Acquiring Minds Perils in Partnership: Plumbing Acquisition Gone Wrong
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Dec 19, 2024 Josh Key, a former plumbing business owner from Dallas-Fort Worth, shares his turbulent partnership journey. He reveals the pitfalls of inadequate due diligence when partnering with a master plumber and the chaos that ensued when his partner's wife became involved. The breakdown of trust led to clients and employees leaving, and ultimately, Josh had to close the business and file for bankruptcy. His story is infused with lessons about the importance of verifying partners and maintaining emotional control in business, guided by his faith.
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50/50 Partnership
- Josh Key offered a 60/40 split to his potential partner, but the partner insisted on 50/50.
- Key accepted, prioritizing the upside potential and the partner's plumbing license.
Diligence a Partner
- Conduct thorough due diligence on potential business partners, including background checks.
- Consider potential negative outcomes and exit strategies beforehand.
Importance of Operating Agreements
- Create a strong operating agreement, especially when partnering, addressing potential disagreements and exit strategies.
- A good attorney will facilitate uncomfortable but crucial conversations about worst-case scenarios.
