Employing verses Partnership
Discussion
Firstly just to say, my Husband has told me to come on here and ask you all your opinion of my business and what I should do next!
Brief outline:
I have been running a successful Dance and Drama school for over the past 4 years, and have now expanded in the few last years, and have just taken some-one one on, to help me with the demand. Before this, my Mum and Nan ran it, to which I have completely restarted , re branded and grown in every which way possible,to bring it bang, up to date! [www.ljs-schoolofdanceanddrama.co.uk - if your wondering!]
I have known her and performed with her since we were 2 yrs old. She's capable and willing to work. And were more like sisters, in relationship, but since she started I have been 'boss',she she's fine with direction etc.
Do I :
1: Keep her as an employee, and just pay her as and when she works, meaning the horrible ni, and holiday pay that I will incur.
OR:
Do I
2: Let her in on my business, obviously not 50/50, as i've done all the hard work, and slogging away for hours on end,not to mention the money ive invested .
I'm really stuck, as, I really want the business to grow. I would love some-one to be as passionate as me and want to grow it all around the UK, and with another person, maybe this could be done better, I could really do with some thoughts on this one.
Thank you!!
Louisa
Brief outline:
I have been running a successful Dance and Drama school for over the past 4 years, and have now expanded in the few last years, and have just taken some-one one on, to help me with the demand. Before this, my Mum and Nan ran it, to which I have completely restarted , re branded and grown in every which way possible,to bring it bang, up to date! [www.ljs-schoolofdanceanddrama.co.uk - if your wondering!]
I have known her and performed with her since we were 2 yrs old. She's capable and willing to work. And were more like sisters, in relationship, but since she started I have been 'boss',she she's fine with direction etc.
Do I :
1: Keep her as an employee, and just pay her as and when she works, meaning the horrible ni, and holiday pay that I will incur.
OR:
Do I
2: Let her in on my business, obviously not 50/50, as i've done all the hard work, and slogging away for hours on end,not to mention the money ive invested .
I'm really stuck, as, I really want the business to grow. I would love some-one to be as passionate as me and want to grow it all around the UK, and with another person, maybe this could be done better, I could really do with some thoughts on this one.
Thank you!!
Louisa
StJohn said:
Firstly just to say, my Husband has told me to come on here and ask you all your opinion of my business and what I should do next!
Brief outline:
I have been running a successful Dance and Drama school for over the past 4 years, and have now expanded in the few last years, and have just taken some-one one on, to help me with the demand. Before this, my Mum and Nan ran it, to which I have completely restarted , re branded and grown in every which way possible,to bring it bang, up to date! [www.ljs-schoolofdanceanddrama.co.uk - if your wondering!]
I have known her and performed with her since we were 2 yrs old. She's capable and willing to work. And were more like sisters, in relationship, but since she started I have been 'boss',she she's fine with direction etc.
Do I :
1: Keep her as an employee, and just pay her as and when she works, meaning the horrible ni, and holiday pay that I will incur.
OR:
Do I
2: Let her in on my business, obviously not 50/50, as i've done all the hard work, and slogging away for hours on end,not to mention the money ive invested .
I'm really stuck, as, I really want the business to grow. I would love some-one to be as passionate as me and want to grow it all around the UK, and with another person, maybe this could be done better, I could really do with some thoughts on this one.
Thank you!!
Louisa
Hmmm, interesting. I'm in a similar postion to you, albeit in a different industry, and have faced the same dilemma. 1 and 2 both have hteir temptations and their drawbacks, and which you will decide on will depend on which criteria you choose to apply.Brief outline:
I have been running a successful Dance and Drama school for over the past 4 years, and have now expanded in the few last years, and have just taken some-one one on, to help me with the demand. Before this, my Mum and Nan ran it, to which I have completely restarted , re branded and grown in every which way possible,to bring it bang, up to date! [www.ljs-schoolofdanceanddrama.co.uk - if your wondering!]
I have known her and performed with her since we were 2 yrs old. She's capable and willing to work. And were more like sisters, in relationship, but since she started I have been 'boss',she she's fine with direction etc.
Do I :
1: Keep her as an employee, and just pay her as and when she works, meaning the horrible ni, and holiday pay that I will incur.
OR:
Do I
2: Let her in on my business, obviously not 50/50, as i've done all the hard work, and slogging away for hours on end,not to mention the money ive invested .
I'm really stuck, as, I really want the business to grow. I would love some-one to be as passionate as me and want to grow it all around the UK, and with another person, maybe this could be done better, I could really do with some thoughts on this one.
Thank you!!
Louisa
On the face of it, I would suggest 1: If you want to retain control then the hassle of tax, NI, Employers' Liability and the other paperwork will be worth it. The only way I can see 2: working is if she buys a 50% share. You would have to value the business such as it is, and she would have to pay you half of that, but from then on would have a half share in the profits, losses and decisions. If she has less than half of the business, and doesn't pay anything for it, then that situation strikes me (and may well strike the authorities) as an employment with profit sharing.
Whatever you decide, once you and she have come to some kind of broad agreement you will need (if you go the partnership route) to get professional advice.
Something to bear in mind with partnership is that you will be liable for any debts she incurs through the business, either jointly on your own. As a partner she would have the power to make binding contracts on behalf of your business regardless of her share. Taking someone on as parter is a big decision and should not be taken lightly...but thats why you're on here I guess!
Perhaps an alternative to employee or partnership would be to make the dance school a franchise she could buy into, my understanding is that this is how a lot of the chains of dance schools are run. This way you could build the brand together, she would get paid as much profit as she can produce and you would get some income from the franchise agreement.
If you decide partnership is right decision for you, you should see a solicitor to discuss your needs. It shouldn't cost the earth and might help prevent ugly arguments with an old friend in the future
Perhaps an alternative to employee or partnership would be to make the dance school a franchise she could buy into, my understanding is that this is how a lot of the chains of dance schools are run. This way you could build the brand together, she would get paid as much profit as she can produce and you would get some income from the franchise agreement.
If you decide partnership is right decision for you, you should see a solicitor to discuss your needs. It shouldn't cost the earth and might help prevent ugly arguments with an old friend in the future
Edited by JimiGT on Tuesday 11th January 10:55
Thank you both for your replies
I had a thought of possibly employing her for a year or two, with the possibility [if in that yr she tries her hardest in each avenue she is asked to increase sales, and has made a big flow of income] to maybe then re-evaluate her position into coming into the business then.???
I did think of the franchise thing, but have no idea about what i could offer her, as I have set her up in schools, and venues. Sorry to be such a novice at this business lark!
I had a thought of possibly employing her for a year or two, with the possibility [if in that yr she tries her hardest in each avenue she is asked to increase sales, and has made a big flow of income] to maybe then re-evaluate her position into coming into the business then.???
I did think of the franchise thing, but have no idea about what i could offer her, as I have set her up in schools, and venues. Sorry to be such a novice at this business lark!
StJohn said:
Thank you both for your replies
I had a thought of possibly employing her for a year or two, with the possibility [if in that yr she tries her hardest in each avenue she is asked to increase sales, and has made a big flow of income] to maybe then re-evaluate her position into coming into the business then.???
When you are looking to provide motivation for an employee (or partner for that matter) I don't think there is much point in considering what they have done previously. You need to set up a system in which their future performance will be suitably rewarded. Personally I can't see how the partnership idea, in any form, will benefit you. If she is in a position to improve sales, then pay her an hourly rate and a worthwhile commission on sales. Straightforward, simple and no comebacks if it all goes wrong in the future.I had a thought of possibly employing her for a year or two, with the possibility [if in that yr she tries her hardest in each avenue she is asked to increase sales, and has made a big flow of income] to maybe then re-evaluate her position into coming into the business then.???
The only reason I considered having a partner was because actually employing someone in my line of work is made very difficult with government regulations of one sort or another, especially H&S issues.
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