Starting a Property Management Company Alone or With Someone Else

[Brian Mitchell]

Hello BP, I am looking to start my own PM firm here in Maine. I have secured a handyman that has expressed interest. He's capable, trustworthy, on time, and presents himself quite well. I have had a hard time finding a handyman that hits all the marks. I've built a pretty good network of other services. Because I want to create a long-term relationship with my maintenance/handyman person I want to make an enticing offer. This led me to the idea of creating a partnership, or giving a portion away. The company isn't set up yet, but I was thinking about offering up 10-25% of the company for him to handle all the maintenance calls (night and day) while I focus on the rest... hustling for new properties, networking, building up contacts for services, etc. My question is, do you feel this is the right move to create a long-lasting, secure situation? Any other suggestions outside of sharing the company? My goal is to grow the company to a decent size so laying things out appropriately now is crucial.

[Will Fraser]

Hi @Brian Mitchell!  In my personal view I would favor a strong bonus incentive structure (like the Game proposed in The Great Game of Business by Jack Stack) over "getting naked" with someone based on the fact that they do their job well (i.e. a handyman that simply checks the boxes of being a really good handyman).

That said, I'm only understanding your relationship from the words above.  If you feel like you have extreme unity with this person and this is a person you would choose to be a foxhole with and they just so happen to be a great handyman that you need for your PM business then that could be a killer arrangement.  Otherwise, save your equity and put together a great "game" for him to play that allows him to share the profits of the business (10-25% for instance), while not being an owner.

Good luck out there, Brian!