# Partnership with a family member: which model ?



## Eduardo Gomes (Nov 10, 2014)

I liked to give me your opinion about the following: if a familair want to partner with our operating what model to follow?

For now I see two alternatives: 
1 ) the hives are both and share everything;
2 ) the hives are of each and share everything else.

Between the two having more to the latter. We help each other, share infrastructure, but when deciding on the management to make the hives (how, when, for what purposes ) each assumes its responsibility.

I put this question because I have a family member who is seriously thinking about partner with my operation .


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## snl (Nov 20, 2009)

As an accountant, I have rarely (if ever) seen an equal partnership that lasted ..........since you only gave 2 alternatives, my vote is for #2


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## Eduardo Gomes (Nov 10, 2014)

snl said:


> since you only gave 2 alternatives, my vote is for #2


Thank you snl.
At this time also seems to me that the # 2 ) is more promising .
If you want to put other alternatives will help me to better see the whole picture.


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## BobRagsdale (Nov 23, 2014)

I agree with Eduardo that equal partnerships are difficult, but I would vote for #1. I would prefer to have everyone committed to the success of all of the hives if they are to share resources. #2 looks ripe for conflict if one individual is successful and the other is not. The first may want to invest more while the other wouldn't have the resources to do so, etc.


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## Tenbears (May 15, 2012)

#3 alternative, run two separate businesses, If things get so busy one person cannot handle it. hire employees, If you love the family member a partnership will rapidly reduce it to haltered. If you simply like each other, someone will most likely die. Just my Opinion based on 70 years experience.


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## My-smokepole (Apr 14, 2008)

I to would would vote for # 2. With Equipment cost shared between you on a share type deal. If you have nothing put $ 1000.00 each buy a extractor and a tank for Capping's. And so on. When and if you to decide to quit you can spilt easily.


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## Allen Martens (Jan 13, 2007)

Get it legally written up. Make sure you have a shotgun clause.


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## Stephenpbird (May 22, 2011)

The first thing that should be agreed in a partnership is How to dissolve it. If you can't agree on that up front, then the partnership has little chance of success.


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## Flewster (Nov 3, 2003)

Since I was in a partnership with family that dissolved I will throw my 2 cents in the ring. DONT!!!! What started out as a way to share money starting out turned into a disaster. I started keeping bees and my FIL decided he wanted in too. To keep the peace I let him. I poured my heart and soul into the business wanting to grow to commercial size. I would take my own money and buy stuff for the business without taking money back out. To me it was an investment in my future and my kids future. He didn't want to spend money to grow like buying new queens and stuff like that. He opened up a Credit card in his name for the business and would buy stuff with out consulting me and then pay off the card with business money (which was alright) So finally after a few years of no growth due to he unwillingness to invest money where it needed to be and him always doing things with out even consulting his partner (me) I wanted to split but didn't know exactly how. Well his daughter decided that she was leaving me (divorce) so that pretty much set up the split. Well that did not go as it should have. Every thing he bought on that dang credit card and paid off with business money he decided was his since he bought it. Mind you profits from the business had already paid him back. So the extractor, uncapping equipment, bulk bottles, bottling tank and such he took. I never took a dime out of the business in the years we ran it always pulling money out of my pocket to buy things. In the end I got less than half the hives and that was it. there were some bitter fights and when I asked for a copy of the books (which his wife kept) they would not let me see them. Mind you when I got my tax forms we always showed a loss yet I know we made money. 

Now I have been on my own for a year now and I have doubled my hives, bought an extractor and uncapping equipment and I still show black on the books. Mind you my honey stick machine I manufacture and sell has been a money maker but that is part of my new business. So my advise is to NOT go into business with family unless it is all spelled out in a contract in advance. Everything from who treats hives, how and when you buy replacement queens. It should spell out every detail including how to devolve the business when one of you wants out (and you will if they are anything like mine was).

Just my two cents.


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## Keith Jarrett (Dec 10, 2006)

Flewster, sad but true.


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## Barry Digman (May 21, 2003)

Don't partner with family, period.


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## EastSideBuzz (Apr 12, 2009)

Flewster said:


> DONT!!!! Just my two cents.


 If dont is not a good answer to you go with #2. But, dont is a good solution.


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## sjvbee (Dec 27, 2006)

I'm currently building a partnership with my son. First thing we did was decided how he would join the second thing we decided was how we could leave each other


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## Michael Bush (Aug 2, 2002)

Here are the issues that typically come up. What if one of you works 80 hours a week at it and the other only works 20 hours a week? What if one invests more money in the business up front? It may get slightly complicated, but if you keep records on how much money and how much time each invests, and have it spelled out what each is worth then you can adjust the share of the profits accordingly without getting into constant disagreements on who is working more etc.


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## Eduardo Gomes (Nov 10, 2014)

I want to thank all of you who so kindly gave me your opinion.


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## Ian (Jan 16, 2003)

Eduardo Gomes said:


> I liked to give me your opinion about the following: if a familair want to partner with our operating what model to follow?
> 
> For now I see two alternatives:
> 1 ) the hives are both and share everything;
> ...


Eduardo, as you can see so many beekeepers have experience. I'd listen to these comments and use that feedback to better prepare for family fall out issues.

I'm part of a family run farm, we have formalized the business into a corporation. I have tones of experience with managing a business with family. My advice to you right off the hop is don't establish this business as bringing in a family member, but establish it as bringing in a business partner. Partnerships have their place, I know lots of farms who operate their own land, sharing equipment and labour. Id keep your own bees under your belt, and set up an adequate honey facility. Hire a guy between the two of you, or hire two guys and run a four man team. So many advantages in splitting capital costs and common operating expenses. Adding volume to purchases and sales increases efficiency


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## Eduardo Gomes (Nov 10, 2014)

Ian said:


> My advice to you right off the hop is don't establish this business as bringing in a family member, but establish it as bringing in a business partner. Partnerships have their place, I know lots of farms who operate their own land, sharing equipment and labour. *Id keep your own bees under your belt*, and set up an adequate honey facility. Hire a guy between the two of you, or hire two guys and run a four man team. *So many advantages in splitting capital costs and common operating expenses*. Adding volume to purchases and sales increases efficiency


Thank you Ian. Are wise words that reassure me in this matter. This is likely to result. Based on all that you guys have said I'm better prepared and aware of what I must to do.


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## Ian (Jan 16, 2003)

Another tip, get a accountant and lawyer for the farm who has experience in farming related businesses. Pay a bit more to get set up adequately, and have the professionals handle your formal filings.
I make my accountant and lawyer earn their money.


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## Eduardo Gomes (Nov 10, 2014)

Ian said:


> get a accountant and lawyer


Yes of course, makes perfect sense . I already have an accountant now that will continue to help us in the future. I have a lawyer friend who can help us in the future to put black on white everything we needed.


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## Ian (Jan 16, 2003)

You will need an accountant and layer to write things up and file formally. These are meetings both of you attend


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