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    Evergreen's Avatar
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    Impartial career change advice needed

    Here's the short version; Today I was given an opportunity to become a 50/50 partner in an auto repair shop. My dream has always been to have my own shop, but now that I have the chance I'm not sure about leaving the security of a steady job. I'm looking for advice on this situation because I know a lot of you have been in my position before.

    The long version; I have a steady job working at the welding shop in town building utility trailers. The pay isn't too amazing, but the work is easy and my employers are really good people. My wife has a stable corporate job and is our "primary bread winner" which has allowed me the flexibility to pick a job that I enjoy at the expense of making more money doing something else. Today a friend of mine whom I have done some work on the side with before came to me today with an interesting proposition: go into business with him and open our own repair shop. He has been working in this field for a while and built up a really impressive list of contacts. He has a business model drawn up and it looks pretty good. Between the two of us, we have all the tools and knowledge we should need. The only thing we are lacking is the shop itself, but there are a few old garages in the area for lease. My dream has always been to have my own shop, but leaving the security of a steady job is intimidating to say the least. However, I'm not yet 30 and I have no children or mortgage to worry about so there really isn't anything holding me back.

    What are some pro's and con's of this sort of thing that I am missing?
    Words of both caution and encouragement are welcome.
    Thanks in advance for your insight!
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    I did it at age 46,,, it was the best move of my life.
    The absolute,, NUMBER ONE rule I can tell you that you must follow,,,
    NEVER have a partner!!
    Do it yourself, or do not do it.
    Everyone is your friend,,, unless there is on the table.

    When you are ready,,, the other rule to follow is the Paypal co-founders concept.

    Zero to One,,, start a business that does not exist, be the only ONE in that business.
    that is the only way to make money.

    If there are 50 car repair shops in the neighborhood,,, why should a customer come to you?
    If they do come to you, 49 other guys will reduce their price, so they can put shoes on THEIR baby.

    Offer a new concept,,, or stay working for "The Man",,,
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    dd57chevy's Avatar
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    I'd agree with CADplans , the partner route is fraught with potential problems . The question that pops into my mind is : why doesn't your friend start his own business ?
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    Here are a few thoughts to consider:
    1. I don't know about having a partner, I consulted for a few years, so it was just me. But a partner, if the right partner, can be a good thing.
    2. Get your agreements in writing, put down EVERYTHING, get it notarized. You never know when you'll need to fall back on the original agreement, and it can be updated whenever necessary. If you ever have to say "you remember when you promised to do this or that..." to your partner, and he doesn't remember ever saying it, it can ruin the partnership. Think of this like a prenup, but I don't think this is optional in a business relationship.
    3. Look at your capital, have enough AFTER business starting and running expenses to sustain yourself and family for at least 1 year. This may include contingency plans if you don't have the cash in the bank. When I took a business course, new businesses usually don't have positive income for at least a few months. If you do go into the black sooner, then all will be good, if not, and you don't have capital to live, the business will fail because you will have to find other income.
    4. Here is an opportunity to do "what you always wanted", I'd say go for it, but be prepared before you start the business, and have a contingency plan in case of failure ... just in case.
    5. Think it through, don't rush into it.
    6. Your own business is hard work, and can be lots of hours, especially in the beginning. If it were easy, then everyone would be doing it. Don't let your business ruin your family life.

    Just a few of my 2 cents. I'll post more if something comes to mind. Good Luck on whatever you decide.
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    Tom

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    A question for you to ponder - Will you ever look back on this opportunity and say "I wish I had...."

    While I don't start things thinking about failure, it is always a possibility. You are young and even if this hits the crapper, you still have a lot of bounce back. The flip side to that is you have the same energy to make this dream come true. If you choose to do it, put your energy there and let failure be someone else's worry.

    To me it is like classic investment advice - young = aggressive, old = conservative.

    Only you can judge the integrity of your partner. I would agree with putting it in writing as suggested.

    You never know how far you can go unless you dare to try.

    After giving it a good hard look and it seems right and if your gut is telling you to do this then I would say go for it and never look back.
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    "The only ship that won't sail is a partnership."

    I'll echo the others, I don't do partnerships. Period. While they work okay when everything works, when things go wrong they really go wrong. You're not just partnering with your buddy, but with his spouse, his kids, his bill collectors, etc. When one of you leaves the partnership, and you will, what happens? And how do I know someone will leave? As Hank Williams said, "Though I may struggle and strive, I'll never get out of this world alive." While it's a bit dramatic, he could be in an auto accident and killed. Now you own a business with his spouse, or whomever he left his share to in the will. What if he gets arrested and goes to jail? What if he gets sued and the plaintiff gets all his assets? Now you have no idea who you're in business with. What if he becomes disabled and can't work anymore? While it's easy to sit back and say "That won't happen to us", it happens to people every day. We don't have to be so dramatic though, say 5 years from now he gets tired of being a mechanic, or your wife gets offered a salary doubling position of a lifetime...three states away. There needs to be an extremely clear, written plan for how to dissolve the partnership in the event of every awful thing you can imagine, and even then you need to be prepared for trouble when that day comes.

    As Cad mentioned, why does he need a partner? Sounds as though he has the tools and contacts, so does he need you for funding or just think it would be fun to own a shop with his friend? If it's funding, do you have it or would you have to go into debt for it? I think they say something like 90% of small businesses fail, so there's no chance I would borrow money for such a thing. Having a 'pretty good' business plan is a start, but I'm not about to put all my eggs in someone else's 'pretty good' basket. Most small businesses that fail are because the owner may be really great at doing the work whether it's fixing cars or programming computers, but because they're not very good at or have any business education. If he has this idea, let him get it all set up and hire you as shop manager or something. That way if it tanks, you haven't lost a big pile of money on someone else's dream. You want to own your own shop, then you go own your own shop. Work out of your garage until you build a customer base on nights and weekends, then maybe expand into a mobile guy working out of a van or into a small shop that you rent/ lease/ whatever and build it slowly.

    As for the idea of leaving a 'secure' job...you're not. You don't have a 'secure' job, none of us do. Every bad situation I mentioned in the paragraph about partners could happen to the folks that own the company you work for. You could show up tomorrow and find the doors locked. A big customer could switch suppliers or go out of business themselves. Folks who work for big companies are at risk as well, departments downsize and even corporations can close. Anyone apply to Enron lately? I watched businesses that were customers of my employer in TN close one after the other back around 2008, and am seeing it again here with the downturn in the energy industry. Halliburton, a huge oil company has laid off something like 50% of their workforce in this area. The only stable/ steady/ secure job is your ability to go earn an income. We're all self employed, but a lot of us only have one customer we sell our time to. We call them 'full time employers'. The more customers you have, the less you're impacted if one stops using you for whatever reason. Working for yourself with 6 or 7 different people bringing you their car every day is actually more secure than what you're doing now, it just doesn't seem like it because it isn't wrapped up all pretty. You get to see the side that your boss sees now.

    All that said, if you want to go work for him after he gets things set up then go for it. If you want to own your own deal, then go for that.

    Short version? I don't do partnerships or borrow money. I wouldn't touch the deal as it's described, but if there were a few tweaks where you weren't financially in bed with this guy then it might be worth a shot.
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    Quote Originally Posted by Evergreen View Post
    My dream has always been to have my own shop, but leaving the security of a steady job is intimidating to say the least. However, I'm not yet 30 and I have no children or mortgage to worry about so there really isn't anything holding me back.
    You will probably never be in a BETTER position to absorb the risk than you are right now. If it fails it is likely to do so fairly quickly (within the first 3 years). So what are you out if that happens? At 33-34 you can find another job. Try that at 53-54 (or 63-64) and you'll likely find yourself out of luck. This is something you've always wanted to do and there may not be another opportunity. There will ALWAYS be "something" that you'll have as an excuse not to do it down the road.

    Get yourself a good lawyer and make sure your bases are covered just in case there is a falling out. Then, go for it!
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    Lots of good advice, but one more thought.

    Don't burn your bridges, you never know when you'll need to cross it again.

    And the old but true saying, "you'll never get rich working for someone else". Follow your dream, but do it right and think it through.

    There are some free services for starting small business. One that comes to mind is the Small Business Administration (www.sbs.gov). They can be a lot of help for a newcomer. IIRC they have a lot of volunteer businessmen who may have gone through what your thinking of doing. They can give you a lot of real world experience and knowledge.

    2 cents.
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    Tom

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    Evergreen's Avatar
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    Lots of good advice so far. "consult with lawyer" is now at the top of my to-do list.

    I particularly like the point that was made that no job is actually secure. Way too true. I have overheard my current employer's discussing the future of the company and lately it has taken a bit of a sour note. From what I can gather, their main customer (who buys 750 to 1000 trailers a year) might be looking elsewhere. That will be more than 60% of their sales volume gone... So why would they need me anymore? Much like the rest of the country, the manufacturing sector in this area is a roller coaster.

    My potential partner needs me because we have known each other for a long time and he knows that I'm both driven and a good mechanic. He wants to expand beyond working out of a garage in a one-horse town and that means having a second set of hands. He is a pretty good painter and upholsterer, but he needs someone who can weld and do fiberglass. I also have the all important mechanics certificate from the state which will give the whole place some legitimacy. The idea of a partnership vs him hiring me was actually mine. If I'm going to roll the dice on this one, not only do I want some skin in the game, I want to be able to have some control as well. I have been self-employed before, but never anything more than seasonal work and never as my primary job. However, each time I tried it, I was fairly successful.

    Not to divulge our whole idea onto the Internet, but here is the basic plan: We would be the only customization shop in at least a tri-county area as well as the only shop within a two hour radius which specializes in working on European cars (Audi and VW primarily).

    Again, thanks for your insights!
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    '85 F150... I finally sold my very first truck after racking up over half-a-million miles on the original drivetrain.

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    The toughest ship to sail is a partnership, but they do sail if the navigators are committed and the voyage is well charted.
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