Business Question, I'm new at this.

ganutenator · May 22, 2016

A friend of mine is willing to pay to get me set up to be a UL panel builder.

I am the electrician and programmer and am bringing all the work.

How should I set up the agreement or partnership.

Aka, what percentage of profit should he receive?

bright676 · May 22, 2016

I would would wait and see if any thing you make would be marketable.

Saturn_Europa1 · May 22, 2016

bright676 said:
I would would wait and see if any thing you make would be marketable.

And that my friend is what I would call an epic take down. Well done sir!

jstolaruk · May 22, 2016

If his role is only to provide seed capital, and doesn't plan to be an active partner, then agree on a interest rate for a line of credit. There is no reason to make him a partner if his role is not going to be continuous; I'd rather use credit cards than have a dead partner.

damica1 · May 22, 2016

Be very careful, for some reason, people with a little bit of money THINK differently then people who actually do work to make money.

ais · May 22, 2016

damica1 said:
Be very careful, for some reason, people with a little bit of money THINK differently then people who actually do work to make money.

By the same token people with the skills to do the work to make money oft times forget to take into account (pun intended) the importance of admin.

Steve Bailey · May 22, 2016

In principle I agree with jstolaruk with one big caveat.

If your friend's money is in the form of a loan, then you have to repay it whether or not the UL certification brings in any more business. Are you sure you are currently missing out on potential jobs due to your lack of UL certification? Are you sure you could handle the additional business if you had certification? By "additional business" I don't mean just the orders that come in for UL work. There may also be paperwork and costs involved in maintaining the certification once you get it.

These are just my initial thoughts, based on nothing more than speculation. I don't have any direct experience with UL certification.

TimWilborne · May 22, 2016

I agree with Steve. You really need to evaluate what business you are missing out on before you worry with any certifications. If you are only missing out on a little bit of business then you may be better off to let that business go and keep your overhead down while you are getting on your feet.

I talk to lots of people trying to start their own controls company and what I find usually find is they see the UL certification more as a way to boost customer confidence in them. Personally I think showing customers your dedication to building high quality systems and seeing them through to the finish will go much further than any certification.

ganutenator · May 22, 2016

Saturn_Europa1 said:
And that my friend is what I would call an epic take down. Well done sir!

I already have the customer.

I am the original programmer for the customer.

ganutenator · May 22, 2016

TWControls said:
I agree with Steve. You really need to evaluate what business you are missing out on before you worry with any certifications. If you are only missing out on a little bit of business then you may be better off to let that business go and keep your overhead down while you are getting on your feet.

I talk to lots of people trying to start their own controls company and what I find usually find is they see the UL certification more as a way to boost customer confidence in them. Personally I think showing customers your dedication to building high quality systems and seeing them through to the finish will go much further than any certification.

UL is a must.
Customer can't sell his equipment w/o.

Friend wants to be a part of the business.

One good thing is that he speaks multiple languages. And a shark of a business man. But the shark thingy could work against me in the beginning.

My post isn't about the if I should build a panel shop. The work is there, it's a no brainer.

ganutenator · May 22, 2016

just looking for tips

keithkyll · May 22, 2016

ganutenator said:
...But the shark thingy could work against me in the beginning...

You've hit the nail on the head, except it won't be at the beginning. It will be a few years later.
With almost all partnerships where one man is just the money man, the worker will seek ways to buy him out within five years. You always want 100% ownership and control.

I spoke with UL several years ago. At that time, it wasn't very much to go to their school and become certified. After that, I think someone comes out to check your shop. Then you'll have a certified UL508A shop, and put UL certification stickers on the panels yourself.

Keep your 100% ownership, and get a loan. It will be under $10K total.

If he's a good salesman, then hire him as a salesman. Give him a commission. He doesn't get to be part owner unless he's going to get his hands dirty. Otherwise, you will quickly become "his employee" as he starts calling the shots in order to protect his investment. Then, you will be looking for a way out.

Watch Shark Tank.

ganutenator · May 22, 2016

keithkyll said:
You've hit the nail on the head, except it won't be at the beginning. It will be a few years later.
With almost all partnerships where one man is just the money man, the worker will seek ways to buy him out within five years. You always want 100% ownership and control.

I spoke with UL several years ago. At that time, it wasn't very much to go to their school and become certified. After that, I think someone comes out to check your shop. Then you'll have a certified UL508A shop, and put UL certification stickers on the panels yourself.

Keep your 100% ownership, and get a loan. It will be under $10K total.

If he's a good salesman, then hire him as a salesman. Give him a commission. He doesn't get to be part owner unless he's going to get his hands dirty. Otherwise, you will quickly become "his employee" as he starts calling the shots in order to protect his investment. Then, you will be looking for a way out.

Watch Shark Tank.

WOW! Everything you said just feels right. This is exactly what I was after.
Thank you thank you thank you!

mm08822 · May 22, 2016

Are you already set up as a legal business? If yes, then you know your overhead costs and administrative workload. So the UL cert would be incremental and apparently your method to keep this customer. I would check with UL yourself and find out all of the requirements, cost, training, inspections, etc to get certified and stay certified. You may not need outside $ help for this. 100% ownership/control is not something to give up!!!

Business Question, I'm new at this.

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