all good points above - one more to add
some businesses don't pay out any money for 1-6 months - you note that he is counting on revenue from the business right away
you will want to reinvest as you bring in money for possibly the first year
if you are always worried about making his payroll, this is going to cause some serious stress
also, since you are draining your savings, you should be the first one paid back
my brother wanted to start a business with me - i said no, because i was honest, that i didnt have the funds to survive until the first payouts started rolling in, likely 6 months in = he ended up running a successful business for the last 20 years, but he was the primary invester and recipient of all funds
@BlixkEm24 Me too; that's why I posted because I have severe trust issues and wanted to make sure that I go into this with my head and not my heart.
My boyfriend and I have decided to start a business together. He's demanding to be a full partner but has no money, has not cooperated in the setup but tries to be the final decision maker. In addition, we will need to invest my savings into equipment to start and he is counting on his earnings from the business. I'm worried that if the relationship doesn't last, I will lose on this investment. I love him but worry about this business relationship.
I want us to be successful on all fronts but I'm not sure if I will be able to recover if he makes poor decisions.
Never mix business and personal. And right now, it sounds like you're letting a personal relationship/feeling drive you toward a business decision.
At the end of the day you have to do what is right for you. Is he bringing something to the business that you can't such as any special skills?
I don't think I would start a partnership here because you already said he isn't good with money and doesn't have a savings account and may not be realistic about his expectations.
A lot of great points and experiences in this thread. @S_choco this doesn't sound like a good idea.
Your BF is wanting to put all of the responsibility/ liability on you.
You've already said he isn't good with money and has no savings. Idk... kind of sounds like he is looking for a free ride.
Keep us posted if you'd like.
I wish you the best with your business!
If you are going to do it, let him buy his equity over time.
Create an S Corp with 1000 shares of stock.
You put in $51k and the company pays you back at 10% interest.
He puts in $1k per month and earns 1% of the company each payment up to 49k.
The company is split 51/49 in your favor.
etc etc etc
That is a very educated response. There are many companies that started out with one person having money and the others not. What they utilized was work, work ethics and time they will put into company to help the company grow. You should also create By Laws to protect both of you. Know where both of you stand within the grounds of the company.
1. Establish titles and roles along with responsibilities of each role.
2. Sign an agreement between the two of you making sure you personal lives do not effect your business lives an call each other on them when you cross the line. High moral will protect the two of you.
3. Rember that there are plenty of businesses where spouses have failed in relationships and marriage, but still run a very successful business together by abiding to their original goals.
4. Make a business plan
5. Allow him to assist you with the decisions but be firm that you are the deciding vote and its your choice to use his recommendations. If that is not an option, you can also write notes on small pieces of paper and allow up to 4 options make each option have 2 pieces of paper. Place in a bag, then draw from the bag. The first option that has pulled twice becomes a mutual decision. This will eliminate harsh feelings and might allow both you to feel that is was more of a mutual decison and you will usually both work smarter and harder to acheive your goals.
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Thank you for posting on this subject. I too am looking to start a small hobby business with my SO. Even though my SO hasn't asked to be a controlling partner or anything, I still had questions regarding this matter since I will be funding the business 100%.