How many partners?

BlackEdelweiss

How much would my business need to turnover financially in order to sustain 3 partners?
For the business I am trying to start up I need people with certain skills, each of my two potential partners has one of these skills and I have the other and between us we could do a brilliant job of running the business, I also know we could work well together as we have done in the past, that is why I want to choose these 2 people as my partners.
I just dont know if the numbers will add up paying these 3 salaries unless the business really thrives. I dont want to sound negative, I am just being realistic that my vision may not work out exactly as I hope.
The other point is that if I only go with 1 other partner, not only will I loose out on one of the skill sets that I feel are necessary I will also have to hire someone to man the shop floor to fill in for one of the necessary tasks of the job so I will end up having to pay a slightly smaller wage anyway and not have as much help with the business.

antoinolachtnai

Yup, the business you have planned is a 'system'. You have to have all the bits. It won't work with two-thirds of the bits.

This is not the answer you will want to hear, but it might turn out that you need a fourth and fifth person to cover or enhance marketing and sales to get enough turnover and gross profit to make the whole thing work. Once you reach that size, you could well be talking about a sixth person to handle the admin overhead of the whole thing.

Are you sure you really want these people as full equal partners? It might work better if there is one leading person.

Welcome to business planning, it is good that you are dealing with these issues before you actually open the business.

DubTony

Partnerships are fraught with complications. When you throw a third person into the mix it can make things much worse.

I think you'd need to get your business up and running before the three of you could realistically take a decent salary each. How much that could be is margin specific. Your average grocery store gets somewhere between 22% and 28% gross profit, with wages being held (ideally) at around 10%. So in that business you could pretty much rule out a three way partnership unless turnover was absolutely huge.

How much you'll need to generate monthly all depends on what business you're in and how much you make.

bon ami

Partners are for dancing! If you need different skill sets hire them. Many people avaialbel at present to work part time or full time and costs should be lower.

BlackEdelweiss

It is a bakery type business with the option to eat on site with a coffee/tea type business,(there is more to it, I'm just not getting into specifics). One partner is an expert baker, the other is an excellent kitchen manager/head chef and I will be the marketing/advertising brains behind it. We will all cover each others roles once we get into the swing of it and we will all man the front of house, that is why I would have to hire someone else aswell. I have budgeted €400 per week each as our wages with all profits going back to the company for the first year, after that I figured a 4 way split between the 3 of us and the business. That is way down the line, it may not even be feasible.
I could possibly just hire the baker but I would need to offer the other guy a good deal to get him to leave his job and security, maybe this would be better but I would have to pay him more instead.
The reason I want partners is because I want us all working towards the same goal and not them slaving to make me rich.

DubTony

BlackEdelweiss wrote: »

The reason I want partners is because I want us all working towards the same goal and not them slaving to make me rich.

Honourable, but if you hire other people to do these jobs, the reality is that you'll do the slaving. Opening, closing, alarm calls etc. Your employees will finish at finishing time and forget all about the place until they have to start again.

If you're initially looking at €1200 a week between 3 of you it's probably not a bad idea. It'll help keep costs down as you all work your backsides off to make it work. It's a very small wage though.

bigneacy

DubTony wrote: »

It's a very small wage though.

better than the dole...