HI ALL! I just want to know if anyone can give some advise and the right questions for a financial/working partner in opening a pizzeria and what a fair cut would be for someone funding most of the cost and sharing most responsibilities with me. This is something I thought I would do myself, but having relocated from NY to FL recently, and needing a house for my family as well, I am very tempted to obtain a financial partner to do this sooner than later so as to prevent needing an employer. I just so happen to have a friend of the family who is relocating as well and has finances to do this. He and I both have experience in operating a family owned pizzeria in the 80’s. Any feedback would be greatly appreciated. P.S.; I CAN’T BELIEVE THE INFORMATION BEING SHARED ON THIS SITE, YOU’RE ALL GREAT PEOPLE! THANK YOU!
What will this other person be responsible for? Managing the store x amount of days? Handling office work?
There probably won’t even be a “cut” to share with this person for years to come… Unless your a pro and really know what your doing. Or I guess you could always get lucky.
I am meeting the person in the next two days to discuss the specifics of his responsibility. I will let you know. Does it seem feasable to succeed with a partner or should I just stick it out and do it myself eventually. I am not an expert, but I worked with my family’s pizzeria for 9 years (in the 80’s) on Long Island doing it all. I also feel I know what good pizza/food looks and tastes like. From what I see in some pizzerias, that is a huge advantage. Of course, atmosphere and customer care is just as crucial along with a hundred other things. I will post the details of the possible partners responsibilities as soon as I get them to get your input. Thanks you all in advance.
Guest,
So wait a minute. You’re saying you’re moving to Florida and opening a pizza place… You’re having someone else put up that cash, and ALSO have that person work in it? And YOU’RE going to get a cut?!!!
Ummm, that’s sounds a little too good to be true. Sounds like you not only found an investor but you found an investor to share responsibilities. My friend, that is about as rare an occasion as I’ve ever seen. If this guy gives you 50%, take it, try not to smile too big, and get the papers signed, sealed, and delivered as fast as you can because you’ve just hit the jackpot.
You’ve got to look at it from a reasonable perspective: Let’s say I’m Joe Invester. I move to Florida and decide, after a friend pushing me (you), to open up a pizzeria. I put up all the cash and I’m going to work it in a manager’s role. I would hire that friend and pay him well for helping me get started and doing all the legwork. I’d even pay him bonus checks every month if the store’s successful and he does a good job. But give him a cut? For what? What investment does he have besides sweat equity (which I’ll be putting in every bit as him)?
So, looking at it from the two different views… if you get anything at all as far as a cut is concerned… take it and run baby! Because you’ve just gotten into the business for free! Hope this helps. -J_r0kk
Oh, it helps alright. Thanks.
Whatever you do, get a contract that spells out the responsibilities, % ownership, and how the profits are handled. If you plan to draw a salary, make sure that’s in there.
Guest,
Run, the other way, as fast as you can.
I have seen many partnerships, almost all I know of, fail miserably, dramatically, fantastically. And then I got into one myself… Ouch. I almost lost everything. My home, my store, everything. My partner cheated the tax man, and I had to pay for it.
If you still decide to do it, hire a lawyer for YOURSELF. Expect to spend $5k+ on a good lawyer. Have a partnership agreement that clearly defines EVERYTHING including an easy escape for you, and workable buy out agreement.
Here are pitfalls to many partnerships…
He provides money, he expects a return
You provide labor you expect a “wage”
You work 6 days a week
He works 5
You start to get angry because he isn’t sharing the load
You want to put 5 ounces of cheese on
he thinks it should be 7
Who decides? the other will almost always resent it.
The employees like you,
he is a jerk,
you both resent the other, he because you are “soft” you because he interferes.
You work hard watching the numbers
he goes out and spend $20k on a new delivery vehicle
You get angry because he wastes “your” or the company’s money
A partnership is like being married, except you don’t have the love to go with it, and it can be a lot more expensive to get divorced.
If you STILL want to do it, don’t be partners. Let him own and control it, it’s his money. You negotiate a “wage”. A guaranteed salary, and THEN let him give you 50% of the profits as a stake in the ownership. You get all the benefits with none of the liability. He gets to keep control of his investment. You avoid conflict in the future. And have an employment contract that defines it all, and what you get if you ever part ways. Negotiate a fair price for the shop BEFORE it ever opens and make it a part of the contract that you can buy the business at a predetermined price, or formula, and/or that if he ever decides to sell, that you have a right of first refusal.
NO MATTER WHAT… TALK TO A LAWYER FIRST!!!