relinquish the feeling of being the owner. I have ran into this problem in the past as well. It also doesn't help that you don't have any dedicated front end people as you are turning wrenches and working the front end. There really should be a division of responsibilities IMO.

  • Like 2
Link to comment
Share on other sites

I take it your father is still alive, if so, ask him. He might be able to solve the problem seeings how he knows the biz and more than likely your situation isn't just behind the garage doors. I'll bet he's well aware of the situation.

Link to comment
Share on other sites

Thanks for all the input guys! Yep, dad definitely knows what's going on :-) He came into the office Monday morning while we were having a "discussion". Mspec1performance has pretty much hit the nail on the head. 2 captains, but for the most part we agree on a lot of things. When it comes to the business end of it he has disagreed, but he is unaware of what it takes to run a business. We both agreed tonight that we're going to be too profitable this year to just walk away. As for right now we are going to stay 50/50. Also my father is going to help us out in the office, but I'm doubtful about how long that will last. I was very clear that if my father starts slacking I will hire someone to help out, whether it is a tech or office manager.

 

Thanks again,

Jordon

Link to comment
Share on other sites

  • 7 months later...

I've thought about that taping it! It's not that crazy anymore. Now a few years ago... my youngest brother was also employed while my father owned the business, and looking back it probably would have made a good TV show :-P Things are going pretty well. Tensions came to a head, I told him that I respect him as a business partner to make decisions, and he should return the favor. He seems to see things one sided. He doesn't realize what goes in on the business management end. I've started to take more liberties on purchases for the business and decisions. I always try and run it by him. The business is becoming more profitible and that's what matters. So just wanted to say thanks again for the input!

Link to comment
Share on other sites

Right now you guys have high paying JOBS. if you want a business then you'regoing to have to hire people to work in it. I'd startwith anoffice personnel that can do MORE than write tickets. This position is often under valued. I also agree thatyou should have dedicated roles in whichyou get paid for. The profit split would be just that..a 50/50 split. I thinka 51/49 or 70/30 is indeed a power trip o . of some sort. Hireworkersso that at some point you 2 can step out of the employee suit i ifyou so desire...otherwise you just have a very high paying job.

Link to comment
Share on other sites

davine4real,

 

I read back on the post and realized that I left out lots of updated information. So I ended up going ahead and running an ad for a secretary / office manager (in training) postition. I ended up hiring someone and have employed them for 6 monthes, against my brothers wishes at that time. She was out of the office this past Friday and left early on Thursday. My brother came to me and said, in so many words, that he didn't know how we did it without her. I feel bad for this girl because she has the worst luck... she misses work a lot. We have definitely been to lenient and are going to have a talk with her.

 

As far as the future, I'm definitely looking at hiring another tech, hopefully by the next summer. While my father was around he took in some "project vehicles" and I've been riding him pretty hard on finishing them up to clear out a bay. Once again my brother is not for hiring a tech, but I think that he's starting to understand that it will be a wise decision. We've done a little more advertising this past year and I think that it is paying off. I'm starting to have to turn away a few vehicles. I'm still turning wrenches, but this year I feel as that I've taken a step back, re-evaluated what my "JOB" is, come to realize that I am a business owner, and I know that I have a very strong influence over my future. Before I think I was so overwhelmed by large overhead, and getting the next car out that I was missing this!

 

I'm looking to the future! Hope everything is well with you guys and thanks again,

 

Jordon King

Link to comment
Share on other sites

  • 3 weeks later...

Have you thought about working up the numbers of technician productivity, car count, ARO, etc to show your brother that you are at capacity or not. Also keep in mind you time is split between office and tech so take that in to account. Maybe showing your brother the numbers and saying "hey we can't be any more efficient without more staff, here are the numbers"

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Have you checked out Joe's Latest Blog?

         5 comments
      I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.”
      Judging from personal experience as a shop owner and from what I know about the auto repair industry, I can tell you that other than a few exceptions, the turnover rate for technicians in our industry is too high. This makes me think, do we have a technician shortage or a retention problem? Have we done the best we can over the decades to provide great pay plans, benefits packages, great work environments, and the right culture to ensure that the techs we have stay with us?
      Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills.
      Here’s one more thing to consider, for the most part, technicians don’t leave one job to start a new career, they leave one shop as a technician to become a technician at another shop. The reasons why they leave can be debated, but there is one fact that we cannot deny, people don’t quit the company they work for, they usually leave because of the boss or manager they work for.
      Put yourselves in the shoes of your employees. Do you have a workplace that communicates, “We appreciate you and want you to stay!”
  • Similar Topics

    • By Joe Marconi

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.

    • By nptrb

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.

    • By jadetrost
      Hello guys I’m Jade Trost 56 years. New  on this forum 
    • By carmcapriotto
      What if there's a fire in your shop? An oil spill? A natural disaster or God forbid, a death? How do you prepare for that? Well, This week, Hunt talks about preparing for the unexpected:
      Vision Expo: Hunt shares experiences and insights from attending the Vision Expo in Kansas City, emphasizing the importance of community and industry events. Importance of Preparedness: The significance of being ready for unforeseen incidents, such as theft or natural disasters, affecting auto repair shops. Insights from Roundtable Discussions and Classes: Valuable lessons from discussions and classes, including managing risks and implementing preventive measures. Understanding Insurance Coverages: The necessity of comprehending what business insurance covers, identifying coverage gaps, and making sure you have comprehensive protection. Preventive Measures Against Risks: Steps to minimize risks associated with fires, accidents, and other potential threats to auto repair shops. Contingency Planning: The need for having a solid contingency plan to tackle unexpected situations effectively. Financial Readiness and Strategic Planning: Emphasizes the role of financial preparedness and strategic planning in fostering long-term success and stability for auto repair shop owners.  
      Thanks to our partners, NAPA TRACS and Promotive
       
      Did you know that NAPA TRACS has onsite training plus six days a week support?
      It all starts when a local representative meets with you to learn about your business and how you run it.  After all, it's your shop, so it's your choice.
      Let us prove to you that Tracs is the single best shop management system in the business.  Find NAPA TRACS on the Web at NAPATRACS.com
      It’s time to hire a superstar for your business; what a grind you have in front of you. Great news, you don’t have to go it alone. Introducing Promotive, a full-service staffing solution for your shop. Promotive has over 40 years of recruiting and automotive experience. If you need qualified technicians and service advisors and want to offload the heavy lifting, visit www.gopromotive.com.
      Paar Melis and Associates – Accountants Specializing in Automotive Repair
      Visit us Online: www.paarmelis.com
      Email Hunt: [email protected]
      Get a copy of my Book: Download Here
      Aftermarket Radio Network
      Click to go to the Podcast on Remarkable Results Radio
    • By carmcapriotto
      This week, Hunt takes a deep dive into the hot-button issue of price increases within the auto repair sector. He offers a nuanced examination of vendor pricing, market dynamics, and the psychological elements of setting rates in your business. With examples from real-life scenarios, this episode is a treasure trove for auto repair shop owners striving for balance between profitability and customer loyalty in today’s volatile economic climate.
      • The Psychology of Pricing: Unpacking the reaction to vendor price increases and what it reveals about our own pricing strategies.
      • Market Dynamics: Exploring the balance between cost, value, and competition in the auto repair industry.
      • Strategic Decision-Making: How to navigate the complexities of pricing decisions to ensure business growth and sustainability.
      • Real-Life Examples: Actual examples from a shop owners' group debate to illustrate broader industry challenges.
      Thanks to our partners, NAPA TRACS and Promotive
      Did you know that NAPA TRACS has onsite training plus six days a week support?
      It all starts when a local representative meets with you to learn about your business and how you run it.  After all, it's your shop, so it's your choice.
      Let us prove to you that Tracs is the single best shop management system in the business.  Find NAPA TRACS on the Web at NAPATRACS.com
      It’s time to hire a superstar for your business; what a grind you have in front of you. Great news, you don’t have to go it alone. Introducing Promotive, a full-service staffing solution for your shop. Promotive has over 40 years of recruiting and automotive experience. If you need qualified technicians and service advisors and want to offload the heavy lifting, visit www.gopromotive.com.
      Paar Melis and Associates – Accountants Specializing in Automotive Repair
      Visit us Online: www.paarmelis.com
      Email Hunt: [email protected]
      Get a copy of my Book: Download Here
      Aftermarket Radio Network
      Click to go to the Podcast on Remarkable Results Radio


  • Our Sponsors










×
×
  • Create New...