Dear Orchidians: This isn’t really a jewellery question, more a
business exploration. I am a goldsmith-gemmologist, and I have a
successful studio, in a building beside my home, in a small town.
Been here 9 years, 27 in the jewellery business in total. I work
alone except for an assistant who helps with office stuff 2
afternoons a week. My week can vary from a minimun of 40 hours to
the nightmare hours of Christmas. I work in gold, silver and
platinum, mostly gold. I do one-of-a-kind work, plus repairs,
appraisals, and I resell chain, wedding bands, etc. I’d like to do
some teaching, the space I have now won’t allow that. I’m lonely
working alone all these years. I’d like to work a little less. So a
silversmith I know, who also works at home, does a small wholesale
business, and I are starting to talk about joining forces, buying a
larger building. Neither of us has any idea what the potential
problems of joining these two businesses. I have a large clientele,
and currently gross about 10 times her gross income. How to join
those fairly? What questions to ask each other? to sort out before we
get going? What other forms of alliances have people used? Sharing
space, but having two separate businesses? I would be so grateful for
the experience of others in this matter, I am willing to learn from
the mistakes of others! Thank you for any input, Kim
I have been in business for a couple of decades now and I have seen
many partnerships come and go. It is very tricky to make one work.
In my opinion, you should explore all other possibilities first,
such as: Put the building up and rent to the other pary. This
way, you still retain control. The worst part of a partnership is
deciding control. Most independant business people really like
control but many are incompetent. What you are considering is
essencially an expansion of you business. Expansion of a business
is a very dangerous time. It is a time when many
small operators fail, so go carefully… Don.
Kim, speaking from experience, I would suggest you think very hard
before forming a partnership! Seems like we have some similarities:
I too am a goldsmith/gemologist, with 26 years as a custom
jeweler… Nine years ago I left where I was working to start a
business with a partner. We knew each other well, liked each other,
and respected each others’ talent. We did LOTS of planning: meetings
with our local Small Business Development Center (our taxpayer money
at work!), writing a comprehensive business plan, the works. Well, 1
1/2 years later I bought out the business (we’re still friends).
What they say about partnerships is true: it’s like a marriage.
You’ll probably spend more time with your partner than anyone else.
Your weaknesses will need to be offset by their strengths. And vice
versa. And you’ll need to learn to compromise after being used to
doing things your way 100% of the time as you do now. The fact that
your business is so much larger than hers brings up more issues (how
much say will you have in decision-making, how will you split the
profit, pay the bills, decide on your draw, etc…)
Another thought: is it accurate to say that the main reasons you
want a change are “I’m lonely working alone all these years. I’d
like to work a little less.”? Well, you may no longer be lonely, but
it’s possible you may decide in comparison that it wasn’t so bad
after all (the grass is always greener…). And the idea of working
less: it’s my experience that it’ll be the other way around. Life is
a lot simpler when you have a smaller business.
A partnership can turn out to be the best decision you ever made. It
can also end up being a “mistake” wheRe: 1) it turns out to be a big
drain on your time, energy and money, or 2) it became a learning
experience where you gained a lot of valuable knowledge.
Keep searching and asking those questions!
Cindy
Kim, speaking from experience, I would suggest you think very hard before forming a partnership!
Hi, Here is my 2 cents worth… I have my own company and had a good
friend who was very good and machine engraving,computers, cnc and
has been in the badge manufacturing business for 20 years as well as
ran his own polishing company for many years .
The company he was working for was in serious trouble and was about
to fold. We made an agreement to take over their equipment and their
manufacturing of the badges for them, But did not buy the company.
We retained the rites to use the equipment to manufacture our own
badges. My friend and I started a new business manufacturing badges
and other assorted stamped, high volume items. We made an agreement
that Racecar Jewelry Co. Inc would foot the financial end of the
move of the equipment and would take care of startup costs,
location, and general expenses as well as a salary for my friend.
Also, part of the agreement was that he would receive between 30 to
40 % of the shares of the new company once the company had payed
back the finances spent and was making a small profit. It has been a
little over a year and the company is nearly profitable without
having payed back the loans, But , this is good because the company
started with only 1 customer (not large) and we had no marketing,no
designs of our own ,no website and no sales… In 1 year, we have a
website nearly complete, A complete line of colar insignia for police
officers, firedept,military etc… A few new customers, CNC
capability for models and dies , an experienced head of our
polishing department. Our sales are increasing slowly. Our
capabilities are increasing and in general, by the end of the second
year, we should have an excellent company that makes badges and
other goods. My future partner in this venture is the one who really
worked his tail off to make this happen… I worked my tail off to
make sure that the finances ,equipment,location, expenses and my
mechanical abilities were used to their fullest extent.,… Both of us
did our fair share of work. We never argue, but we always discuss
our options on every thing that comes up and the final decision
always is reached by analyzing the projects as they come in,
deciding the financial neccesitites and if it will be profitable/ a
good bet/ or … in some cases, not worth doing. Picking a partner in
a business is always tricky, But, If you set it up so that you have
control over finances ( if your good at this) and you set up each
company as a seperate entity as we did, then if it does not work
out, your main business stays largely unaffected… if the partner
ship fails. Businesses fail for a large variety of reasons, partners
don’t agree on certain things and argue… this can be resolved by
putting all the thoughts and finaces of projects on paper while
discussing situations instead of being hard headed and argueing.
Having a decent fiancial and marketing stategy before the
partnership is formed is critical. Designating areas of
responsibility are important, but accepting the idea that sometimes
you may have to interchange certain responsibilities depending on
your areas of knowledge. Don’t guess at startup costs, material,
equipment, labor ,marketing, sales etc… put it down on paper and
accept the fact that we all make mistakes, so add another 30 % or
more…over what you assume to be your costs… You can always go
down in costs after running the business for a while, but, if you
have only allocated so much money to do a business /project and you
are under budget, the cash has to come from somewhere or your out !
Another good thought is to find someone that you respect for their
business knowledge and ask them for advice on all aspects of setting
up the business before actually doing so. Again, My 2 cents… Daniel
Grandi
We do casting, finishing, soldering, fusion, machine polish, hand
polish, cnc, model work, molds, in gold, silver, bronze, pewter for
designers, stores, and people in the trade. contact :
sales@racecarjewelry.com
I’ve heard that business partnerships last an average of 5 years
(maybe thi s is an urban myth, I can’t quote the source). Supposing
this is true- some partnerships last months- some last decades. I
think it’s imperative to kno w going into a new business situation
that at some point you or your partner may want out. Have agreements
about how things can be dissolved in a mutually beneficial manner-
so that you both know what to expect. I think you’d be nuts to start
a business without a written legal agreement (kind o f like a
prenuptual agreement) that incorporates all of this and much more.
Another, looser kind of partnership might be good for you. Sharing a
studio space. I’ve had a number of shared studio experiences (with 1-
5 studio partners) and mostly it was incredibly wonderful. It’s
important to have discussions about your expectations before hand-
stuff like: what equipment you are willing to share (and more
importantly- what don’t you want to share), whose name goes on the
lease, which expenses will be shared (and ho w they are divided up),
how you want the studio maintained. I preferred havin g a separate
phone line (I don’t want to have to take a lot of messages).
Security issues (I had one flakey studio partner who had a hard time
remembering to lock the door when she left for the day- aaargh!).
Another studio partner was delightful, but liked to have her friends
drop in almost daily and keep her company for hours while she worked
-this was distracting . On the positive side- I had incredibly
talented people around me- encouraging creative energy- lots of
laughs and people to brainstorm with, gain aesthetic insights from
and tools to share. I have a studio to myself these days- itB9s
easier for me to be focused . When I want company, friend s pop in to
use equipment or work here for the day (plus there are over 40
metalsmiths within a 2 mile radius- we get together often) .