Thoughts on taking on a partner

[madmari]

I have a son-in law that would like to come on with me logging. He's in a minimal pay job, but has insurance and a steady check.
  He's a very good worker, trustworthy and skilled.
I've worked alone- just me, a saw and a skidder. I'd like to move up production, maybe get a tri-axle loader truck.
Has anyone taken this step- bringing on a partner, recently?
How do you handle the addition costs of health, disability insurance?

Any assistance would be greatly appreciated. I'd like to bring him on, but nervous about keeping him going.

[ely]

sound more like an employee than a partner. you will just have to justify his costs with what you are to gain from him,eitherway.

[lumberjack48]

This is one thing that run a lot of loggers out of business[ Workman's comp ] back in the 70's & 80's comp was .52 cents on a dollar.  This is the main reason i went to a husband & wife team, it got scary to hire anybody.
Back when i did hire, i had them work under a contract, [ example ] like a 100 cord contract, when that was full we'd renew it, they were liable for there own insurance , its still scary.
Ounce you hire him you have to move enough wood to pay his mortgage and ect, when you hire a person you do feel liable, i know i did.
Look at how much wood your pulling now, can you double that, can you sell enough wood, can you get enough stumpage, there's so many ifs, cans and dew's.
I would put him on part time and see how he works out, he should keep his steady job and work weekends for you or any days he has time.
When you hire a person you don't slept quit as good as you did.
I'm not trying to scare you, just don't put somebody on with out making sure it will work out, or your take home check will get smaller.

[g_man]

And a family member makes it twice as hard. Especially when things get rough. When I was in the residetial const business I worked alone. There was another guy like me. Each of us self employed with all our own tools . We often bid on jobs together or would work together on bigger jobs we got. It worked good for both of us.
I tried hiring a helper once and lost money on him but others manage to do it.

[Magicman]

Sometimes it works.  Most of the times, it does not.  It depends upon both of you individually as well as collectively.  5 or 10 years from now when the partnership or their marriage doesn't work out, where will you be.

There is an old saying about mixing family and money.  Be very careful.

[Autocar]

Ive tried partners a number of times but it seems that it never works out,I had three guys working for me once and called it contract labor but when it comes down to it you still can get into hot water. Lumberjack48 hit the nail on the head even though there contract labor you still feel responsible. I always told my wife [ well if someone gets hurt we will pay the bills till there back on there feet ] Then one day Iwas older and it hit me [ What if there hurt for a life time am I ready to pay the rest of my life ] Workmans Comp the average logger can't afford theres to much down time do to weather ect. And they still want there monthly payment. Just my two cents

[240b]

My rule is don't hire or work for family.  Second, two people will not cut twice the amount of wood one person will. Also, your equipment is going to be seeing a lot more work, ie... break downs.. need more wood lots too. not a good can of worms to open. It is however very helpful to have a friend to help you out with things which are difficult to do on your own.  stay small stay sane.   PS  does henry or wayne haul your wood?

[JDeere]

A lot of good points already made above but one key question is, are you taking on a partner or an employee? If he is a partner you do not have to provide workmens comp. If he is an employee you do. As far as making him a subcontrator (you don't provide workmens comp) there are very specific legal tests to satisfy the state and the IRS. In general: 1. He must provide you with a certificate of insurance. 2. He must provide his services to others and not exclusively to you. 3. He is his own boss and not subject to your total control. There are many people who will tell you can write a contract or simply agree he is a subcontractor and that works until you get audited or a very serious injury or death occurs. When a serious workplace injury occurs the facts will come out and if you are deemed an employer you could lose everything you have. As my insurance agent told me, " a workplace death costs about $350,000.00 a lifelong injury can cost millions." Good Luck with your decision!

[lumberjack48]

I thought i had insurance, after i got hurt we were reading it over, social service looked at it, a lawyer looked it over, no problem your covered that's what it looked like.

At the end of the day, everybody was cover, except the owner, will guess what i was the owner.

Guys, i didn't have dimes worth of insurance, here i set typing with one finger, the wife lays me down with a hoyer lift and gets me up the same way.
I get a $1000. a month and the government takes  $322. a month for a spend down.
I'm trying to live on $668. a month, I'm barely staying out of a nursing home.

The moral of this is , make sure you have some kind of insurance, you don't want to live like this.

[Maine372]

the best way ive seen it done is to have two seperate crews.

each man has his own machine, his own saws, his own everything. you work woodlots together, basically dividing the lot in half, you cut over there, i cut over here. you pile into seperate landings, you can use the same trucker, but each of you gets paid for what he cuts.

this way each man is responsible for his own. but you get all the benefits of working together; help with breakdowns, somone to check on you and help if you get hurt. you can teach him the ways of the business and mabey he can strike out on his own one day.

a couple guys like this cut for my father (it was steep ground, good to have another machine around to help put the other back on its wheels) and there was a write up of a father and son team in the northern logger this month.

[beenthere]

........... I'm barely staying out of a nursing home.

The moral of this is , make sure you have some kind of insurance, you don't want to live like this.

lumberjack48
You are a brave man. I certainly appreciate your willingness to share with us what has to be very tough to accept. Sure puts some of our aches and pains in perspective, and I thank you for that. Keep on keeping on.  8)

[WildDog]

I second that Beenthere

He's a very good worker, trustworthy and skilled

And he's maried to your daughter, thats got to be a great foundation for a partnership.

My family were/are in business together and it has worked well, I went my own way and wasn't involved but from the outside looking in I have seen a team that pushes themselves harder than if they were working for an employer, all pulled their weight, worked when sick, gone that extra mile with no compensation claims and kept the profits in the family. It can work. 

[Norm]

Ours is a family business too, two sons with my wife and I. WildDog sums up our situation pretty well. I work hard to show them the old man can still pull his weight and they work hard trying to show me the same. They both have other business' they run, Patty and I do also. It's not all a bed of roses but can work if you all try.

[madmari]

Thank you all for your input. I've analyzed the numbers and he would do better than where he is currently. Kid is a hell of a welder and a mechanical wizard.
  As said, he brings more to the table than most employees due to his role as a partner. He would share expenses as well as profits, giving him a stake to work forward. I'd like to have him take over- I'm 50 years old- probably better at lining up work in 10 years than slinging a saw.
  If I keep on alone I can expect to get the results I have been getting- which is fine, but by growing, he gets the opportunity to enter the business with some security. I have been blessed with good fortune and would like to pass that along.

  What about a truck? Be nice to be more independent- lining up trucking is a real time eater and not so dependable.

[Jeff]

Adding the log truck is what would be the scary part for me.  If you add the truck, you pretty much add the need of a 4th person. You can consider the truck the 3rd as it has all the needs of an employee and more. Someone has to run the truck, and that takes one of you out of the woods defeating your original concept of more production.   You should weigh the costs of contract hauling of the wood that you can potentially produce against the costs of owning a truck.  The life of a log truck aint easy. It might take the shed full of  spare tires staring back at you while the truck is in the garage partly tore down waiting for parts that you can't really afford after being towed there by a high dollar wrecker before you  realize, "I could have just hired somebody to do this cheaper"

I watched a lot of one and two man outfits with a skidder and a chainsaw grow. One expansion has a natural progression to the next. If the timing is right, and the stars align, one might make it. In many cases, the final result is an auction.  The guy with a chainsaw and skidder is in the mill office on friday to get his check so he can pay his mortgage, his truck payment, and take his wife out to dinner and leaves with a contented smile.  The others?  They usually head right for the bank to pay their interest to keep the bank from coming and getting his house and truck and hopefully a good wife will still take him out to dinner.

[Woodhauler]

I agree jeff! You should do one or the other, either cut wood or haul wood! If i had it to do over i would have stuck to cutting! How many 30 year old log trucks do you see out there? I see 30 year old skidders running every day! As for trucks if you get 10 years out of one you are pushing it!

[treefarmer87]

i hired 2 guys about a month and a half ago. we do really well. its good for me because they can fell and buck at the landing, while im dragging with the skidder or loading the truck.

[madmari]

I hate owing money and my business is owned now. Maybe I should be content and stay small. I do believe the partner will be good for everyone and he will get a shot at his dream.
  If it doesn't work, we'll both be glad we tried. If it is very successful, we'll grow.

You've convince me to leave the trucking to the pros.

[g_man]

It sounds to me like you both have alot going for you and you have thought it through. I wish you the best in your new family business.

[barbender]

I know one man shows around here that run a tandem axle truck with a rear mount loader, I think it is a slick set-up. The one fella  powers a slasher with his, and uses it to haul firewood and clean up landings, etc. The bulk of his wood is contract hauled. I think it is a slick way of operating, but you have to find a decent truck cheap enough that you can run it part time. I don't think you want to go full on into the trucking business.

[treefarmer87]

barbender, that does sound like a slick setup

[Maine372]

madmari do you still have that IH he can run to start with? that might help get things underway.

ive never seen two guys and one skidder produce effciently. the guy dropping trees gets way ahead. i put out wood cheaper by myself than i did with somone working with me. back to my previous post about two guys and to machines.

that way if one of you has a bad week the other doesnt suffer.

[madmari]

No, the IH has pulled her last tree. She has gone to the organ donor program. She was 43.
I considered getting another cheap machine. There are lots of options there- thought about a forwarder, which would deverisfy things somewhat.
Not in a big yank to expand, but it is nice to dream.

[lumberjack48]

the guy dropping trees gets way ahead

This is the mistake right there, the faller should never fall head of the skidder, the faller works with the machine drag for drag.
The faller plans every turn, if i was running 6 chokers, I'd fall 6 trees, if a tree was lining back I'd wait for the skidder to push it over, we backed in to them, then I'd grab the main line and start hooking, i could hook 6 up in 1 to 2 minutes  or faster.
Depending on the length of the skid, I'd make 4 to 6+ turns a hour.

I was working with a cable skidder back in 1966, up at International Falls.
Norman Warpula, [ 100 % Fin ] he had a little TJ gas job, he put out 1000 cords of 100" a month with a faller and a landing man.
What I'm trying to say is, 2 men can pull wood, but they have to work together and help each other, not just walk out in the woods, and say I'll see you at lunch time.

 I understand what your saying, the guys I had working for me did exactly what you are talking about. When Duane & I worked together there was no one that could produce the wood we did, and we worked drag for drag. His brother was an excellent faller (when he wanted to be) other wise he made a mess, just like the other guys did. I had one other guy that worked with the skidder and we could put out the wood also.[ This is Eunice, Duane's wife ]

[madmari]

I did have a faller on a couple jobs. He'd hang up 4-6 trees, sit on a stump and wait for me to finish bucking and return. Boy, did he make out. I'd set chokers while he limbed the trees I pushed down, then I'd grab my saw and help limb.
  That wasn't productive, obviously. 

[Ed_K]

Jeff is on mark,or you could do like my trucker,have two trucks.Drive one into the garage,pay the owner some $ and drive the other to the job haul some loads and start all over.Yesterday he switched twice.Clutch on the sterling and air drier on the old f9000.

[treefarmer87]

i agree with lumberjack48, i try to fall all my trees in the same direction, it is way easier skidding that way ;) you have to work together as a system.

[Ron Scott]

If you have a formed partnership, one thing that should be determined ahead of time is, will the partnership be legally disolved if one of the partners dies; or will your new partner then be your dead partners wife, father, mother, etc"?