Business partner help

[TXCowPuncher]

I'm in need of some input here. I have alway looked after someone else's cattle, but recently ran across a gentleman that is wanting to grow his herd. I went and looked at his place, long story short he wants to buy more cattle and possibly front the money to purchase me cattle of my own. We would be running both sets of cattle on the same place, so my question is, how do I go about presenting him with a proposal? How does a money backer work, how does it work when I'm taking care of his cattle on his place mixed with mine that he paid for? Trying to see if anyone has used a partner or backer?

 

[cowboy43]

Very complicated proposition, when a agreement is reached and to protect him and you a legal document needs to be drafted, because by the law of averages the partnership will dissolve.

 

[HDRider]

Look at it strictly as a business deal.

Ask yourself want he wants from you. What is that worth?

What do you want from him?

Each of you should write down your terms. List them either negotiable or nonnegotiable.

Take it to an attorney, your attorney and draw up an agreement that memorializes it in an enforceable manner. One of the best clauses is an "out for convenience", which spells out how you walk away at any moment, spelling out the split of assets, expenses and timing.

Good luck and let us know what you decide. Could be the best thing that ever happened to you or ......

 

[bigbull338]

i would walk away from that deal unless you are real good friends with him.then i would have to think about it long and hard.

 

[wacocowboy]

Sounds like a disaster waiting to happen.

 

[Jogeephus]

There is a lot of things that come into play here. Is he wanting to buy you cattle so you'll have skin in the game and maybe use that in lieu of pay for looking after the cattle? How much is he expecting you to work with the cattle and what about him? Is he going to charge you interest and expect you to pay him back with money or labor? To many questions.

Like some have said, partnerships typically don't work but they can. I've never been one to work for the company store nor have I been one to work FOR someone but I will work WITH them. That said, I've been in a partnership for over 20 years and have never had a minutes trouble but neither of us keeps score and we both just look at the big picture. I have controlling interest but never execised it and always get his input before making any major purchases. The good thing with having a partner is you can take time off if you need to and sometimes its just nice to have someone to help you with something.

 

[Bigfoot]

That sounds complicated beyond belief. I guess anything could work though. I have ran cattle with partners before. It always works best when one partner is silent. Sometimes I'm the silent one, and sometimes im not. Ran cows with an elderly neighbor when I was a kid. We both had input, and I guess in the end it worked out alright. We both got what we wanted. I wanted more heifers, and he wanted somebody to step and fetch. Never was real pleasant though.

 

[js1234]

depends on the people involved. not a guaranteed disaster like many say, though it certainly could be. i put up the money for a partnership with a guy who is younger than me and trying to grow in this business, it works fine. seems like partnerships are prevalent in the cattle business. my family has had partnerships that are still ongoing that started 50 years ago and have had a partnership or two that ended in court after one season. i can say that at least 5 to 1, partnerships that ran their course just fine are more common than the disasters people like to warn of, assuming you are a good judge of character and deal genuinely yourself.

 

[js1234]

oh, id be glad to share how my deal with that young guy i mentioned works. may be a bit different from your arrangement though as he has a longterm lease on a ranch that is owned by his wife's family that comprises the core of our partnership ground.

 

[TexasBred]

Only had one business partnership but it lasted over 15 years. I worked in the bank, partner owned a building material company. We build spec. houses and sold them. Only agreement was had was "you flick me and I kill you". Worked great. Finally dissolved it by mutual consent but never had one cross word or disagreement that I can remember.

 

[Ryder]

If you do this make sure you have an understanding about each and every detail of the business.
I would particularly be interested in how are the management decisions made. Who makes them.
How do you identify who owns what cattle.
What is the character/reputation of the other man? Is he trustworthy and easy to communicate with?
How will the partnership be dissolved, nothing lasts forever. How will the money be handled. Who writes the checks? Who keeps the books?
Little thing that are easy to overlook at the beginning can become major problems later.

 

[Dave]

If you are running his cows and your cows together I would make sure that they are both marked permanently and differently. That could be a brand or an ear mark. Ear tags can and have been switched but a brand or an ear notch is there to stay.