Minority Small Business Ownership
minority small business ownership
how do you approach your business partners about changes in partnership stake to your advantage?
I am one of the founders of a small corporation and have a minority stake in it. My talents, input and ongoing contribution of effort and time have helped this company to become what it is. Now it requires more and more of my time (60-75 hours/wk) to run it and I spend more time than other owners. The company is profitable, but not to extent that it can pay market price for my time. As business changes I feel that my input grows more and more valuable while my ownership stake remains the same. How do I approach my partners with proposal to change ownership stake? Is this even appropriate? Stakes were negotiated initially, but they are no longer accurate as far as I am concerned.
Thanks in advance for your opinion.
Having been in this situation, you need to determine for yourself how much this is bothering you now and how much it will in the future. The imbalance can turn into a business threatening dilemma for all, however, right now you may be the only unhappy one. Two courses of action, one, be prepared to leave (as in start looking for another job and have one in hand) and then negotiate from a position of strength, in other words, be ready to leave. Two, give them a written proposal now with the revised deal structure and a time line to respond. If they do not respond, see plan 1. I would personally do both. If 2 doesn’t work, don’t “tip” your hand that you are pursuing another option, stay cool.
This may mean that your equity stake may not be worth much, however, it also may get you what you want.
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