For Anyone Who Has Or Had A Business Partner...

Business By Rachel5370 Updated 6 Jul 2010 , 5:20am by Rachel5370

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Rachel5370 Posted 5 Jul 2010 , 7:46pm
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I found someone who I think is great! She has all the same goals, standards and drive as I do. She is very talented, easy to talk to and smart! She is better at cake decorating than myself, but I have professional baking and restaurant experience to offer. I think it a good match. We have decided to get a commercial space and go into business. One of the things I am having a tough time figuring out is how we pay ourselves. Our plan is to offer items for walk-in customers as well as custom cakes. How do we determine how to divide the labor? Should we base our pay on a percentage of sales? What if we sell cakes that only one of us worked on? We will both be paying for materials and ingredients. Should we come up with a base pay and then do commission for decorated cakes? How do we decide who does which cakes? I don't really want to end up competing with eachother for business. I would also appreciate any other advice from someone who has been there... icon_smile.gif ~Rachel

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jillmakescakes Posted 5 Jul 2010 , 9:43pm
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This is something that you'll need to decide together after running the numbers. Are you planning on working on a commission-type platform (more common in retail), hourly, or salary? My partner and I have a salary type of arrangement, but our salaries reflect the amount of work we put in.

Trust me when I say that the decorating part of owning a business is VERY small. I'd start discussing how you will divide other things like heavey duty cleaning, supply shopping/ordering, answering emails, accounting etc. There are some weeks where my partner doesn't even touch an icing bag, but those week's I also don't do a lot of emails.

Start these discussions now so that it doesn't become an issue later on. The sooner the better. Find out what your partner is comfortable with. Also, ask the tough questions like "What kind of situation is going to tick you off?" Get to know what pushes each other's buttons too. A business partnership is sort of like a marriage, some things should be discussed beforehand, but some things you just have to learn as you go.

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Rachel5370 Posted 5 Jul 2010 , 10:34pm
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That's funny that you compared it to a marriage, those were some of my first words to her! At first I thought we could run it like roomates and just split the bills and essentially have two businesses under one name- but I realized after thinking about that for about 10 minutes that it wouldn't work. This wouldn't work because we are not just doing cakes, we are going to sell items out of a case too. If we did our marketing, purchasing and everything seperately it would not help defray the cost, which is why both of us want a partner to begin with. We have to partner up or it just won't make sense and could end up causing conflict. The good news is that we have a place that is willing to let us sign a 6 month lease and it is mostly equipped. Of course I hope it all works out for both of us- it could be as difficult to dissolve our partnership as it is to form it! I have started an extensive list of topics and questions for our next meeting and asked her to do the same. Last year, I was hired to create a restaurant from the ground up and then managed it for a year- I think that experience is a good one to bring to this experience. This is still different in so many ways though and scary in economic times like these!

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Rachel5370 Posted 5 Jul 2010 , 11:25pm
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Hi, I would like to get a few more replies if possible. Anyone else have partnership experience or advice that you don't mind sharing? Any help is appreciated greatly! ~Rachel

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Kitagrl Posted 5 Jul 2010 , 11:39pm
post #5 of 10

I don't have a partner but on initial thought I would think...couldn't you log your hours and then make sure you both put in the same amount of work, and then split the profits?

Of course eventually you may have to hire people and stuff....

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jillmakescakes Posted 6 Jul 2010 , 12:21am
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The best thing is to determine who will be responsible for what and try to make that list as balanced as possible. Also, just like a marriage, it takes a lot of communication. Definitely let your partner know if something is bothering you so that it can be fixed before it festers.

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Rachel5370 Posted 6 Jul 2010 , 12:58am
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I am thinking hourly would be the way to go, with maybe commission or bonuses to help keep us motivated to promote our business. Of course, the bills might be motivation enough! The list is a good idea, since we seem to have different strengths. I am a little bummed just thinking about that because she is a stronger decorator- and that is of course my favorite thing to do! I am probably stronger at baking than she is. I hope I still get an opportunity to decorate and hone my skills! Thankyou for your replies! (Keep 'em coming?! Please?) ~Rachel

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carmijok Posted 6 Jul 2010 , 1:52am
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I just worked for a bakery that recently went out of business because the owner did not like handling the business side of things. She had one employee that was an unofficial partner who worked in the kitchen. They would divide up the orders for the week and each be responsible for their own cakes. (That is one way you can make sure you keep your hand in decorating.) I was a part time employee who hired on to help with my daughter's wedding expenses. I started out answering phones, taking orders and cleaning and it morphed into that plus doing wedding tastings and invoicing and more office & accounting work than I was ever trained for--simply because the owner didn't like doing it. Neither did I! Especially when we became 'employees' and not contract workers as had been the case. Then she was making me do the insurance and the sales tax and honestly that's not something in which I'm really proficient. So I left. Six months later I hear she's closing shop. But, like I said, not for lack of business. I was turning people away every week because we had too much business. But she wouldn't expand and didn't like the business part so she quit. I guess out of this long diatribe, what I'm saying is that the fun part can get lost in the business side of things, but that's what keeps your business going. You really need to decide early who is going to take that responsibility and not resent it when it starts to take over--because it will if you become successful. The best part about my experience was watching and learning how to do cake...which I started to do after I left. I also learned I DON'T want to open a shop--partner or not! good luck!

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kmstreepey Posted 6 Jul 2010 , 2:07am
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I'm not sure about the division of labor in your business or salary issues, having never owned a baking/decorating business myself. But I have worked on business litigation and contracts and would highly recommend getting all of your decisions in writing now, making your business agreement as detailed as possible. I've seen friends nearly come to blows over business disagreements and it will help you and your partner's business and personal relationship immensely if you decide the nitty gritty details ahead of time and write it all down. This includes what happens if someone wants to leave the business and where to solve any disputes (arbitration, etc). Consulting an attorney will help a lot too - someone who does a lot of business agreements in your area will be able to point out things you might not have thought of. I hope this helps at least a little. Good luck with your business!!

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Rachel5370 Posted 6 Jul 2010 , 5:20am
post #10 of 10

This whole thing borders on terrifying, but it is my longtime dream! I have never let fear stop me from doing anything- but I will proceed with caution and try to head off any future problems. I will ask my potential partner about the lawyer idea. Thankyou for your advice! ~Rachel

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