Some tips to save yourself from disaster with 'business partners' as a domainer..

[Compassion]

Some people have to learn things the hard way, I am
certainly no exception to this proverb. I find myself chuckling out loud sometimes at how naive I once was, thinking that people are honest, people are fair and that people will pay their debts both business and personal.

I find the sign in my grandmother's kitchen rings true over and over again - "The more people I meet, the more I like dogs."

Signs that it's not going to work with your 'business
partner':


-When renewing domains, your partner never has the
ability to cover his half and is able to convince you he will pay eventually, but cannot currently.

-When looking through lots of domains for sale, your
partner expects you to pay for the entire lot and pay
you back over time while still sharing half of the
domains. (or better yet pay you back after something sells for xxxx)

-Your partner doesn't have a debit card or credit card (owes these companies), no paypal account, no bank account - basically he has no way to pay for his own domain names without depending on someone else's MC or Visa.

-When selling a co-owned domain for high xxx or xxxx amount, the share of your partner's profit already is spoken for to pay other bills.

-When selling a domain for high xxx or an xxxx amount,
the profit your partner made has to be paid to your for
previous debts accrued for things other than domain names over an extended period of time.

-Renewing domain names is always a last second chore,
rather than renew everything a year ahead, you must
scramble to renew domains right before they expire or after they already have expired as your 'partner' offers no money to pay for renewals that are co-owned.

-When out to dinner on your birthday at a fancy
restaurant, you find yourself paying for the $250 bill
with no help from your 'business partner', but at least he offers to relinquish his half of a not so great .net domain
name for his share of the check and for your birthday
present!

-Your partner plays poker for fun, definitely not an income, swears to be a good player, but when asked about the math of the game - simply does not understand it.

-Your partner offers a 50% share in a domain name for $80, you give him the $80 (despite already being owed much more) and then find out a few weeks later he didn't renew the domain name.

-You are eating dinner at a restaurant and when the bill
comes you find out that your 'business partner' has no
money and kindly asks for you to add his share to his
'tab.'

-When attempting to collect money owed to you which was promised at a certain time, your 'business partner' states "I had to pay rent, I had to pay my phone bill, sorry."

-The best domain name you own that has promise of a
massive sale three years in the future is grudgingly sold
for $5000 - primarily so your 'business partner' can pay
back debts to you and others aside from domain name
costs.

-Upon realizing the anchor your 'business partner' has
shackled around your ankles, you realize -maybe if I my
'business partner' didn't financially exhaust me for
so many years - I too could have been purchasing
lll.coms in the low xxxx range, buying one word .coms, even more importantly paying for renewals a year ahead rather than at the time of expiration.

-Your 'business partner' begs you for a loan, not a loan for domain names, but a pure loan. You tend to feel bad for people and have a hard time saying no. You make the terms up so that your 'business partner' has to pay just $250 per month minimum. You agree on the interest terms because your business partner was conscious enough to realize "hey you've given me interest-free loans for so many years, maybe I ought to compensate you now?" So you loan out several thousand dollars to your partner and alas...Not one minimum payment is made, not one idea to pay you back is presented EXCEPT of course for your partner to sell off his shares in domains you co-own to cover the cash you've already given him.



---------------------------------------------------------------
Granted we are living much rougher times than say 1999
(Avg US income is less now than 1999 + the Dollar has
been crippled - worth 60% less than 1999 vs. the Euro).
And yes, the system is designed to keep everyone in
debt, in prison, in the military to kill innocents - trapped in a system controlled by a dominant few -----until collectively we wake up to the truth. The powers that be have successfully created order out of chaos for so many years, driving fear into the masses that people cannot be trusted and that the state will save everyone from their inhumane nature to tend to steal, rape, kill and create war. This global crisis has been carefully planned by the elite - to keep the majority treading water from cradle to grave, however, this doesn't mean that one should crap all over their 'business partners' or their friends.




For a successful domain enterprise between more than one
person, some guidelines must be laid out which I have determined after not actually doing these.

Some terms to agree on which I failed to do so with my 'business partner'

-What % do we reinvest after each sale?
-How much is our annual budget for renewals?
-How much can we BOTH put into a shared account to cover costs? (An account ONLY for domain names)
-Should we treat this as an LLC or a hobby?
-Which domain name should we develop into our domain sales site?
-Create plan to acquire dropping domain names.
-Create a plan for revenue (parked, adsense)
-Create an exit strategy (Sell as a company, sell monthly, trade up and up and up until everything is worth one LL.com etc..)


On top of making these plans, ask yourself...


Is he stable enough that he won't need to use domain sales to pay off other bills before paying for domain name costs?

Is this person a con-artist or is this person honest?

Will this person always cover his share of work and costs without hassle?

Is this person capable of discerning great domain names from crap?




The bottom line:

If possible, do not have a business partner.

A collection of 10 - 20 people each putting up $1k+ into a pool seems to be a more reasonable outlet for domainers looking to have partners - because let's face it - is it not the point of partnering to collectively create more wealth for all parties?


So basically, instead of a business partner, what I got turned out to be more like a son I never asked for - or a kid brother who always needed help.


Trust yourself. Create a plan. Make sure your 'business partner' is trustable and create a plan together to verify it is possible.

 

[Len]

Wow sounds like you had a tough time there! That's why I'm a one man band...I don't want to be in your position.
P.S. Slightly off topic but relevant ..that's why I don't car pool either. :hehe:

 

[-REECE-]

I would only partner with someone with years of experience and a solid XX,XXX+ investment in domains other than what we're collectively investing. It might sound discriminatory against newer or less affluent domainers, but one really does need to protect themselves in this Internet Age.

Partnering with only well respected NPers (with a long history of positive transactions of high dollar value) is something I'd never compromise on. I've found 1 such person here and we're parternering on a large purchase at the moment.

Also, consider dealing with legitimate businesses. In my case, being that I'm an incorporated company, I'm much easier to sue than a regular citizen. If a person isn't willing to take the time to set themselves up legitimately as a business in the domain name industry, I'd be questioning how serious they're involved in this industry. Again, not everyone with domain businesses is legit and not everyone without one is not, but ethical business behavior does seem more likely from legitimate businesses who have a real world presence, a telephone number you can call in the event the need arises, etc.


I would never partner on cheap domains myself... The renewal fees are too much of a hassle. Purchasing a few $XXXX+ domains with a partner however can be a good way to both mitigate each of your own's individual risk involved in making the purchase and also allow you to purchase twice as many comparable domains, increasing your odds of making an enduser sale.

Having more people involved in the partership reduces the impact any partner can have should they not fulfill with their obligations, but at the same time, it increases the likelihood that someone (from the group) will not follow through with there obligations.

It's a tricky situation... When partnering in domain transactions, I like to be the person holding onto the domain name. That considerably reduces my risk in any partnership. Placing the domain in an LLC created exclusively for this purpose is also a recommended route, however it's still ever so easy to get scammed this way... Dealing with people that live nearby is recommended if at all possible. If the need arises, nothing is better than a personal conversation and nothing is better for keeping people honest imho than "I know where you live".

 

[Compassion]

I would only partner with someone with years of experience and a solid XX,XXX+ investment in domains other than what we're collectively investing. It might sound discriminatory against newer or less affluent domainers, but one really does need to protect themselves in this Internet Age.

Partnering with only well respected NPers (with a long history of positive transactions of high dollar value) is something I'd never compromise on. I've found 1 such person here and we're parternering on a large purchase at the moment.

Also, consider dealing with legitimate businesses. In my case, being that I'm an incorporated company, I'm much easier to sue than a regular citizen. If a person isn't willing to take the time to set themselves up legitimately as a business in the domain name industry, I'd be questioning how serious they're involved in this industry. Again, not everyone with domain businesses is legit and not everyone without one is not, but ethical business behavior does seem more likely from legitimate businesses who have a real world presence, a telephone number you can call in the event the need arises, etc.


I would never partner on cheap domains myself... The renewal fees are too much of a hassle. Purchasing a few $XXXX+ domains with a partner however can be a good way to both mitigate each of your own's individual risk involved in making the purchase and also allow you to purchase twice as many comparable domains, increasing your odds of making an enduser sale.

Having more people involved in the partership reduces the impact any partner can have should they not fulfill with their obligations, but at the same time, it increases the likelihood that someone (from the group) will not follow through with there obligations.

It's a tricky situation... When partnering in domain transactions, I like to be the person holding onto the domain name. That considerably reduces my risk in any partnership. Placing the domain in an LLC created exclusively for this purpose is also a recommended route, however it's still ever so easy to get scammed this way... Dealing with people that live nearby is recommended if at all possible. If the need arises, nothing is better than a personal conversation and nothing is better for keeping people honest imho than "I know where you live".

Being close in proximity was part of the problem (Living together during college years).


The plan is to invest in domain names alone, sort everything out and hopefully someday everything will even out.

:blink:

 

[npcomplete]

I have had two rules for many years:

1.) Don't do business with friends. That is the best way to lose both a friend and money. Keep it businesslike and professional... and always write a contract.

2.) Don't do business with family. My family is basically clueless about any of my investments, and I like it that way.

Of course you can always build friendships once you have a solid working business relationship, but going the other way is hard... and all rules have exceptions. Money is one of the fastest ways to spoil a relationship, whether it is friend or family.

 

[Dotmainer]

npcomplete, agree with you :tu:

 

[Compassion]

npcomplete I agree with you on the first one. It seems much better to say - design one site with a friend than to partner in the domain name business.

on the second - I think working with family is important, however, mine is clueless and has no desire to invest together, the only communication about making money together comes from me - I open up dialogue, but nothing becomes of it.

I have noticed in some cultures, (Mexican, Japanese, ....) money and investments are kept strictly within the family. It's doing this you know which allowed the Rothschilds to buy up Great Britain after the first world war for pennies on the dollar and so forth..


For the most part, I agree with the mantra - don't mix business and friendships - I learned the hard way.

However, would not a good friend not repeatedly use you over and over again no matter the orientation of activities? (pleasure, business, social, philanthropic, living space...)

 

[The Stealthy One]

Those are very good tips! I have gone so far as to bookmark this page. Thank you very much for those. +rep to you.