Thinking About Taking On A Partner?

Business By muddpuppy Updated 16 Oct 2010 , 12:01am by kaat

muddpuppy Posted 15 Oct 2010 , 3:05pm
post #1 of 14

Hey CCr's! If anyone can understand the stress of building a cake business it's you guys!! Please feel free to give me any and all opinions / advice / ideas!!!

So, here's the deal, I've been legally in business for 5 years, everything is going well, progressing and I was able to open a store front location this past spring! No more coffee shop meetings for me! lol..My issue is that it's incredably taxing! Time and money wise! I have one part time employee, but I'm not really prepared to take on anyone full time which is what I actually need.. so here's the question... If I can find a partner, to split expenses, work load, responsibilities will I regret it? I have a billion plans to expand my business but I can't see it happening without help and I'm sure there is some one in my area who might be interested in signing up... What do you think?
Have any of you taken on a partener after the business was established?

Thanks in advanced!!!

Stressed !!

13 replies
leily Posted 15 Oct 2010 , 3:56pm
post #2 of 14

As a personal opinion i prefer an investor (or a silent partner is what some like to be called). We set up an agreement about how much $ they are investing and then what they get in return, again a monetary value, typically a percentage of sales, or % of profit/revenue depending on the agreement.

I have had two people request to be partners in a business before and i turned them both down, mainly b/c 1) i hadn't known them very long and didn't know what type of business sense the had 2) I don't want someone else screwing me over b/c of stupid mistakes or on purpose

I just offer a caution of if you do get a partner have EVERYTHING and i mean EVERYTHING written and drawn up with an attorney, and figure ALL worse case scenarios, or what happens if one of you wants to get out, or what happens if something happens to one of you (you want to make sure that you get the business and that they don't will their percentage to someone else and you end up with a new unwanted partner), who gets the final descision if you don't agree on how to expand etc.

If one of you gets out of the agreement then you'll want a non-compete clause too so that your partner can't start up a competing business with your clients and recipes etc...

There is A LOT to think about if you get a partner. That's why i prefer the investors, just a little bit more clean cut with my experiences.

kaat Posted 15 Oct 2010 , 4:41pm
post #3 of 14

I'm interested in hearing what everyone has to say - I am also debating a partnership but not 100% sure it is the right way to go.

diane223 Posted 15 Oct 2010 , 4:57pm
post #4 of 14

While it might sound like a great idea, I agree with the previous poster. I would rather someone invest money than come in and be a partner with me. You took a lot of time to establish your name and brand, this person will just walk right in. They could ruin your reputation and leave you worse off. There are issues with investors as well--like who has final say on how things get done, but if you make the agreement and draw up the responsibilites in the beginning I think you would be better off. I can sympathize with you right now. I am still building and not yet ready for a storefront. I do EVERYTHING myself, as I'm sure you do. It's tiring, frustrating and downright exhausting! But, I think if you stick with it, you'll be happier that you didn't have a partner.

jason_kraft Posted 15 Oct 2010 , 5:17pm
post #5 of 14

What do you mean when you say you're not prepared to take on a full-time employee? IMO it's not realistic to run a retail shop without at least one full-time employee to staff it.

anasazi17 Posted 15 Oct 2010 , 5:31pm
post #6 of 14

I opened my business with a close friend as my partner, we created the business and worked together for many years prior to being official. When we decided to open the shop she stayed at her full time job and I did the bakery full time. I became way more personally invested in the business (due to the fact I was doing it ALL the time) and soon weird feelings began to happen. I just went through the process of buying her out. The good thing is I think we are better friends for it. Moral of my story is I would search for an investor )or full time employee to start) as opposed to a partner. This way, there is one decision maker about the course of the day to day operations-you. You wouldn't believe the weird feelings that come up between partners, especially if you don't begin on an even playing field (you've been running the show for a while now).


muddpuppy Posted 15 Oct 2010 , 6:27pm
post #7 of 14

Just a side note to clarify...

I am my own full time employee.. lol..I'm a custom design service, not a day to day retail shop. I could run my shop with day to day sales and that mean more time/money/aggrevation. Not that that is the direction I want to go

Thanks for all the responses!!

Auryn Posted 15 Oct 2010 , 6:28pm
post #8 of 14

If what you need is a full time employee than that's what you should get, not a partner or an investor. They are two very very different things.

Are you prepared to have someone (who potentially doesn't know squat about your business) have a say in what you do and how you do it??
How about them walking around and saying they are the owner of your business??
No matter how well you write something up you can't stop them from saying something like that when they are not around you.
You will have to deal with this person on a regular basis and you can't tell them to take a long walk off a short pier.

Do you have the character fortitude to have drawn out arguments and disagreements with this person? to stand up for yourself and not be pushed over??

jason_kraft Posted 15 Oct 2010 , 7:12pm
post #9 of 14
Originally Posted by muddpuppy

I am my own full time employee.. lol..I'm a custom design service, not a day to day retail shop. I could run my shop with day to day sales and that mean more time/money/aggrevation. Not that that is the direction I want to go

I'm impressed...when I ran the numbers when we first started our business, I found that a dedicated retail storefront was not sustainable long-term with only custom orders, unless we increased sales volume several times over and/or pursued the wholesale channel. You may have to go the day-to-day sales route if you want to stay profitable (unless you got a really good deal on your rent).

bakingpw Posted 15 Oct 2010 , 8:56pm
post #10 of 14

I have had a partner after being established for 4 years. We are good friends. She ran the front of the retail, I did all the baking. We were a good team. I have no regrets.

But let me ask you a question: If you take on a partner, you will give away (sell) a % of your business. In retrospect, it makes more sense (to me) to pay someone to help fill-in, rather than give away a percentage of your business.

muddpuppy Posted 15 Oct 2010 , 11:24pm
post #11 of 14

bakingpw -> that's so what I wanted to hear.. lol.. I was hoping by taking on a partner that they could handle the retail store front leaving me free for custom orders and expansion plans.. lol.. I dunno...

Thanks for all the thoughts everyone!

LuluSweetArt Posted 15 Oct 2010 , 11:28pm
post #12 of 14

When I first moved to San Diego, a friend of mine from college and I decided to launch a cake business. She had just graduated from pastry school and although I am self taught, I had enough know how to keep up with her. We did a total of three cakes together. The first cake I baked, filled, and decorated by myself, but we both got the credit for it. The second cake, grooms cake, and 300 cupcakes we did together, she baked and I did all the filling and decorating. I didn't mind the work disparity as much as her lack of work ethic, unprofessional attitude, and her "it's good enough" mindset. She always thought things were "good enough", she never wanted to go the extra mile for the client. It really bothered me and I ended up splitting off from her. Now I'm sort of gun-shy when it comes to working with other people. I know that I am always dependable, I know that I can count on myself to do a good job. So it's really just a matter of whether you can find someone that you can trust to really support your business and to adhere to the same work ethics and goals that you do. If you can't, then I would really recommend finding a silent partner or investor, or just hiring a full time employee. Best of luck no matter what you decide to do!

Occther Posted 15 Oct 2010 , 11:51pm
post #13 of 14

Ohio used to have "Women in Business" seminars. I remember attending a session about various business models - sole proprietorship, partnerships, corporations. All the presenters (attorneys) highly recommended avoiding partnerships. They stated it was lead to the most business disasters/failures. Instead of a partnership, are there any other cake decorators that might want to lease your shop during off hours? CC members are always looking for way to make cakes legally. Again, you would have to draw up a very specific lease agreement - but it might bring in the extra income to make your shop more profitable.

kaat Posted 16 Oct 2010 , 12:01am
post #14 of 14
Originally Posted by Occther

Instead of a partnership, are there any other cake decorators that might want to lease your shop during off hours? CC members are always looking for way to make cakes legally.

Now there's an idea! I've been trying for months to find a kitchen to rent - can't find anywhere - and can't really afford a shop on my own either, I know a few cakers in my area in the same situation. It wouldn't take anymore work on the shop owners part but could be a good source of income. (If you don't mind helping the competition! icon_wink.gif )

Quote by @%username% on %date%