What happens when your business partner is the reason your company can’t get better financing?
We recently came across a growing trades company with two 50/50 owners and roughly $300,000 in debt. The business wasn’t falling apart.
But every time they tried to replace expensive financing with something better, one partner’s personal financial history kept getting in the way.
Frustrating, but manageable.
Until the company went after a large job that required bonding.
The bond was denied because of issues tied to that same partner.
Now we’re no longer just talking about an ugly payment schedule. One owner is affecting which jobs the company can actually pursue.
And that tends to make the partnership conversation a little more interesting.
In Part 1, we looked at what you should know before going 50/50 with somebody. Credit, debt, responsibilities, exit plans...all the romantic stuff. You can read it here.
But what if you’re already partners?
That’s what Part 2 is about.
And it starts with one fairly brutal question:
If you were starting the company today, knowing everything you know now, would you still choose the same partner? 👀
From there, we look at whether one owner has become a bottleneck, whether the underlying problem can actually be fixed, and when the ownership structure itself deserves a harder look.
Read Part 2 Here
Sometimes you need another lender.
Sometimes you need to fix something inside the business.
And sometimes you need to have a very uncomfortable beer with your business partner.
Too bad nobody puts that one in the startup pitch deck, right?
Talk soon,
Matt & Luigi
The Weekly is sponsored by Credit Banc.
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