- Original Poster
- #1
We have been running a successful partnership business for the past 4 years and an opportunity to open a 2nd branch has presented itself. We have 2 people interested in partnering with us for this venture. We decided that bringing them in as partners is our preference as we do not have the capital nor the desire to own and run 2 businesses in different parts of the country (just giving you some background on our situation).
The big question marks we still have are:
-Business model: we have been advised to perhaps set #2 up as a completely separate company from #1 and to set it up as a Limited Company. That way we still own #1 100% and #2's success or failure should not affect #1. We are open to other ideas though. We really just want the simplest option but that would still give us overall control. Issues we see with 2 separate companies are if the 2 shops ever share stock, as well as if #2 somewhat cannibalises #1's sales (currently we are a destination from all over the country, however we envisage once we open #2 that that shop will take a lot of physical customers from the north of the country.
-Online Sales: Our online sales are approximately 10-15% of our total sales, but we are not quite sure how this would be shared with #2? We figure that after a certain time, #2 will generate it's own online clientele (probably after customers have been in that store, received great service and therefore buy online for their next purchase). Who does the packing and postage? We are only a small store and our online items just come directly off our shelves, not from a warehouse.
-In our current business, my partner and I pay ourselves the same amount month to month (not related to actual profits) and then every few months we look to see our sales and give ourselves a payrise. This has worked so far and we have always been able to afford it. We do it this way because basically anything extra, we use to invest in more/new stock. But we are aware that we probably won't be able to do it this way with the new company. We'll need to know what the profits are from the sales we are making before we decide to spend it on extra stock or consider it as dividends/wages.
-Payment structure for new partners. We were considering something along the lines of us having majority profits for a certain time, but then based on meeting KPI's, the new partners earn in so that they will eventually have majority of profits. Another idea was for them to earn a regular wage but less shares/dividends/profits. They are pretty flexible but obviously it has to be a good deal for all. This is where we are a little concerned about #2 taking sales from #1 once the new partners are earning more of the profit. We're just not sure how to work this out.
Thanks!
The big question marks we still have are:
-Business model: we have been advised to perhaps set #2 up as a completely separate company from #1 and to set it up as a Limited Company. That way we still own #1 100% and #2's success or failure should not affect #1. We are open to other ideas though. We really just want the simplest option but that would still give us overall control. Issues we see with 2 separate companies are if the 2 shops ever share stock, as well as if #2 somewhat cannibalises #1's sales (currently we are a destination from all over the country, however we envisage once we open #2 that that shop will take a lot of physical customers from the north of the country.
-Online Sales: Our online sales are approximately 10-15% of our total sales, but we are not quite sure how this would be shared with #2? We figure that after a certain time, #2 will generate it's own online clientele (probably after customers have been in that store, received great service and therefore buy online for their next purchase). Who does the packing and postage? We are only a small store and our online items just come directly off our shelves, not from a warehouse.
-In our current business, my partner and I pay ourselves the same amount month to month (not related to actual profits) and then every few months we look to see our sales and give ourselves a payrise. This has worked so far and we have always been able to afford it. We do it this way because basically anything extra, we use to invest in more/new stock. But we are aware that we probably won't be able to do it this way with the new company. We'll need to know what the profits are from the sales we are making before we decide to spend it on extra stock or consider it as dividends/wages.
-Payment structure for new partners. We were considering something along the lines of us having majority profits for a certain time, but then based on meeting KPI's, the new partners earn in so that they will eventually have majority of profits. Another idea was for them to earn a regular wage but less shares/dividends/profits. They are pretty flexible but obviously it has to be a good deal for all. This is where we are a little concerned about #2 taking sales from #1 once the new partners are earning more of the profit. We're just not sure how to work this out.
Thanks!
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