The share to the partner for leads

[Basil]

Hi guys, we are a new flat windows tinting business, and we came across a windows installing company that proposes us to work as their contractors. What could be the conditions in such a partnership from your point of view?

 

For example, we could charge them 20% less then the market price, letting them earn this 20% share.

 

Does it seem reasonable?

What's your view on this issue?

 

Thank you

[TintDude]

In my experience, even in the best of circumstance, these kinds of partnerships always end in tears. 

[Basil]

3 hours ago, TintDude said:

In my experience, even in the best of circumstance, these kinds of partnerships always end in tears. 

That's interesting.  Why is that happening?

[TintDude]

Each side will eventually feel like they aren't getting their fair share. 

 

I'm lazy so I had chatgpt help me with this:

 

There are several reasons why individuals or businesses might choose to avoid entering into partnerships. While partnerships can have their benefits, they also come with potential drawbacks and challenges that might make them less appealing in certain situations. Here are some reasons to consider:

 

1. Shared Decision-Making: Partnerships involve joint decision-making, which can lead to conflicts and disagreements if partners have different visions, priorities, or ideas for the business. This shared decision-making process might slow down the decision-making process or result in compromises that don't align with your goals.

2. Liability and Risk: In a general partnership, partners are jointly and severally liable for the debts and obligations of the partnership. This means that if the partnership faces financial difficulties or legal issues, each partner can be held personally liable for the entire debt, not just their proportionate share.

3. Financial Disputes: Disagreements over financial matters, such as profit distribution, capital contributions, or investment decisions, can strain relationships and lead to conflicts between partners.

4. Exit Challenges: Exiting a partnership can be complex and may require legal processes, especially if there's no clear exit strategy outlined in the partnership agreement. Selling your stake or transferring ownership might involve hurdles that are not present in other business structures.

5. Differing Work Ethics and Contributions: Partners might have varying work ethics, commitment levels, and contributions to the business. If one partner feels that another partner is not carrying their fair share of the workload, it can lead to resentment and inequitable distributions of responsibility.

6. Loss of Autonomy: In partnerships, decisions often require consensus among partners. This can limit your ability to make quick decisions or implement changes without the approval of other partners.

7. Sharing Profits: While partnerships offer the advantage of shared resources and expertise, they also involve sharing profits with partners. If your business is highly successful, you'll need to divide the profits among all partners, potentially reducing your individual financial gains.

8. Unforeseen Changes: Life events such as retirement, disability, or the desire to pursue other opportunities can impact the partnership's stability. If a partner leaves unexpectedly, it can disrupt the business and require immediate adjustments.

9. Trust and Compatibility: Partnerships rely heavily on trust, open communication, and compatible working styles. If partners have conflicting values or differing approaches to business operations, it can lead to friction and hinder the partnership's success.

10. Complex Legal and Financial Structures: Partnerships often require legal agreements that outline the rights, responsibilities, and terms of the partnership. These agreements can be complex and costly to create, and they may need legal assistance to ensure all necessary aspects are covered.

[Basil]

1 hour ago, TintDude said:

Each side will eventually feel like they aren't getting their fair share. 

 

I'm lazy so I had chatgpt help me with this:

 

There are several reasons why individuals or businesses might choose to avoid entering into partnerships. While partnerships can have their benefits, they also come with potential drawbacks and challenges that might make them less appealing in certain situations. Here are some reasons to consider:

 

1. Shared Decision-Making: Partnerships involve joint decision-making, which can lead to conflicts and disagreements if partners have different visions, priorities, or ideas for the business. This shared decision-making process might slow down the decision-making process or result in compromises that don't align with your goals.

2. Liability and Risk: In a general partnership, partners are jointly and severally liable for the debts and obligations of the partnership. This means that if the partnership faces financial difficulties or legal issues, each partner can be held personally liable for the entire debt, not just their proportionate share.

3. Financial Disputes: Disagreements over financial matters, such as profit distribution, capital contributions, or investment decisions, can strain relationships and lead to conflicts between partners.

4. Exit Challenges: Exiting a partnership can be complex and may require legal processes, especially if there's no clear exit strategy outlined in the partnership agreement. Selling your stake or transferring ownership might involve hurdles that are not present in other business structures.

5. Differing Work Ethics and Contributions: Partners might have varying work ethics, commitment levels, and contributions to the business. If one partner feels that another partner is not carrying their fair share of the workload, it can lead to resentment and inequitable distributions of responsibility.

6. Loss of Autonomy: In partnerships, decisions often require consensus among partners. This can limit your ability to make quick decisions or implement changes without the approval of other partners.

7. Sharing Profits: While partnerships offer the advantage of shared resources and expertise, they also involve sharing profits with partners. If your business is highly successful, you'll need to divide the profits among all partners, potentially reducing your individual financial gains.

8. Unforeseen Changes: Life events such as retirement, disability, or the desire to pursue other opportunities can impact the partnership's stability. If a partner leaves unexpectedly, it can disrupt the business and require immediate adjustments.

9. Trust and Compatibility: Partnerships rely heavily on trust, open communication, and compatible working styles. If partners have conflicting values or differing approaches to business operations, it can lead to friction and hinder the partnership's success.

10. Complex Legal and Financial Structures: Partnerships often require legal agreements that outline the rights, responsibilities, and terms of the partnership. These agreements can be complex and costly to create, and they may need legal assistance to ensure all necessary aspects are covered.

Thanks. I agree that these issues exist. But what could be the answer to my question in terms of the practice? Or is it fully individual?

 

1 hour ago, TintDude said:

Each side will eventually feel like they aren't getting their fair share. 

 

I'm lazy so I had chatgpt help me with this:

 

There are several reasons why individuals or businesses might choose to avoid entering into partnerships. While partnerships can have their benefits, they also come with potential drawbacks and challenges that might make them less appealing in certain situations. Here are some reasons to consider:

 

1. Shared Decision-Making: Partnerships involve joint decision-making, which can lead to conflicts and disagreements if partners have different visions, priorities, or ideas for the business. This shared decision-making process might slow down the decision-making process or result in compromises that don't align with your goals.

2. Liability and Risk: In a general partnership, partners are jointly and severally liable for the debts and obligations of the partnership. This means that if the partnership faces financial difficulties or legal issues, each partner can be held personally liable for the entire debt, not just their proportionate share.

3. Financial Disputes: Disagreements over financial matters, such as profit distribution, capital contributions, or investment decisions, can strain relationships and lead to conflicts between partners.

4. Exit Challenges: Exiting a partnership can be complex and may require legal processes, especially if there's no clear exit strategy outlined in the partnership agreement. Selling your stake or transferring ownership might involve hurdles that are not present in other business structures.

5. Differing Work Ethics and Contributions: Partners might have varying work ethics, commitment levels, and contributions to the business. If one partner feels that another partner is not carrying their fair share of the workload, it can lead to resentment and inequitable distributions of responsibility.

6. Loss of Autonomy: In partnerships, decisions often require consensus among partners. This can limit your ability to make quick decisions or implement changes without the approval of other partners.

7. Sharing Profits: While partnerships offer the advantage of shared resources and expertise, they also involve sharing profits with partners. If your business is highly successful, you'll need to divide the profits among all partners, potentially reducing your individual financial gains.

8. Unforeseen Changes: Life events such as retirement, disability, or the desire to pursue other opportunities can impact the partnership's stability. If a partner leaves unexpectedly, it can disrupt the business and require immediate adjustments.

9. Trust and Compatibility: Partnerships rely heavily on trust, open communication, and compatible working styles. If partners have conflicting values or differing approaches to business operations, it can lead to friction and hinder the partnership's success.

10. Complex Legal and Financial Structures: Partnerships often require legal agreements that outline the rights, responsibilities, and terms of the partnership. These agreements can be complex and costly to create, and they may need legal assistance to ensure all necessary aspects are covered.

4 hours ago, TintDude said:

In my experience, even in the best of circumstance, these kinds of partnerships always end in tears. 

That's interesting.  Why is that happening?

[Tintguy1980]

I worked with anyone that touched windows for whatever reason; whether replacement, new install (construction), a broken pane replacement, or window cleaners. This was done ONLY on a referral basis with no $$ exchanging hands either direction; just pure refer to you and you refer to me.

As TD has shared, there are relationship traps when getting too cozy.

[Dano]

Working with a commission based resale agreement (1099) is the best case scenario if done as a subcontractor. An LLP would be the worst IMO.

 

I would let the other company give a rough estimate with a few limited films on new glass installs in frames that you are familiar with and send your own team to inspect the jobsite for variables, upsell and close the deal with a contract agreement written to you from the requester. At best I would pay out 15% for the referral after I received payment.

 

If this is for new residential glass the install company could bring you the frames for you to install film on at your warehouse or shop and get a larger discounted price for full payment at the time of service.

[LeadfootCJ7]

As said above.  They should want to refer to someone who does high quality work so it doesn't look bad on them.  Giving them a discount so they can charge the customer 100% (or maybe even more) seems like a bad idea.  Plus, what if they start offering the customer discounts and want you to take even less?  What if the customer is being difficult and doesn't like the film and this "partner" makes you redo it for free?  I wouldn't want to go down this road with anyone.  

[Basil]

On 8/17/2023 at 2:15 AM, Dano said:

Working with a commission based resale agreement (1099) is the best case scenario if done as a subcontractor. An LLP would be the worst IMO.

 

I would let the other company give a rough estimate with a few limited films on new glass installs in frames that you are familiar with and send your own team to inspect the jobsite for variables, upsell and close the deal with a contract agreement written to you from the requester. At best I would pay out 15% for the referral after I received payment.

 

If this is for new residential glass the install company could bring you the frames for you to install film on at your warehouse or shop and get a larger discounted price for full payment at the time of service.

Thank you

[Basil]

On 8/18/2023 at 12:36 PM, LeadfootCJ7 said:

As said above.  They should want to refer to someone who does high quality work so it doesn't look bad on them.  Giving them a discount so they can charge the customer 100% (or maybe even more) seems like a bad idea.  Plus, what if they start offering the customer discounts and want you to take even less?  What if the customer is being difficult and doesn't like the film and this "partner" makes you redo it for free?  I wouldn't want to go down this road with anyone.  

Thank you