Someone wants to invest money in my company to startup carpet cleaning business?


6

So I own a Commercial & Residential cleaning service. So far my company is pretty small and our work load is not tremendous right now. I do a lot of move in and move out cleaning and often times I get asked can I clean carpets. This brings me to my question.

I found a carpet steamer and van for $5,000 but I don't have the funds to buy it. My partner want's to invest the $5,000 to buy the equipment and he would get a percentage of the carpet cleaning jobs. How do I figure this out. I want it to be a good investment for him and myself so that everyone is happy. If anyone has ideas I would appreciate it. I have never had anyone invest in my company so I have no idea what to do. All I know is I am missing a lot of jobs by not having this machine.

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asked Sep 19 '12 at 18:58
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Stuart
31 points

2 Answers


2

I would think that applying divide and conquer principle would benefit you greatly.

Namely. Form a separate company with your partner that will specialize in carpet cleaning. Once done you can look at this forum on the subject of fair division of equity and profit.

So basically what will happen is your clients will hire you to do the cleaning and you will "subcontract" the carpet cleaning work to the company you have with your partner, etc.

The paperwork becomes somewhat of a headache but the profit/equity division should become simpler.

answered Sep 19 '12 at 22:51
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Karlson
1,779 points
  • I like this suggestion. Keeps things simple and isolates the two businesses incase if anything goes wrong in one, the other is protected! +1 – Saurabhj 11 years ago

1

Is this partner currently an employee of your business? It sounds like he is. If so, you may consider it more like a loan. He loans $5K to get the company started in the carpet cleaning business and you pay him (x+y)% of the profits. x would be an accelerated payment schedule on the $5K and y would be ongoing profit sharing. Once the $5K is paid in full, remove x from the equation. Then it is fair to both parties. You get to expand and he gets to share in the profits of the venture, but get it paid off ASAP. If business goes sour between the two of you, it is hard to fire someone you owe money, if you ever need to that is.

You could even put an EOL on the profit sharing if you wish. I know this person would be helping you out, but you could always just go borrow the money if necessary and then you would not be essentially paying interest on this for the rest of your life. That is really what we are talking about here, interest on a debt. Unless you are willing to bring him fully onboard with the whole business.

answered Sep 20 '12 at 02:15
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Need A Geek Indy
562 points

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