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Old 06-14-2011
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Default Subcontracting with a friend
I've been running my VA practice for about a year and a half now and I have a friend who wanted to start one also. She worked a full time job and could not find the time to really get going on her own. She's now been laid off and wants to pursue her business again but she wants to partner with me. I was thinking we should start out in a sub agreement first. Any suggestions?

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Old 06-14-2011
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Default Re: Subcontracting with a friend
IMHO don't mix business with personal relationships as it never ends nicely.

If you really want to go ahead then you definitely need to get some sort of agreement in place...
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Old 06-15-2011
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Default Re: Subcontracting with a friend
Nikki,

I would think long and hard about this one. What is the benefit for you? You have already started your business and she has not. Desperate times call for desperate measures. Is she really up to running a business or is she just filling a void while unemployed?

I do not mix personal and business, never works out well for one party. If you do decide this route I would have a long conversation with her on what her role will be. Will she be bringing in clients or relying on you? Will she be contributing to the day-to-day operations? Who will be billing clients and accepting payments? This will certainly affect someones tax liabilities.

Once you get the details worked out then have a solid agreement in place to cover all that has been discussed. However, I get the impression that you are a tad hesitant with this arrangement and you should trust your gut.
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Old 06-15-2011
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Default Re: Subcontracting with a friend
Hi Nikki,

I would have to agree with Lee and Bridie. It does sound like you're hesitant and it may be for good reason. Partnership agreements are always tough in my opinion simply because they involve more than one person and all the differing thoughts and opinions and issues that accompany such an arrangement. Don't get me wrong, I think a partnership can be a wonderful thing but I also think it is a really tough thing to navigate in business and when it works, it can be phenomenal but when it fails, the fallout can be devastating especially when it involves friends or family.

In this case, you indicate you've had your VA business for about a year and a half and "have a friend who wanted to start one also. She worked a full time job and could not find the time to really get going on her own." So, what I get from this is you are where she is not. Perhaps it wasn't the right time for her to do this but usually when people really really want something badly enough, they find a way to do it.

"She's now been laid off and wants to pursue her business again but she wants to partner with me." Well, again that makes me question her motives. How convenient for her to hop into your business after you have done what is probably a substantial amount of work on your own and magically become a partner. And all because she doesn't have a job anymore. Ask yourself this? If she still had a job, would she be asking you this? Is her level of commitment to starting a business enough that she would quit her job to get her business started and give up that reliable source of income? What has she done for your business that would indicate she deserves a partnership in your business? Has she helped you so far, given you advice or sent you leads for clients? And the simple fact that she has even asked you to be a partner indicates to me that she has no appreciation of the amount of dedication it takes to start your own business. So, if she has no appreciation of how hard you've worked and how tough it might have been, then her perception of what she is asking of you is exactly what you don't need for your business.

I think your idea of subcontracting might be a good one, but I wouldn't be surprised if it doesn't work out. If she is the kind of person that expects to be handed on a plate what she is asking of you, then she won't be the kind of person that can handle being your subordinate.

I wish you the best of luck with whatever you decide is best for you and your business!
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Old 06-15-2011
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Default Re: Subcontracting with a friend
Nikki, it sounds like your friend wasn't prepared to put in the hard work to start on her own (and many people do it while working a full time job). Is she prepared to work hard in your business or does she just want to jump in and take advantage of the business, reputation and clientele you've built?

Trust your instincts. The nice way to get out of it and not lose the friendship is to merely say that you don't have enough work for a second person at the moment, and if you need to give a reason .. maybe lost a client or two ... sometimes a white lie is necessary.

Your friend's attitude suggests she may not be prepared to work and, worst case scenario, may attempt to steal your clients. Partnering up with friends or relatives usually leads to an unpleasant conclusion.

Lynne
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Old 06-15-2011
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Default Re: Subcontracting with a friend
Sub contracting is one thing, being a partner is another. It may be OK to have her do some work for you, but if you are partners, that is a whole different thing. Then both of you are making business decisions together. If it were me, I would be willing to share work, but not control.
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Old 06-15-2011
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Default Re: Subcontracting with a friend
I agree with a couple of the others. Can your current clientele sustain two pay checks? If it can't then just tell her that your business isn't capable of supplying two pay checks. I would tell her that you will subcontract to her when you need the help.

She should be able to see by looking at your business that it is possible to make it and that should give her something to aspire to.

It seems to me (and i've never partnered with anyone before) that when creating a partnership it needs to be equally beneficial to both parties. Whether your starting out together or partnering with another VA business there needs to be equality and a need for each others talents.
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Old 06-15-2011
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Default Re: Subcontracting with a friend
This situation comes up for so many of us. Thank you for bringing it up. Don't guilt yourself into doing something. You can share with her that it's too new for you let alone bringing someone else into the picture.
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Old 06-16-2011
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Default Re: Subcontracting with a friend
Wow ladies!

I really appreciate all the wisdom and insight you all have offered me. I think you all have valid points. I do want to give you another detail that might make a difference. I'm at a point in my business where I'm gettting more work than I have the time to complete by myself. So I am looking to grow my team. It seemed like my friend being laid off was perfect timing to give me the HELP the I need. You all were right in saying I'm hesitant to go into a partnership because I am. Subcontracting seemed like the smart thing to do and you all helped me see that I made the better choice.

So, I decided to subcontract and see how it goes. I had her sign a confidentiality agreement and put a non-compete clause in the subcontracting agreement. I also stipulated that this contract is for 6 months and is an evaluation of her abilities. We will review her progress at the end of six months and decide whether to extend the agreement.

I am a little worried she may not be ok with this, like Kate brought out, but if that is the case, then there will be no reason to continue the business relationship. I'll have to find someone else!
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Old 06-16-2011
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Default Re: Subcontracting with a friend
Hi Nikki,

It sounds like you've made a wise choice and covered all your bases with the confidentiality agreement and non-compete clause as well as looking ahead down the road to schedule a review. Awesome!

And you can always take advantage through an RFP of the many super-talented VAs right here at VAF looking for subcontracting opportunities if it doesn't work out with your friend.

All the best!
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