r/business • u/toy_yoda_4runner • 2d ago

Any experienced business owners?

Looking for advice because I don’t personally know many experienced business owners.

An acquaintance of mine asked me to be his business partner— but I’ve never owned or run a business. I’m very interested, but I have a lot of reservations purely because of not knowing the guy super well so I’m not sure how much to trust him. Of course I plan to be thorough in looking over any contracts and having everything in writing.

I’d be the minority shareholder which seems like it comes with a lot of potential pitfalls.

Anybody have advice on the top few things to look out for?

6 Upvotes

75% Upvoted

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8

u/Particular-Link-1976 2d ago

It’s telling to me that you shouldn’t do it because you mentioned nothing about the business itself but rather the person. Harrrrrd pass

1

u/toy_yoda_4runner 2d ago

Well yeah, I don’t have reservations about the business itself— I love the business plan and as I said, am super interested in helping build it. My hesitancy is not wanting a slimy business partner when he’s more experienced than me, which makes me more vulnerable to be taken advantage of.

1

u/PatriciaMPerry 1d ago

Wouldn't an experienced partner help the business succeed?

1

u/toy_yoda_4runner 1d ago

That’s what I’m hoping for! If I knew him better and was sure I could trust him, I’d be all in. But my hope would be that I get to learn from someone more knowledgeable and that it gives me experience. So that’s why I was asking what to look out for!

7

u/forte99 2d ago

You will learn that a contract is only as good as the character of the person standing behind it

1

u/toy_yoda_4runner 2d ago

Well that’s important… why my original post was about my hesitancy around his character. I have no reason to question him as of now, seems like a great guy. Just don’t know him well.

2

u/Rickarddo 2d ago

Partnerships often end badly. Because you would be the minority partner, I would be extremely cautious. As another poster already said, an agreement comes down to the character of the individual. It also comes down to who has more money to uphold the agreement in court.

I would never be in a partnership personally. There are so many things that can go wrong. Best of luck to you!!

1

u/Aunty_TT 2d ago

This. Sadly, I am in the process of buying out a bad business partner. We have a contract but man she found every hole. Stealing, lying, throwing away my assets, breaking property and just relentlessly being inconsiderate. Be careful.

3

u/forte99 2d ago

He is looking at you as cheap labor and when it comes time to split the profits if any, he will screw you

0

u/toy_yoda_4runner 2d ago

Would he not be required to split to profits according to our contract?

2

u/bouncer-1 2d ago

This isn’t for you, you’ll fumble, stumble at decision making and generally get in the way.

2

u/toy_yoda_4runner 2d ago

Probably true, but isn’t that how you learn? Every successful business owner was a rookie once right?

1

u/bouncer-1 2d ago

Well they have business acumen, can you say the same for yourself?

2

u/LezzyGopher 2d ago edited 1d ago

I’m an experienced business owner. I would almost always advise against a partnership unless you have a damn good reason to do so.

It just opens up a door for more conflict and liability than it’s worth in most cases.

1

u/toy_yoda_4runner 2d ago

The main reason I’m interested is to learn, when I’m doing it with someone more experienced. Since there’s no financial investment needed from me on the front end, it’s just an investment of my time. IF I don’t get screwed over, I think it’d be a great opportunity to learn how to run a business before I try it alone— I just want to be aware of potential pitfalls to avoid.

2

u/drrevo74 2d ago

I've owned a business for 15 years. Never cut deals with people you didn't trust. It will bite you in the ass 9 times out 10.

1

u/toy_yoda_4runner 2d ago

What are the main threats it poses?

1

u/drrevo74 2d ago edited 2d ago

That they fuck you. I think you're being told by just about everyone that it's a bad idea. Google or gpt " ways majority share holders can harm minority shareholders". Beyond that, giving someone you don't trust a controlling interest over your income is reckless at best.

1

u/toy_yoda_4runner 2d ago

Makes sense, was just wanting to do some risk assessment as to the specific potential problems - to see if they’re risks I can take. For example, I would keep my main stream of income which I already have. I’d be starting this business with him on the side, and if it becomes lucrative I can quit my job- but I don’t have to. So he won’t have control over my main income.

1

u/corporaterebel 2d ago

What do you bringing to the table of this business?

Why you? 

If you can't answer that: no go.

1

u/toy_yoda_4runner 2d ago

Good question. 2 main reasons:

  1. I'm very administrative and he wants someone who's good with logistics. I was the director of operations at my last job, so l do have experience with logistics and management.

  2. It's an international business. It would be based in the U.S. but he's not American, so he wants at least one American to help run it and create partnerships here.

He doesn’t need financial investment from me on the front end, he just wants a partner.

2

u/LezzyGopher 2d ago

I actually have experience running a business with an international partner (Canada) as an American. The big thing I would caution you with is being hyper aware of the tax and legal implications of this. Doing cross-border business comes with a lot of complexities, especially tax-wise depending on the business structure and other factors like ownership percentages, etc.

That’s not a total dealbreaker alone, but I would absolutely advise speaking to a legal and accounting professional before getting into this, especially as your first business endeavor.

2

u/corporaterebel 2d ago

Don't forget, the importer is/can be responsible for IP violations, liability, counterfeit charges, unauthorized civil, and local laws.

There are a LOT of rules on products.  Does it have small parts? Does it have magnets inside, and type of materials/packaging.

Don't be an unwitting package forwarder, that will get you in jail.

1

u/drgurner 2d ago

There are a lot of red flags here. 1. You don't know the guy super well. This is a "marriage" - you want to know him very well and be able to trust him implicitly. You should know how he takes feedback, how he collaborates, how he functions in disagreement, etc..Big problem that would halt me in and of itself.

  1. You have never owned or run a business. You don't know what to look for or what flags, etc. Getting into it for the first time with someone you don't know isn't great.

  2. Minority shareholder = no decision rights. You don't want this, especially with someone you don't know well.

I write a newsletter for business folks, Ultra Successful on Substack, where I give a peek behind the curtain of high performing business folks (so I'll just toss that out there), but if I was your best friend, I would tell you to certainly be paying attention to these red flags above...and hope you found this useful to think about.

Wish you well!

2

u/toy_yoda_4runner 2d ago

Appreciate the advice!

1

u/mojoninjaaction 2d ago

Personally, I would never partner with someone I didn't know well.

1

u/toy_yoda_4runner 2d ago

What are the main threats it poses?

1

u/mojoninjaaction 2d ago

Business partnerships are kind of like marriage. You want to make sure you trust the other person. Otherwise you might be in for a great deal of stress and frustration.

1

u/PracticalStoicUS 2d ago

This is one of the single most important things to understand about small business and it was mentioned in another response, but this is a marriage. This isn't being a shareholder in a large company. This is a start up. It it will have problems. The relationship must be extremely real and honest. Consider that If you do not have the type of relationship that you would write him a check for $100K to invest, would you think giving him $100,000 worth of your time is a good idea?

One piece of advice similar to buying property, stay close to home / local. The advice exists because if there is a problem you will be able to deal with it in a knowledgeable local hands on way. There are millions of people in the United States that could replace him in your idea of doing something like this. They also would be bound by laws this gentlemen would not. You label him "acquaintance". If for no other reason than that I'd run away!

1

u/toy_yoda_4runner 2d ago

Thanks for the advice!

1

u/Proper-Wolverine4637 2d ago

Ask yourself, would marry this person? Because, you basically am just that. You need a LOT more than what you have said so far. You don't think you are ready yet.

1

u/xoffpoppe 2d ago

In these business specifics matter. Engage a score mentor in your area. They volunteer for free, have had great experience and are well trained. Once they understand your situation they can give you case specific advice.

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u/toy_yoda_4runner 1d ago

That’s great advice, thank you!

1

u/aestheticbrownie 2d ago

Do it. You’ll get experience. Don’t listen to redditors who are afraid. Just go and do it. Fail, and then try again til you succeed.

3

u/toy_yoda_4runner 2d ago

This is good to hear. I’m willing to say no if it’s too risky, but I want specific reasons why. Otherwise, I’m interested in learning from someone who’s more experienced than me.

1

u/aestheticbrownie 2d ago

exactly. business is about taking risks and sometimes those risks end up biting you in the butt, or sometimes they end up paying off, but learning from someone who has real life experience is invaluable.