Partnership Agreement (Local)
Welcome to this meeting of the minds. (Mega Partnership guidlines apply as well)
Did you bring a partner or are you anticipating one joining us from your surrounding locality?
Regardless, you are here because you think a partnership with your fellow dairyman will help you fulfill your forage needs or cut your cost of producing forage. Perhaps your financial institution has referred you to Pleasant Creek Hay. Perhaps you have heard of future intentions to combine partnerships into one cutting forage production costs moving South North, then North South to harvest haylage and corn silage.
I'm here to facilitate that arrangement! (Besides this venture, I'm also a Licensed Real Estate Salesperson in the State of NY.) As a realtor I never collect a commission until closing. AS YOUR AGENT FOR PLEASANT CREEK HAY/ YOUR CITY, I WON'T BE COLLECTING MY COMMISSION AT ALL, BUT DEFERRING IT TOWARD FUTURE INCOME. Your financial institution might call this Good Will and after a year or 2 of good earnings, our partnership might be worth far more than its equipment inventory and I will then collect my commission in the form of Good Will and future earnings!
Instead of taking a commission as income, I will be using it in exchange for you and your fellow partners (bank) required equity. I will be borrowing my 40-60% from your (OUR) bank!
YOU AND PERHAPS YOU ALONE ARE 100% FINANCING YOUR AREA PARTNERSHIP!
I BRING WITH ME NO ONE THAT BECAUSE, FOR ANY ONE OF A NUMBER OF REASONS, MIGHT WANT TO WITHDRAW THEIR FINANCIAL SUPPORT TERMINATING OUR PARTNERSHIP! With no financing required on my behalf your partnership isn't restricted in what it can accomplish by my finances!
NO ONE FOR WHICH I HAVE TO ANSWER TO, BUT YOU, MY PERSPECTIVE PARTNERS AND YOUR LENDERS!
1) For bringing you and your partner together and making the necessary purchases to operate your Pleasant Creek Hay/ (local city) partnership, I'm assuming 10% ownership, steep you might say, but rather than take an immediate 5% cash payment and letting you and your partner squabble over the everyday operations of your newly formed partnership, I'm investing the 10% back into the business. In fact this is 10% that I am borrowing from our LLC lender and you.
2a) UNDER THIS ARRAINGEMENT YOU AND YOUR PARTNER WILL NEVER HAVE TO BALE OR MOW AN ACRE OF HAY
For continuing to run your/our Pleasant Creek Hay/ (Local LLC) partnership within 75 miles of Albany, NY, I'm assuming an additional 50% ownership and 45% indebtedness, bringing you and your partners investment requirements to 40%. (30% if you are awaiting an additional partner.)
2b) UNDER THIS ARRAINGEMENT YOU AND YOUR PARTNER WILL ALMOST NEVER HAVE TO BALE OR MOW AN ACRE OF HAY, AS PLEASANT CREEK HAY.COM WILL BE HIRING THE BALER OPERATOR (FOREMAN)
For continuing to hire a baler operator for your/our Pleasant Creek Hay/ (Local LLC) partnership beyond 75 miles of Albany, NY Pleasant Creek Hay.com will be assuming an additional 50% ownership and indebtedness, bringing you and your partners investment requirements to 40%. (30% if you are awaiting an additional partner.) IN AN EMERGENCY, PRE-DETERMINED, YOU OR YOUR PARTNER MIGHT HAVE TO ASSUME THE RESPONSIBILTY OF FILLING SHORT TERM EMPLOYMENT REQUIREMENTS......BALING SOME HAY, MAYBE EVEN HIRING A NEW BALER OPERATOR!
2c) UNDER THIS ARRAINGEMENT YOU AND/OR YOUR PARTNER WILL HAVE THE RESPONSIBILITY OF HIRING, PERHAPS EVEN FILLING THE POSITION OF BALER OPERATOR (FOREMAN). A REQUIREMENT OF OUR VIRGINIA, NORTH CAROLINA AND LOW POPULATION PARTNERSHIPS AND AN OPTION FOR ALL!
FROM A MANAGEMENT STANDPOINT, WE EVEN THINK IT BEST IF 30-70% OF OUR BALER OPERATORS WERE HIRED BY YOU, OUR FARM OPERATOR PARTNERS
For continuing to act as referee, marketing arm and dispatch Pleasant Creek Hay.com will be assuming an additional 30% ownership and indebtedness, bringing you and your partners investment requirements to 60%. (40% if you are awaiting an additional partner.)
1) Number1: Let me repeat that Number 1: We have to have a good baler operator!
The compensation of the Baler operator. I budgeted $25/hr Gross, not including the use of the vital rake (truck). I think it would generally be a better idea to sub-contract this job, a percentage of $25/week for a 40 hour week and keep a rolling account of his hours worked, lets say 80% and pay our baler operator a healthy bonus of say 50% of the difference between his subcontracted salary and OUR retained holdings. Perhaps even presenting him with a small percentage of the business, making that a 1/3, 1/3, 1/3 split. The remaining 1/3-1/2 used to compensate our baler operator in the lean months if they occur, adding to his next years Overage. On our staff roster I've listed this sub contracted job for $20/ with the explanation the balance will be paid after December 1st!
2) I consider all of my partners as equal, each of us currently when working for Pleasant Creek Hay/(Your City) earning at the $35/rate.
Like myself, I would hazard to guess you have never single handedly baled a bale of hay, always relying on a staff of baler, mower, rake and tractor operators to harvest the crop. Like yourselves, it isn't my job to be out in the field everyday, instead, I'm here (at $35/ hour) to hire the baler operator and if necessary meet our banker. In the office, I receive no compensation relying on the sale of our services and hay to compensate me for my time. You've put up the money and through the sale of OUR services and products, you benefit and I make MORE THAN $35/HOUR! I a) grade, price and sell OUR hay, b) either dispatch or have a (paid) dispatcher telling our baler operator and his staff where we are going to go next and /or whether we are going to mow or stack hay on any given day. Always before any clients, I have the task of determining, if necessary, which of you (my Dairyman partners) we will harvest next. c) I write checks. d) Make sure all of the T's are crossed and I's dotted for us to take our partnerships to the bank or you and your accountant. e) I do the advertising and purchase standing hay. Above all I act as referee to assure fairness between partners and partnerships.
The office: Those items, including that of dispatch, secretarial, accounting, advertising and any other miscellaneous items that can be directly billed to Pleasant Creek Hay will be, the partnerships, billed, proportionately to their gross incomes.
Undetermined items shall be distributed 40% Pleasant Creek Hay, 40% Pleasant Creek Hay Equipment and 20% ArthurWelserRealty.com. Currently we are discounting 100 acre plus discounts at 10%, likewise partners receive a discount equal to the volume discount. Should the need for an accountant arise, each partnership shall be assessed proportionate to their gross income. I receive 0 compensation for items purchased from PleasantCreekHayEquipment.com above and beyond the purchase price plus any modifications performed. PleasantCreekHayEquipment.com receives the same leasing price as you do for any piece of equipment we have agreed to retain. (The same rate we have offerred PleasantCreekHayEquipment.com's European partners.)
Put it this way! You put up the money, I come up with the equipment (on your approval)!
We have a guest looking at one of our pieces of equipment on our turf and our partnership receives half of the commission earned by PleasantCreekHayEquipment.com!
I need a back up, a second in command! I might even need you and/or your dairyman partner to meet with your (our) local banker in my absence. In fact the partnership is part of you and your farms financial package. Generally, I won't be meeting with your banker, but will if I have to! If I'm curtailed or are incapacitated in some way, you or your dairyman partner (at $35/hour) may have to hire a new baler operator-foreman. If our foreman is severely short of help, you at $35/hour, a key staff member from your dairy at $25/hour or a new bee at $15/hour may have to fill in for the day while the baler-operator-foreman hires additional staff! (If we get behind! Someone else will be baling OUR Hay......Not Good!)
I am not penniless! I own motor cycle #1 and truck #1! Equipped with its (plow) lift, it awaits a rake! I am offering it and a cash account as operating capitol in the Saratoga Springs, Schenectady, Kingston, NY, Pittsfield, MA areas as part of the equity for a partnership in one of those areas.
The opportunity to be a sole operator locally pales vs forming multiple partnerships North Carolina to Maine.