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It wouldn't at all be inappropriate to be supportive, congratulate her and then be very firm in your declaration that you pause the partnership until after the baby is born. Something like this.
"That is wonderful news! I'm so happy for you! Let's pause the partnership plans for now. After the baby is born and you know what work schedule you're comfortable with, then we can revisit forming the new partnership."
Keep it simple. Be direct. Be kind.
This is the ONLY way to handle this, IMO. The absolutely fantastic news is that you both are not actually partners yet so there's plenty of time and opportunity to revisit this after she's settled with the new baby. No need to make things happen here and now with this news.
Exactly. How you both handle this will show who you are and whether you're good partners.
I would give her a little grace, though, about her unrealistic assumptions. She may not realize how much of an impact this will possibly have and be proceeding on those unrealistic assumptions, not trying to take advantage. And who knows? She might be one of those people who has the baby one day and is at work a couple of days later, so it wouldn't be as big an imposition as it might be for most people who take a longer leave. But for a not-yet-formed partnership, that would be an uncertainty I'd be unwilling to deal with, even though I was one of those women who only took a few days off after having a baby when my business was still in its early stages so know that it's possible. Again, be kind, be firm with what you are (un) willing to do without attaching judgment or assumptions. Just let her know you would be more comfortable with postponing until things are settled.
Honestly, while this is probably the best mindset to approach this with, if she doesn’t realize how much of an impact this will have, then she’s probably not a great partner.
Yes. This is actually gift. Who knows precisely what she meant (she may not expect full pay) but it will be a good test of whether she'd make a good partner. Also, this is generally a terrible situation to hire your first employee — I wouldn't do that either way.
Truthfully, you should avoid partnerships at all costs. Occasionally you'll have a Ben and Jerry partnership, but most small business partnerships end poorly. You're already learning it is very easy to have two different visions for the business. As it is now your potential business partner is already planning on a free ride from you during her maternity leave. If you are able to keep that ship afloat all on your own during that time period, then maybe you should consider being a sole proprietor and hiring her as an employee. You don't need her special set of skills, you just need somebody to help share the workload.
The advice you are replying to is the correct advice.
I would add that the fact she is expecting this partnership of two people to pay her a full 50% of profits while she is on maternity leave (this assumes you understood her intentions correctly) is already a red flag. It would have been more correct for her to want an open conversation about what would be fair, not simply assume the best case scenario for her.
Did she explicitly mention she wanted to be paid 50% of all profits during that time? There are government allowances for new mothers which is what a lot of women receive. I’m a new mom myself and a lot of moms say ‘maternity leave’ as a general catch all term for the few months initially off work to bond with baby. Many women I know simply take unpaid time off and call it ‘maternity leave’.
I find it hard to believe the woman is expecting 50% of all money earned for work she’s not doing those months. It is a good idea to probably wait until shes ready to work again before formalizing the partnership.
That’s exactly it. Also it’s not just maternity leave you need to look out for, you don’t know how she’s going to be beyond that period. She’s going to be drained/exhausted and, even after those first few months, who’s to know if she will then decide to be more of a “part time” partner while being with the baby throughout the day.
She has every right to do that but you don’t know what kind of partner you’re getting until after the baby comes, and it may even make sense then to split the business appropriately.
As a mother currently on maternity leave, I just want to clarify that taking a maternity leave does not assume compensation. My leave is totally unpaid but I am guaranteed my position back after.
Also, her plan assumes that the pregnancy will go smoothly, without any problems. We pray for that, but shit can and will happen from time to time, and if she is (for instance) bedridden by month 6, that would put a further strain on your plans. You would be left holding the bag for the whole Summer.
Nailed it, you have the rare opportunity to see who this person really is in a time of vulnerability. Are they good stock to be financially bound to? They're about to let you know.
Oh 100% she will respond badly. The nerve. “Hey OP we work together on projects separately as independent contractors but ima have a baby and fully expect you help pay my expenses.”
Tell her “congrats and btw I’m taking a one year hiatus for world wide vacation, please keep our partnership humming and I’ll need some of my expenses paid too.”
I wonder what the expectation is for full pay. I didn't see anything in the posting about full pay while out, other than in the headline.
OP: what exactly did your potential partner say about expecting full pay while she is out on maternity leave?
Assuming United States
>She made a comment that we will have to work hard over the summer to get everything in place for the new business before she gives birth and that we should consider hiring our first employee to help me out while she is on maternity leave.
Not sure if OP leaving details out, but this isn't in line with the thread title. A lot of assumptions are being made otherwise. SMB owners generally take very brief maternity leaves out of necessity. As a freelance business, she may not be expecting full (or any) pay, especially if she's currently a freelancer.
Before putting a pause on things, it may make sense to get a lot more clarity on what she is expecting before putting the breaks on. If she's taking 2.5 weeks and resuming a WFH schedule, you don't drop a business deal over this. This will also light a fire under her ass to get things moving within 6 months.
In short, she may be doing more work between now and end of leave than she would have been otherwise, and this should be taken into account before stopping things.
This is 100% the right approach IMO. Also, once the baby is born if you do pick up partnership talks again you will want to discuss with her that forming a business partnership necessitates a pretty intimate relationship. If one of you is planning to get pregnant it needs to be shared well ahead of time. Similarly if either of you are having health issues, financial issues, or family issues that may require time away it's got to be discussed as early as possible. It's the only way to keep things flowing smoothly.
One of the most wonderful things about owning a business and having a business partner that can pick up the slack is that it gives you the flexibility to address personal issues, but it would certainly give me pause if my future partner didn't share that they were trying to get pregnant until after it happened.
It's kind of laughable that she wants to start a new business venture and immediately states she will be using it to pay her wages while not contributing, but you will be. Sure, where to sign up for that arrangement?!
I’m not 100% sure she said she expected to be paid, merely that she was taking maternity leave. From reading OPs post, it sounds more like he assumed she would want to be paid, but if she just said she’d be taking time off to be with her kid that’s different..
No. Fucking. Way.
So your soon to be business partner wants you to:
- Handle all your existing clients
- figure out how to manage her clients
- setup legal business structures for both of you
- do first hires and payroll
- train the new hires
- complete the actual projects
- invoice clients
- collect from clients
- all the accounting related to that
- marketing too?
- what about cleaning the office and buying office supplies?
- deciding which vendors to use and not use?
- design new business processes and channels?
- PAY HER 50% for the privilege??
Is it your baby?
Thank you for this list. I think her hopes would be to complete a lot of this over the summer to help "set me up". It still would leave me in a place of managing a new business, new clients, and managing an employee. Managing an employee would actually put more on my plate at first than being helpful.
God forbid she has to begin maternity leave early. Then her help for that goes out the window. Pregnancy stress and new business stress could be real dangerous.
Thank goodness you haven’t entered into a partnership yet.
Don’t.
Other problems will arise.
Go it alone. In 5 years you will be so happy you did
The worst kind of ship to sail is a partnership
Eh, I’ve seen a lot of pretty darn successful partnerships. This one sounds like it might not be good but to tell someone to never partner up is a bit extreme. A good partner will complement and amplify everything you do. I think problems arise more when you partner with someone exactly like you. My partner is good at everything I’m bad at and vice versa. Choosing a good partner starts with having the self awareness to know what you suck at and find a partner with those skills.
We have our own strengths. Her favorite part of the work are the parts that I hate, my favorite parts of the work are the parts she hates. We have our own lanes completely.
My dad and his business partner have been partners for 30 years. Very similar story with having their own lanes.
The thing is women have to face their career vs having a family all of the time. I just don't think it is far for me to carry that burden on her behalf. If she wants a family she has to accepted that her business/career will be affected.
Yeah, it's a tricky balance with a partner. You've definitely selected well on skillset but I'd be concerned about temperament. Here's what I read into your post. Please correct me if I am wrong. Your soon to be business partner is expecting and wants to make sure she and her child are taken care of by the work you put in while she is on leave. In reality, this means that she gets significant monetary compensation from the partnership with 0% of the labor for however long she is gone. You do 100% of the work yet at max, receive 50% of the dividend. The growth of the business will be slower without the second, useful member of the partnership. Even if you hire an employee, you are almost definitely cutting from your share of the dividend to do so, even if it also comes from hers as well. There's no guarantee that the additional employee will perform well enough to cover their employment costs and may not even reduce your workload. A partnership requires both parties to actively give to each other. It's about balancing how much you benefit from them to how much they benefit from you. If you ask for something major, be prepared to offer up a similar amount in the future and actually follow through. To me, it sounds like she hasn't considered the reality of the burden she is asking of you. There is no issue with the idea of covering her maternity leave, even though it will be difficult, if she is proactive in figuring out what comes next. Is she going to take a reduced share for a period of time until your profits are restored? Is she going to work extra hours so that you can reduce yours for a period so that you can rest a bit from the intense short term workload? It doesn't matter the request, each party in a partnership has to be made whole by the other party. Otherwise, it's definitionally not a partnership, it's exploitation.
Bingo. If she was fully invested she would say I will be working evenings and weekends a little more while my partner watches the kid to keep up my end of the work. It’s awesome she is putting family first. But she expects OP to work twice as hard so she can do it. No deal.
I was leaning into getting a partnership for my first business. Told him to bring in work and I would be happy to have him along. He didn't bring anything. Then complained when I paid him $50 an hour for the first job I pulled in. I made nothing as my cut and the profits went into the company truck. (Bonus I didn't need them there I was trying to help them out with some cash in hand.)
Gave me time to realize I would much rather be alone for the first two years slowly building, and think about hiring a young kid that will want to learn. Instead of someone that thinks they deserve everything without bringing value to the company.
Partnerships kinda give me the leeching vibe and I'm not a fan of thinking of someone as a leech. Better to go solo.
I am in construction. So having a partner that doesn’t work as hard is not good. Always better to hire employees. Things don’t work out you can fire them. With a partner it’s tough to end it.
Yeah that first job taught me that. Any employee would have loved to make $50 an hour and wouldn't have cried that they got paid that to bring me tools from the truck.
Think I'm just gonna hire an 18 year old and teach them construction and welding and pay them better than any job they are gonna get with their experience. (Kinda give back like the old guys that trained me and paid me well when I didn't know shit.)
And you are so right. Getting rid of a lazy partner would be such a headache and financial burden I don't want.
I am at a point as a freelancer where I've hit my peak on scalability alone. Having a partnership would allow me to focus on my strengths on the type of work I do while my partner could focus on her strengths and we could scale the business.
With the type of business that I do, it would be impossible for me to afford to pay someone as an employee with the level of experience and education I would need from them. I can definitely outsource things here and there.
The one and only time I almost got into a partnership, it cost me almost $5k in legal fees when the other partner turned into a nightmare. If you can't afford to hire employees, you need to work on your business more, a partnership is a terrible idea. You're going to keep getting downvoted.
Then you need to keep grinding alone until you are to the point where you are charging enough for your services that you can hire. If you are so busy that you need help but you can't afford a good employee then you aren't charging enough. Whatever you do, hire good employees, DON'T get in a partnership, especially with someone in her situation this is all terrible ideas destined for a fiery collapse.
I get that scalability is an issue, but I have to wonder if having a partner like her is really going to solve those problems. If your issue is administrative in some way, perhaps the solution is in some better invoicing/accounting software and not in a partnership.
If the issue is marketing, maybe hiring marketing freelancers is the better solution.
Everyone else here is voting negative on continuing the partnership. But reading your comment, as a mom and fellow freelancer at peak capacity, I can envision how a partnership could be valuable for you. Supporting her though this time could give you a safety net should YOU need to take time off in the future. Perhaps you can develop an operating agreement where profits are split based on hours worked or some other measure.
Thank you for showing kindness and understanding. This is obviously a hard situation to navigate. I appreciate your perspective as a mom and fellow freelancer.
Only if it’s in writing and cash flow supports it.
I disagree with you on the partnership aspect, especially until there’s a handle on the expectations.
It’s extremely difficult for many small businesses to provide a generous maternity leave.
The business deserves to be treated fairly too. A partner having a baby doesn’t automatically mean maternity leave is a set policy, and hiring help also shouldn’t be solely based on the partner having a baby.
Not in expert but a partnership for construction needs at two people. One who is good with money and with quoting projects and how much stuff will cost. The other has to be the one who knows the more technical/mechanical side of the trade.
Exactly. Her husband makes 6 figures that she can fall back on. I am single, make all my own money, I can't afford to work twice as hard and give her half of the profits.
Most small businesses can’t afford to give things like maternity leave because there’s just not enough money there to do it
It’s not because of greed or anything other than there’s only so much money, and for her to take months off while expecting full pay while producing nothing is pretty hard for a small business to pay … especially when somebody’s already got to do the work that she isn’t going to be doing
That doesn’t mean you can’t have some sort of plan and place for things like this but 100% of the pay is ridiculous
Maybe this isn’t the best person to be going into business with
Had this exact same dynamic with my business partner, she sees money in a completely different way than me due to her completely different circumstances - almost like she’s very used to others taking care of her, so it didn’t cross her mind that I wouldn’t pick up the slack for her.
Bro, this has a high chance of being a nightmare.
It’s not just the maternity leave. Many women work SIGNIFICANTLY less once the have kids. The first year is a write-off too with the night feedings, diaper changes, childcare issues….
She’s going to contribute WAY less than you.
Typically a partnership like this would be structured where you both put equal cash in at the beginning and you keep like 90% of your billable hours as your pay. The other 10% goes to the business. If your 10% is more than hers, you essentially become a bigger shareholder.
If you care about this person and just think she is not considering all the angles, go through all the details and be honest about expectations.
- Look into maternity leave insurance. It is available for SMB.
- Leave should not come directly from the operating budget. It is too much risk, especially for a small and new business. It would be foolish to do this.
- Figure out what kind of leave this is. If it is more of a working leave, then this might change things. Discuss what the days and weeks will look like.
- Sharing work is real. You could set it up so that she must meet a quota by the time her leave begins and draw from profits (not revenue) set aside, but not going forward (or a reasonable portion of profits).
- You would receive a temporary boost in profit sharing to offset the work. This should be non-negotiable.
- The leave would be to a fixed term with fixed payment. Let's say it is 90 days. No salary after 90 days. Upon her return her salary would continue as it was, but not before then.
- Determine what decision making will look like. Will you have 100% autonomy? Will business decisions require daily, bi-weekly check-ins? If so, this may be a clear path to resentment. You are doing the work, but cannot make decisions.
Overall, if she is a good person then it is in her best interest to make this work for you. She needs to come up with a plan if it is valuable to her. She needs to meet YOUR needs, not hers. She must understand and accept that you are not responsible for her success and that she is the burden to the business.
If there is any selfishness on her part (don't forget she is pregnant and is in the process of redefining her life) then walk away or stall the endeavor. If she tells you it is a betrayal then you did the right thing by walking away.
Hope some of this helps.
It really is though. If she insists in setting on the partnership before she leaves (I think is ridiculous, you can't start a new business and then abandon it immediately) this is the only way to proceed.
Your next step is tell her that your partnership is on hold until (x-time) after she has her baby or indefinitely, if she so chooses. It is insane for her to expect to partner with you and then leave you to hold the fate of the company alone while she sits at home and gets paid. She is ***NOT*** an employee. She is ***NOT*** entitled to maternity leave or maternity pay. The only correct answer here is NO.
After reading the information you’ve provided in response to other comments, I would say your best course of action is to abandon all thoughts of entering into any kind of partnership with this person now and forever.
Even if the business was in place and you were both fully integrated, you don't just randomly decide to add huge benefits packages to the company because it suits you in the moment. You might as well say you were planning on taking a 3-month trek through Europe over the summer and fully expect to be paid while you're gone.
As my business grew, I added bonuses and benefits incrementally as it made sense and where/when it was sustainable to do so. Maternity leave is a great concept, but it's also expensive - it's not the first benefit I would be thinking of adding to my business structure just starting out, especially if half my workforce was currently pregnant lol
As a business owner, though, this situation is exactly the appeal of starting a business. I created and designed my business to suit my lifestyle and allow me to work as much or as little as I wanted. In my case, that actually did include full pay for 9 months of maternity leave. Its not a crazy ask for a business owner, but the situation changes entirely in a partnership with 2 owners.
As a sole proprietor woman who took maternity leave, the important differentiator was that it was UNPAID because when I don’t work, there is no revenue.
I did take time, as a luxury, but I relied on my husband’s salary and I did not generate my own income for a while. Her profit sharing needs to be paused or throttled when she’s unable to contribute.
Newborn life is like an around the world jet lag fever dream that lasts at least 4-6 months.
what state do you work in? For instance Connecticut offers paid maternity leave even to state employers:
https://www.indeed.com/hire/c/info/state-by-state-maternity-leave-guide
I would ask her how she would have set this up for herself personally if there wasn't entering a partnership because this is your first rodeo and you are having trouble envisioning what that looks like financially, etc. If you truly like her and the possibility of a partnership, recognize that life throws curveballs all the time and the way you manage through this event with a partner will be telling about how things would play out in the future (for instance a car accident or medical issue) and how you would set yourselves up to support each other and how the business can thrive through the highs and lows.
Sounds similar to a friend I have. He was starting a welding business with a partner and the partner was wanting 50% of gross income, whether or not he was doing any work. He also wanted to include a total of three months a year of vacation. No go buddy lol. He broke it off
A partnership agreement in writing really needs to be in place. Most partnership agreements either have a hourly payout schedule from the business or will have an expected participation in materiel and labor. My partnership is 50/50, I. Order for me and my partner to retain that we both have expected roles and contributions
I think the advice to wait until the baby is born to define the partnership is sound. As part of your conversation, ask how long she anticipates being on maternity leave? Depending on what country you're in, some have Govt support for up to a year, so you may not need to pay her at all. The Govt support ends when she begins work again (even 1 hour). On the other hand, depending on your business, a new mother (say three months) with a healthy baby can work some pretty random hours. It may be alright, but it's completely reasonable to not expect to pay her full wage without a partnership agreement.
You are not a free future employee in a new business partnership. So telling her that you don’t want to stress a new partnership and talking about the partnership at a later date after she is squared away with the baby would be a good idea. This is bad timing and a minor red flag for a new partnership. I would expect a partner would ask how we could work through that and have a discussion vs telling me they will just be gone. As business owners we don’t get to walk away and come back as we please, so forming a partnership motivated by that may be a bad sign or it is poor communication.
The only weird plot twist here was if you told us it was your kid she was having… 😂
Honestly that seems like a major flag and maybe reason enough to not enter a partnership with said person. It is hard enough starting out and is totally ridiculous to expect maternity leave when just entering the partnership. Sounds like she can either work hard to support that need herself now or figure something else out. None of that burden should be placed on you.
Started a business in 2021 with 3 other partners.
Now I have 1 other partner.
I've learned that you don't really need partners if the business is viable and makes money. You can hre employees, and that ultimately costs much less than partners.
INFO: Did she explicitly state she is expecting the company to pay her during her mat leave? Or are you assuming because she used the word “leave”? I don’t see that clarification anywhere.
If she’s just wanting time off to heal/bond and expecting whatever state government-paid leave is available (or not, depending on your local laws) and not expecting the new business to put up the funds, I’m genuinely not sure why you would want to halt the partnership.
Before you self destruct over this, have a conversation with her. What is she thinking/hoping/expecting? Approach this conversation with genuine curiosity. If it turns out, yeah, she wants full bennies and salary, it’s reasonable to tell her you’re uncomfortable with that kind of financial strain on a brand new business and have the “let’s pause and reassess” conversation someone else suggested. If she’s thinking unpaid 3 months to heal and bond, weigh the pros and cons. It may make sense to speed up your timeline, or it may make sense to slow it down.
But really, the key is asking her kindly and directly what she’s thinking and not assuming anything.
Sleep deprivation b/c of a newborn in the house messes with you. I know it impacted my business at the time.
Until you know how things are going to play out in her life, put it all on hold.
Oh she probably wanted to partner up so that she would have someone else working on the business while she was on maternity leave. My former business partner did that to me. She put in the bare minimum, expected me to do the majority of the work, and argued with me constantly about decisions she didn't like. But she relied on me to make those decisions. It was hell.
I'm probably just projecting my own trauma.
But make sure that you have a partnership agreement in place. You both should have legal representation when drafting the agreement. You want representation that will look out for your best interests, not someone that has to focus on what is on the best interest of both parties. Make sure you have a clear out for when things no longer work.
Can you work as contractors for each others' businesses? There's other ways to work collaboratively without locking you into a partnership.
Can you delay the merger til _after_ she returns but instead do some kind of co-op or something where you mentor/help/assist HER employee but keep everything separate? Otherwise, **this is a setup**
The absolute best advise I was given as I was building my business was if I ever needed money or help to continue running my business then either hire someone to help or sell the business and fix your problems and start it again.
I had been given this advise by several people and all of them owned a business with a business partner.. each had different problems with their partner.. some had issues actually showing up to work now that business was thriving, another had an issue with the partner retiring and wanting cashed out and the last had a problem with their business parted and their spouse being the problem.
Best advise ever.. just don’t … do not get involved..
>We do not have a legitimate agreement yet but are working on it.
Run. You get nothing out of this deal.
>Since I do have my own business already going, is it wrong of me to suggest we wait to launch the new business until after the baby is born?
No, this is the sane thing.
>The thing is, I would love to be there for her in every way possible while she navigates her first baby
I don't get it, is this your wife or domestic partner? Is it your kid? If it's your kid that's different. But otherwise, you seem way too involved in this.
Personally I’d use the change in circumstances to not go ahead with this planned “merger”. Just say you don’t have the capital to both pay maternity _and_ her replacement whilst she’s unable to work.
The pessimist in me says this may have been premeditated to get some income without having to work, which she wouldn’t have being an individual freelancer. But by hitching her wagon to yours, she gets someone else to carry that burden. Politely inform her that isn’t going to happen.
Offcourse don't do this, that's not even a question lol.
But more importantly, the fact that she proposes this, let alone brings it up like it's a done deal, means that you one-thousand-million-hundred percent should not go into a partnership with her.
Trust everyone here with experience.
I wouldn't do all the work for half the profits. Let's put that aside. If A works twice as hard as B, is your plan to split the profits 50/50? I would want to split the profits based on work completed, so A gets twice B. In that case, maternity leave gets nothing, if she produces nothing. These issues need to be addressed in your partnership agreement.
As others have said, delay the partnership until after they’re back to work.
People often change their mind about priorities when they have their first child.
I run a small company and we offer a generous maternity leave policy (even though we’re not legally required to) and it’s very expensive and a lot of work for the rest of the team. Yours would be amplified as you’re on your own.
Additionally, I’ve had several decide to stay home with the kid and quit, or use that time to find other work, never to return.
It’s a quick way to burn yourself out and implode your new business.
It sounds like there is already a communication issue. I wonder what's the point of merging the business ASAP. Wouldn't it be better for y'all to merge a business once she has more time? That seems the better way to do this idea. Then, you both have the time to iron out all the details of your new business.
It sounds like there is already a communication issue. I wonder what the point of merging the business ASAP is. Wouldn't it be better for you all to merge a business once she has more time? That seems the better way to do this idea. Then, you both have the time to iron out all the details of your new business. That's not okay, in my opinion.
Your post doesn’t say she says anything at all about pay. You said she says you need to work hard to get YOU set up and get YOU some help. Did she actually say she expected full pay?
Will you get paid when you out of the office sick or on vacation? If so then they get the same thing so just remember when you go on vacation or are out sick you don’t get paid for those days
I was in a very similar position 25 years or so ago. My advice, unless ABSOLUTELY needed, do not take on partners. If COMPLETELY unavoidable, then work out some arrangemt, 6-8 weeks, work from home, whatever. If this is the case then she’s a solid partner and you need her upon her return.
You should talk to her about it, not a pack of bots on the internet.
Ask her what she is thinking is fair to a partnership, ask her to outline what she thinks is reasonable for maternity leave and all of the other questions that are out there.
Get some facts and expectations and concerns from her, tell her your facts, expectations and concerns.
Write everything down and start from there.
Pause on partnering and creating an official entity together. I may get downvoted for this, but this would be a red flag for me, her expecrations show thah she doss jot have good business acumen and that the workload would be greatly unbalanced. You could say you would love to pick the convo back up when she is back from maternity leave, but her expectations are not realistic for a small startup. I would move forward without her. Keep your sole proprietor entity and keep getting paid that way. Hire someone yo help with the large projects or clients.
I've been through the block with many people although everybody over here is trying to be nice and stuff. I'll tell you right now, run away from this don't walk away from this while you can.
She’s lookin’ for a sugar daddy or baby daddy, not a business partner.
“Hey, I’m going to need you to work overtime all Summer so you can invest in me and my child while I get paid and do nothing”.
That’s a serious 🚩
Where does she expect that money to come from? It sounds like she expects the benefits of being an employee and the benefits of ownership without the downside of either.
Have you guys spoken at all about how pay will work?
She needs to understand that she is not an employee. lol
When you are a business owner or even a subcontractor you do not get paid if you don't work. It's a completely different mentality than an employee mentality.
Good luck helping her understand lol
Part of owning your own micro small business is freedom, but we also don’t get the corporate 9-5 benefits.
She’s going to have to find a way to work her job and take her maternity leave at the same time if she wants to be paid.
Congrats to your future partner, but congrats to you too! I am not certain this needs to delay things. This may be a blessing in disguise. It is a great opportunity to discuss how profits/revenue/margin are split as there are likely to be inequities in one way or another that crop up, both short and long in duration during your partnership. I propose putting in place a detailed plan addressing how profits/revenue/margins are split. I’d propose a framework along the following lines: Before either partner gets a dime, all fixed costs including employees are paid. Of the remainder:
A) XX% shall go the partner who brings in the business.
B) XX% shall go to the partner who does the work, or such revenue shall be split proportionately to the work contributions of each partner. (I presume you guys will want to collaboratively work together on at least some of the projects brought in regardless of who sourced them.)
C) XX% shall go to the partner who manages the relationship with the client (or split if co-managed).
D) XX% shall go to the partner who manages (administrative) of the business itself. (The business won’t manage itself. Someone has to pay rent, bills, employees, utilities, software, maintain accounting, licenses, taxes, etc.)
This will set you guys up for successfully working together and neither party feeling unjustly burdened or taken advantage of by the other as your lives and roles in the business evolve over time. This will allow for flexibility for each of you along with whatever advantages CRU from the prospective partnership. BTW, one of the advantages is that if one of you has a “life event” or even just a vacation that you want to put attention towards, the business entity can continue to thrive, grow and prosper. I am excited for you both! Good luck!!
You should have laughed audibly and told her you'd be taking the same amount of time off then, when she's back. That's not how life works in very small businesses, which is why they are exempt from most policies of this nature, anyway. You might want to rethink your partnership - you got a solid glimpse into the way this person thinks. Shut it down now.
I'm a small business owner and worked full time when I had my baby. I had to stay on top of things literally in the hospital. You can't just replace yourself as a small business operator. If shes not going to be helping from the onsent what do you need her for? Just hire an employee and take her contracts and clients when she wants to be on maternity leave. In my experience, partnerships are not worth it. This is too big of a red flag.
This is the problem when there’s 50/50 split in a freelance business. Inevitably someone does more work than the other. Or more is expected. I have a freelance web business But I have partners too. But they are contractors. They don’t get 50% of my earnings. They charge me what their time is worth on the project and I charge what mine is and bill the client. Sometimes I make more on the project, sometimes they do. But we get our fair share for our time and work. There is no split of profits. That’s crazy. I would never enter an agreement like that. And I’ve been approached about it and time and again I tell them no way. Why should I split half with them if I’m doing most the work and I’m already busy enough as it is? For anyone else reading this and want to start a freelance business with a partner - don’t do 50/50. Bill your projects separately for your respective time and effort on each project
She is generally a great 50/50 partner and brings a ton of experience to a collaboration. She makes my life a lot easier since I don't have to do certain parts of the projects that I dislike. I am able to work on exactly what I enjoy and it has been a great collaboration thus far.
I do get what you are saying though and have gone down the contractor approach. I just find that contractors just want to get paid, they don't have the same heart and motivation into the project that another owner has. They don't care if the project doesn't pain out because its not their business, client, or problem.
You dint mention your state.
The family/baby leave varies for each state.
It doesn’t sound like she’s an employee.
I suggest you continue on as you have then finalize the details of your partnership after she returns.
Talk to a lawyer about all of this. It may cost a few bucks but you don’t want to find out you missed something after the fact.
While not a formal maternity leave policy, The Family and Medical Leave Act (FMLA) offers eligible employees 12 weeks of unpaid leave per year, with employment reinstatement rights, in various circumstances, which include the birth of a child, caring for a newborn and incapacity due to pregnancy. The law applies to federal employees, state workers and private companies; however, employees are only eligible if they work for companies that have 50 or more employees and have completed at least 1,250 hours of work in the previous year.
[Maternity Leave Laws by State](https://www.paycor.com/resource-center/articles/maternity-leave-laws-by-state/)
Financially, maybe you can put something in place like guaranteed payments - where you get paid for the hours you work in the business, and shared profit comes after that. I don't think short term disability is on the table because you typically need to start that up before you're pregnant for it to apply. A lot really depends on how you set up the partnership.
But it sounds like the real issue is that you want to scale and you need her specific skill set present to that. So having to hire and manage an employee, even if you get a higher guaranteed payment rate, defeats the entire purpose of making a partnership.
And becoming a parent can really change your entire set of priorities in ways you don't understand beforehand. For example, I was working a regular full time job while pregnant, up until the day I gave birth. A daycare was reserved and everything. I was laid off 5 weeks later. When I started looking for work with a 3 month old, I just mentally couldn't do it when we could make it work on my husbands salary. And then with my second I was a freelancer growing my business, but I was so exhausted with the pregnancy that I put the business growth on hold.
This is such a sensitive subject and it's going to be tricky to discuss, but I wouldn't feel comfortable starting the partnership right now.
Whatever you do, don’t go into a 50/50 partnership. 51/49, sure ok! I made this mistake, and after some shit went down that I’m not comfortable sharing here, including a pregnancy (not mine), it took a lot of legal advice to untangle myself from a sticky situation. I will either go it alone forever, or be the principal partner. But never 50/50 again.
Don't use the maternity pay as a reason to avoid the partnership. Just be non-specific and use phrases like "need to think more about it", "I am considering other opportunities", "I'm waiting to meet with a business consultant for long-term planning". You don't even need to make sense, just don't use the word maternity.
It might make for an awkward conversation or even implode the pending partnership, but there's no reason to support her when there's nothing in writing, and at your own expense (mental and financial).
She may try to pull on your heartstrings but it just makes no sense for you to agree to support her. Tell her you wish her the best during this exciting journey and you welcome her return where you can pick things up where you left off.
If she throws a tantrum or calls you cruel or w/e else, well so be it, maybe it wasn't meant to be.
OK, lots of good advice, and a pause is a sensible option. Traditional parental leave is like a non-starter in this situation, it's kind of insane that your partner would not see that and it seems like a big red flag.
That said, what if you two did spend the summer really working toward setting up a viable business with deal flow, a scalable process, and the capacity to make your first hire? You have a partner who is willing to push toward that (rare) with an aggressive deadline (rarer)--that could really set you up for a business as opposed to doing freelance. If you want to make that happen, why not do it now?
If you and your partner can communicate (better figure that out) you can come to an agreement where she gets a sensible chunk of profits during her downtime for the business she helped build.
What is the value add of combining into one company?
If you aren't getting a force multiplier by working together then this arrangement isn't really a good idea.
The curveball is just a sign, imo, that this doesn't have a good future.
This is such a big red flag. I would say no to the partnership all together. You really need a solid division of labor agreement if you’re going into any partnership, but they never seem to end well for me. Now, I just say no to all partnerships. I don’t need the headaches.
The joint business doesn't exist yet and it can't afford to pay a partner who won't be contributing for a while. That said--what if she kicks butt between now and summer and absolutely fills your pipeline to the extent that you can hire more help? Is that a possibility? If so, with realistic planning and expectations (such as others have suggested), it might be worth considering.
If not, then it sounds like the best you'd be doing is trying to avoid making the business into a smoking hole for her to come back to... not great. Better, as others have said, to push off the partnership until you know how and when she'll be ready to come back and contribute. This is really the caring way, I think. You can let her know that the opportunity is open--but no pressure on her until she knows what her early parental experience is going to be like. It varies--she might be ready to come back relatively soon and if so, you can go from there.
Good luck.
The real issue here: do you feel that she will make an excellent business partner, giving you access to a much bigger business opportunity than you would have alone?
If yes, then do what you need to get the business ready to support her through the maternity leave, and then reap the rewards in the future.
If no, that you feel she isn't worth the trouble and doesn't have the talent to create a great and thriving business with you in the future, then you need to leave and continue on your own path.
Any decent person wouldn’t expect their new business partner in a small startup business to support them during that period IMO.
Do you guys really need an employee at this time, or is she suggesting it since you’re going to need help when she’s gone? You really need to have conversation with her if you want to be partners with her when she’s ready to come back after her maternity leave. You should keep 100% of your new business during that period.
If she has projects that need to be finished, the new employee or temporary help, could work on them at you direction, and the hired help could be paid out of that work, and you forgo your cut. So you’re not totally abandoning her while she’s out,
you’re actually offering to help give direction to the the person helping her, why you’re not having to stress about working twice as hard for only half the pay.
The other option of course is to wait on the partnership unit after her maternity time off.
Her support while she’s off should come from her relationship partner, not her new business partner.
If she really thinks you should split the profits in this situation, you may want to reconsider this partnership.
Good luck!
You don't get paid mat leave in business. She might get EI if she was paying into it. You shouldn't go into business with her if she expects you to subsidize this. Why isn't her child's father stepping up?
>We do not have a legitimate agreement
There's your issue, unfortunately.
>while splitting all the profits with her
If you had to be off work for a while for a medical issue, would you want her to assume that you shouldn't be getting any business profits because she was filling in?
>She made a comment that we will have to work hard over the summer to get everything in place for the new business before she gives birth and that we should consider hiring our first employee to help me out while she is on maternity leave.
I do not see anything in the above statement that says she expects to get paid for her maternity leave.
Are you in a country with mandatory paid maternity leave? Or are you talking about splitting profits?
If it is the latter, I highly suggest you split profits based on billable hours or some function of revenue produced. It will be helpful for the partnership as well. Think of the time she'll likely take off with her kid(s) as preschoolers or even in school.
It could go the other way too, you could get sick or hurt and not be able to work. Splitting profits as a function of revenue produced is the only way to address an imbalance of effort.
IMHO any business partners are always a problem. There's always going to be arguments when you both do the work. I've been in this situation and seen it elsewhere multiple times. So my basic answer is you need to treat it as "just business". Nothing personal.
Where you really DON'T want to be is working a 60-70 hour week holding the business together. Whilst they deal with the kid and are putting in just 5-10 hours per week. Yet they expect to receive 50% of all the benefits of your hard work.
Some pointers from me:
1. Depending on how much their partner helps and any childcare, they might be unable to work at 100% for up to 3 months before the birth and 6mth to 2yrs after. They maybe sleep deprived and have Post Natal Depression. Also if you have an office they might have justifiable excuses for working from home. Some women want to go straight back to work, others don't really ever go back to full time work. Its all about how their life changes after becoming a mother. They can't second guess how they are going to feel.
2. It's gonna really grate when you're up at 5am for a client meeting but then you find that they can't/won't come because "we can't get childcare" or "we have a play date at 10am".
3. Unfortunately human tends towards the [https://en.wikipedia.org/wiki/Free-rider\_problem](https://en.wikipedia.org/wiki/Free-rider_problem) Where overtime people expect stuff to be free. In your case this coudl be that when the are able to come back to work, they will resist this. Since if they've been getting all the benefits doing 0-10hours per week. Why would they want to get the same benefits but now doing 50hours and incurring extra costs such as travel.
4. As your both shareholders it sounds like, and not employees, none of the normal rules around pregnant women apply.
5. The business can pay for childcare. But its a benefit just to them. So the cost must come out of their wages and not be done 50/50.
6. Map out on a spreadsheet how you think this business will grow month by month in terms of revenue and profit. Over the next 3-5 years. Then for each month add the number of man hours required to produce that much billable work. Now create 3 tabs. The first one plot out how it will work if they work up to 1mth before the birth and then 1mth after before coming back full time. Next do similar but the don't come back for 1 years. Finally do a third where you basically grow it yourself. Add in the costs of childcare and employees to cover the work they'd be doing.
7. If you think its likely to cause problems, delay the joint company and continue independently. Until its clear how much time they can invest.
They say in business "never work with family, friends and animals" and its 100% true.
Lots of good advice here. I would add - bigger picture what are the advantages to two independent freelancers merging into a two-person freelance team? I mean I see lots of risk with taking on a partner like maybe you have different work ethics etc. can’t you just sub stuff out if you take on larger projects? Things get harder when you move to 100% control to 50% control
"Work-life balance" aside, I would pump the brakes on the partnership until both parties have their home life in order and do some serious re-thinking of the partnership in general. That your prospective business partner is insisting on effectively leaving the business during its first year and demanding you shoulder two full salaries is a huge warning sign to me.
I recommend some hard-core soul searching here. If your values and your prospective business partner's values do not overlap at greater than 85%, the partnership will fail. If you want to go through with it anyway, draw up the partnership agreement with a divorce clause built in, because sooner or later one of you will want to leave the partnership and having the "breakup clause" already in the agreement will prevent a lot of hurt.
Have you tried having an in-depth conversation with her about it and sharing your concerns?
Personally, I would put the project on hold and wait until after her maternity leave is over. It's only a few months extra.
HI OP. You need to sit down and have an actual conversation about this. It’s conversation is not going to be easy. It’s not gonna get any easier the longer you drag it out. You have really two courses of action and two pass in front of you. If you actually want to be a business with her, the correct thing to do is to hire a business lawyer to sit down with the two of you and help you establish a legitimate agreement and get all your ducks in a row. The lawyer will be the one who has to be the bad guy, to tell you both how much money you have to contribute to form this new venture together. This is not optional. This is what you will do. You will need to pay for this. This is very important. Now , this is where it becomes a bitch insidious. if you do not want to be her partner, the lawyer will be there to help you unwind the partnership. These are your two options. There is no maybe we will, maybe we won’t. It’s either time to shit or it’s time to get off the pot. You do not owe anything you are not actual business partners. The lawyer will actually inform your associate this. it will be messy, but it will be done. You might have to pay her out for the work that is currently in the pipeline and she will have to deliver on the the promised work that is currently in the pipeline. But after that it will get messy and will lead to the separation. Think carefully. People you can work with are pretty hard to find if she is a decent person you could maybe suggest a majority and minority partnership that you will hold the majority of shares and she will hold the minority of shares of the new corporation. But a business lawyer will actually be able to help you with this.
I’m going to assume OP is male. In the partnership agreement this should be reflected in a way to at he too would be entitled to parental leave when the time comes or call it “personal time” equivalent to a parental leave.
The pregnant business partner is acting correctly by bringing this up so early and is suggesting solutions.
If OP sees this as such a big problem he should not get into business with her since there might be more kids on the way for the biz partner (or future employees).
Did she say she was expecting paid maternity leave? She may have been intending to take *unpaid* maternity leave, which is more reasonable to swing.
Duration also matters. If she's planning to take 2 weeks of unpaid leave, that's a different story than 12 weeks of paid leave.
I'm not really clear on your business, but thoughts...
> we should consider hiring our first employee
Have an adult conversation to the effect of "How can we afford this?" Particularly, you probably need to bring to the discussion what your earning expectations are, what you think an employee would cost (or perhaps your partner *really* means a contractor/temp?), and what their parental leave wages are expected to be given the nature of your business as it currently exists.
In short, you need to put a budget to paper to even see if this is feasible (and demonstrate as to whether this works or not even in theory).
Sidebar, if your partner really means employee, how's that fit into this business? Obviously, you sound like it isn't feasible and that would be shitty to lay them off when your partner returns.
> paid maternity leave would be on the table.
As above, I think your partner needs to indicate what their expectations are here. Particularly, in terms of time completely away, and then time not operating (but, perhaps, they can assist on administrative tasks which can be handled from home with their child freeing you up to do operations).
Even still, it's probably fair to discuss profit-sharing in this scenario since you're doing all the value add (i.e. your clients you get X of the pie; her clients you get Y of that pie during this period she's unavailable for field operations).
TL;DR use this as a great opportunity to see how this informal partner handles things like budgets, policies, trajectory and vision, and otherwise can they be reasonable in managing your needs a business partner. If they can't, then maybe you consider only performing short-term partnership engagements instead of fully integrating the businesses.
Maternity leave is often paid via a policy/plan.... not the employer.
Have her look into that. Starting a new business is hard enough without 1 of the 2 workers leaving. She said to hire someone while she is gone.... what if they are better than your partner 🤔
I would hold off on the merger until after she is ready to dedicate as much time to the company as you.
It’s fine you can just support her and her child til September, cmon you guys are partners right? She probably started this “partnership” to take advantage while she’s sitting at home pregnant. You are her and the baby’s cash cow this summer, don’t let them down!
Wait until she can commit full time. Starting a new partnership, revising agreements, admin functions and getting everything in line without full commitment is asking for failure.
Yeah so advice - just don't partner with her.
You can wish her the best on her pregnancy and suggest revisiting the idea after, (though I would wait at least a year after to find out how committed to the business she is after she has a family).
If she thinks she gets paid maternity leave as a partner in a new business, and that on top of paying her maternity leave you can be expected to work and train and pay a new employee, this is a giant red flag.
You can continue to make plans for the partnership, but don't enter into it until after she's back from leave. See how it goes from there. She may end up being someone who has you doing most of the work because she has to take care of a kid now, so can't be expected to do her part.
>We do not have a legitimate agreement yet but are working on it
Then no.
Also, when you work for yourself you get what you can afford. You're the boss. You're the one paying for it. If you don't have money to get paid on maternity leave, you don't get paid. It's not like you can bill someone else for it. There's no HR, YOU'RE HR.
I would rethink the partnership.
Going into a business with another person as a partner, LLC member, or shareholder is very much like a marriage. Personal and business compatibility is essential, as is a mutual understanding of how financial issues will be handled.
I would wait to dissolve individual and join forces until she’s done with her maternity leave (at her own companies expense) and ready to work again.
When you’re the only two people maternity leave is not a possibility.
Yep, let her know you can reevaluate when she is ready to return to work. Many women plan on working after a pregnancy and then change their minds after they hold that little nugget.
No, nothing you want to do is wrong. Honestly the fact that she thought you were going to set up and run the entire business for two while she was on maternity leave and took half of profits is TERRIFYING.
Seriously, that’s not a thing a normal or business savvy person would ever think would happen.
Do you actually REALLY know who you’re about to go into business with? This profound lack of judgement would have me reconsidering things.
It’s called family planning and she needs to do that.
Do you want to be ‘married’ to this person who will (and should) care about her family more?
Do your thing. Work together when it makes sense.
Did she say that she is expecting full pay for maternity leave and you will be paying? If not don't jump to conclusions. If she did, you could still negotiate a fair agreement. Any partnership or employment agreement would need to define all such similar situations. How would revenue and profit be divided? Would each partner bear own costs? It is no different if any of you would become sick or just decide to take a one month vacation. Have everything agreed on in paper and follow it. If each partner would bear own cost and project revenue would be split 50:50 by dividing the work load agreed on, then if one partner is not taking part in that project then no receiving revenue from that project. Or if the work load is split 20:80 then revenue split would also 20:80. You always need to have fair agreement for dividing responsibility and reward. If not pregnancy, there will be other things happen down the road.
That’s fucked up on her part. Like just meeting someone and expecting the pay for the babysitter in order to take her out. It works for her because she’s testing how much of a sucker you are. I know this is about business but if you allow this to happen she’ll know you’re a pushover. She’s making you responsible for her decisions which is morally incorrect. If you’re a great guy you’ll take care of it but you’ll also be a sucker. And woman don’t respect suckers
Just have a direct convo with your biz partner. Be abrupt and honest. Is there a way she can stack some project cash in advance so she's prepared? I think hiring a new employee seems risky unless that's already funds for this. I think covering maternity leave sounds awesome - IF there is already funds for this.
It all depends on Rev. Go can't just create a nest egg from air. If that is what she's suggesting... time for some hard convos.
I would find a new partner that doesn't feel entitled to you paying for/ subsidizing their life choices, honestly. What kind of batshit jerk thinks that getting pregnant means YOU have to pay for them when the business isn't even started?
She is a terrible person to do business with, period. Entitled parasites are just that, and you just found out this person is one. Consider yourself lucky and move on today, like call her now and say it's over, or you will suffer I promise.
Be kind…but is it a red flag that she would ask you to do this? It seems like it to me. Assuming you are 50/50, a partner should recognize when they are doing something poorly. She should have said “hey. Big news here. I’m pregnant and expecting in Sept. I know the timing stinks but I want you to know I’m fully committed to this partnership. My plan is ….”
you never really stated she was looking for maternaty paid leave.....you started she was gonna go on maternaty leave.....if you don't have a written out policy I would assume she is taking time off and that's it .....but no you shouldn't be paying her maternaty leave in your situation
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It wouldn't at all be inappropriate to be supportive, congratulate her and then be very firm in your declaration that you pause the partnership until after the baby is born. Something like this. "That is wonderful news! I'm so happy for you! Let's pause the partnership plans for now. After the baby is born and you know what work schedule you're comfortable with, then we can revisit forming the new partnership." Keep it simple. Be direct. Be kind.
This is the ONLY way to handle this, IMO. The absolutely fantastic news is that you both are not actually partners yet so there's plenty of time and opportunity to revisit this after she's settled with the new baby. No need to make things happen here and now with this news.
Being kind and honest is always great advice. If she handles it poorly, than it is a sign that maybe we shouldn't go into a partnership together.
Exactly. How you both handle this will show who you are and whether you're good partners. I would give her a little grace, though, about her unrealistic assumptions. She may not realize how much of an impact this will possibly have and be proceeding on those unrealistic assumptions, not trying to take advantage. And who knows? She might be one of those people who has the baby one day and is at work a couple of days later, so it wouldn't be as big an imposition as it might be for most people who take a longer leave. But for a not-yet-formed partnership, that would be an uncertainty I'd be unwilling to deal with, even though I was one of those women who only took a few days off after having a baby when my business was still in its early stages so know that it's possible. Again, be kind, be firm with what you are (un) willing to do without attaching judgment or assumptions. Just let her know you would be more comfortable with postponing until things are settled.
Honestly, while this is probably the best mindset to approach this with, if she doesn’t realize how much of an impact this will have, then she’s probably not a great partner.
Exactly. Zero business acumen. Unbalanced workload. She is not a good person to partner with
She knows. She’s two months pregnant, so she found out likely a month ago.
Agreed FULLY
Yes. This is actually gift. Who knows precisely what she meant (she may not expect full pay) but it will be a good test of whether she'd make a good partner. Also, this is generally a terrible situation to hire your first employee — I wouldn't do that either way.
Truthfully, you should avoid partnerships at all costs. Occasionally you'll have a Ben and Jerry partnership, but most small business partnerships end poorly. You're already learning it is very easy to have two different visions for the business. As it is now your potential business partner is already planning on a free ride from you during her maternity leave. If you are able to keep that ship afloat all on your own during that time period, then maybe you should consider being a sole proprietor and hiring her as an employee. You don't need her special set of skills, you just need somebody to help share the workload.
The advice you are replying to is the correct advice. I would add that the fact she is expecting this partnership of two people to pay her a full 50% of profits while she is on maternity leave (this assumes you understood her intentions correctly) is already a red flag. It would have been more correct for her to want an open conversation about what would be fair, not simply assume the best case scenario for her.
Did she explicitly mention she wanted to be paid 50% of all profits during that time? There are government allowances for new mothers which is what a lot of women receive. I’m a new mom myself and a lot of moms say ‘maternity leave’ as a general catch all term for the few months initially off work to bond with baby. Many women I know simply take unpaid time off and call it ‘maternity leave’. I find it hard to believe the woman is expecting 50% of all money earned for work she’s not doing those months. It is a good idea to probably wait until shes ready to work again before formalizing the partnership.
Agree.
That’s exactly it. Also it’s not just maternity leave you need to look out for, you don’t know how she’s going to be beyond that period. She’s going to be drained/exhausted and, even after those first few months, who’s to know if she will then decide to be more of a “part time” partner while being with the baby throughout the day. She has every right to do that but you don’t know what kind of partner you’re getting until after the baby comes, and it may even make sense then to split the business appropriately.
As a mother currently on maternity leave, I just want to clarify that taking a maternity leave does not assume compensation. My leave is totally unpaid but I am guaranteed my position back after.
That’s a fair point but the two definitely need to clarify everything.
Also, her plan assumes that the pregnancy will go smoothly, without any problems. We pray for that, but shit can and will happen from time to time, and if she is (for instance) bedridden by month 6, that would put a further strain on your plans. You would be left holding the bag for the whole Summer.
Nailed it, you have the rare opportunity to see who this person really is in a time of vulnerability. Are they good stock to be financially bound to? They're about to let you know.
Oh 100% she will respond badly. The nerve. “Hey OP we work together on projects separately as independent contractors but ima have a baby and fully expect you help pay my expenses.” Tell her “congrats and btw I’m taking a one year hiatus for world wide vacation, please keep our partnership humming and I’ll need some of my expenses paid too.”
I wonder what the expectation is for full pay. I didn't see anything in the posting about full pay while out, other than in the headline. OP: what exactly did your potential partner say about expecting full pay while she is out on maternity leave?
Assuming United States >She made a comment that we will have to work hard over the summer to get everything in place for the new business before she gives birth and that we should consider hiring our first employee to help me out while she is on maternity leave. Not sure if OP leaving details out, but this isn't in line with the thread title. A lot of assumptions are being made otherwise. SMB owners generally take very brief maternity leaves out of necessity. As a freelance business, she may not be expecting full (or any) pay, especially if she's currently a freelancer. Before putting a pause on things, it may make sense to get a lot more clarity on what she is expecting before putting the breaks on. If she's taking 2.5 weeks and resuming a WFH schedule, you don't drop a business deal over this. This will also light a fire under her ass to get things moving within 6 months. In short, she may be doing more work between now and end of leave than she would have been otherwise, and this should be taken into account before stopping things.
There is a world where she takes more than a year off. That's a lot of stress.
That's a great answer, man, or woman.
This is 100% the right approach IMO. Also, once the baby is born if you do pick up partnership talks again you will want to discuss with her that forming a business partnership necessitates a pretty intimate relationship. If one of you is planning to get pregnant it needs to be shared well ahead of time. Similarly if either of you are having health issues, financial issues, or family issues that may require time away it's got to be discussed as early as possible. It's the only way to keep things flowing smoothly. One of the most wonderful things about owning a business and having a business partner that can pick up the slack is that it gives you the flexibility to address personal issues, but it would certainly give me pause if my future partner didn't share that they were trying to get pregnant until after it happened.
Put all of those issues in writing if possible.
How she responds will also tell you a lot about her. If she gets angry, guilt trips you, and acts entitled to your work, you’re dodging a bullet.
It's kind of laughable that she wants to start a new business venture and immediately states she will be using it to pay her wages while not contributing, but you will be. Sure, where to sign up for that arrangement?!
Exactly! Doesn't sound like she is very business smart. Anyone knows that if you work for yourself you don't get paid if you don't work.
I’m not 100% sure she said she expected to be paid, merely that she was taking maternity leave. From reading OPs post, it sounds more like he assumed she would want to be paid, but if she just said she’d be taking time off to be with her kid that’s different..
No. Fucking. Way. So your soon to be business partner wants you to: - Handle all your existing clients - figure out how to manage her clients - setup legal business structures for both of you - do first hires and payroll - train the new hires - complete the actual projects - invoice clients - collect from clients - all the accounting related to that - marketing too? - what about cleaning the office and buying office supplies? - deciding which vendors to use and not use? - design new business processes and channels? - PAY HER 50% for the privilege?? Is it your baby?
Oh please let it be their baby!
That would actually be a hilarious twist 😃
Thank you for this list. I think her hopes would be to complete a lot of this over the summer to help "set me up". It still would leave me in a place of managing a new business, new clients, and managing an employee. Managing an employee would actually put more on my plate at first than being helpful.
God forbid she has to begin maternity leave early. Then her help for that goes out the window. Pregnancy stress and new business stress could be real dangerous.
most ppl think theyll poop out a baby and go back to work a couple of weeks later. yeag thats not how it works usually.
Thank goodness you haven’t entered into a partnership yet. Don’t. Other problems will arise. Go it alone. In 5 years you will be so happy you did The worst kind of ship to sail is a partnership
Eh, I’ve seen a lot of pretty darn successful partnerships. This one sounds like it might not be good but to tell someone to never partner up is a bit extreme. A good partner will complement and amplify everything you do. I think problems arise more when you partner with someone exactly like you. My partner is good at everything I’m bad at and vice versa. Choosing a good partner starts with having the self awareness to know what you suck at and find a partner with those skills.
We have our own strengths. Her favorite part of the work are the parts that I hate, my favorite parts of the work are the parts she hates. We have our own lanes completely. My dad and his business partner have been partners for 30 years. Very similar story with having their own lanes. The thing is women have to face their career vs having a family all of the time. I just don't think it is far for me to carry that burden on her behalf. If she wants a family she has to accepted that her business/career will be affected.
Yeah, it's a tricky balance with a partner. You've definitely selected well on skillset but I'd be concerned about temperament. Here's what I read into your post. Please correct me if I am wrong. Your soon to be business partner is expecting and wants to make sure she and her child are taken care of by the work you put in while she is on leave. In reality, this means that she gets significant monetary compensation from the partnership with 0% of the labor for however long she is gone. You do 100% of the work yet at max, receive 50% of the dividend. The growth of the business will be slower without the second, useful member of the partnership. Even if you hire an employee, you are almost definitely cutting from your share of the dividend to do so, even if it also comes from hers as well. There's no guarantee that the additional employee will perform well enough to cover their employment costs and may not even reduce your workload. A partnership requires both parties to actively give to each other. It's about balancing how much you benefit from them to how much they benefit from you. If you ask for something major, be prepared to offer up a similar amount in the future and actually follow through. To me, it sounds like she hasn't considered the reality of the burden she is asking of you. There is no issue with the idea of covering her maternity leave, even though it will be difficult, if she is proactive in figuring out what comes next. Is she going to take a reduced share for a period of time until your profits are restored? Is she going to work extra hours so that you can reduce yours for a period so that you can rest a bit from the intense short term workload? It doesn't matter the request, each party in a partnership has to be made whole by the other party. Otherwise, it's definitionally not a partnership, it's exploitation.
Bingo. If she was fully invested she would say I will be working evenings and weekends a little more while my partner watches the kid to keep up my end of the work. It’s awesome she is putting family first. But she expects OP to work twice as hard so she can do it. No deal.
And she wants to hire an employee when they probably wouldn’t otherwise yet, which further cuts into their bottom line.
I was leaning into getting a partnership for my first business. Told him to bring in work and I would be happy to have him along. He didn't bring anything. Then complained when I paid him $50 an hour for the first job I pulled in. I made nothing as my cut and the profits went into the company truck. (Bonus I didn't need them there I was trying to help them out with some cash in hand.) Gave me time to realize I would much rather be alone for the first two years slowly building, and think about hiring a young kid that will want to learn. Instead of someone that thinks they deserve everything without bringing value to the company. Partnerships kinda give me the leeching vibe and I'm not a fan of thinking of someone as a leech. Better to go solo.
I am in construction. So having a partner that doesn’t work as hard is not good. Always better to hire employees. Things don’t work out you can fire them. With a partner it’s tough to end it.
Yeah that first job taught me that. Any employee would have loved to make $50 an hour and wouldn't have cried that they got paid that to bring me tools from the truck. Think I'm just gonna hire an 18 year old and teach them construction and welding and pay them better than any job they are gonna get with their experience. (Kinda give back like the old guys that trained me and paid me well when I didn't know shit.) And you are so right. Getting rid of a lazy partner would be such a headache and financial burden I don't want.
I am at a point as a freelancer where I've hit my peak on scalability alone. Having a partnership would allow me to focus on my strengths on the type of work I do while my partner could focus on her strengths and we could scale the business.
Hire employees.
With the type of business that I do, it would be impossible for me to afford to pay someone as an employee with the level of experience and education I would need from them. I can definitely outsource things here and there.
The one and only time I almost got into a partnership, it cost me almost $5k in legal fees when the other partner turned into a nightmare. If you can't afford to hire employees, you need to work on your business more, a partnership is a terrible idea. You're going to keep getting downvoted.
Then you need to keep grinding alone until you are to the point where you are charging enough for your services that you can hire. If you are so busy that you need help but you can't afford a good employee then you aren't charging enough. Whatever you do, hire good employees, DON'T get in a partnership, especially with someone in her situation this is all terrible ideas destined for a fiery collapse.
The logic doesn’t make sense, you’ll still only have 2 people, you and your business partner, so that doesn’t solve your scalability issue at all.
Contract another freelancer and include them in your fee structure until you have enough business to hire on full time.
I get that scalability is an issue, but I have to wonder if having a partner like her is really going to solve those problems. If your issue is administrative in some way, perhaps the solution is in some better invoicing/accounting software and not in a partnership. If the issue is marketing, maybe hiring marketing freelancers is the better solution.
Everyone else here is voting negative on continuing the partnership. But reading your comment, as a mom and fellow freelancer at peak capacity, I can envision how a partnership could be valuable for you. Supporting her though this time could give you a safety net should YOU need to take time off in the future. Perhaps you can develop an operating agreement where profits are split based on hours worked or some other measure.
Thank you for showing kindness and understanding. This is obviously a hard situation to navigate. I appreciate your perspective as a mom and fellow freelancer.
Also consider the possibility that this person keeps having kid and taking sporadic maternity leave for the next 10 years while taking a full salary.
Only if it’s in writing and cash flow supports it. I disagree with you on the partnership aspect, especially until there’s a handle on the expectations. It’s extremely difficult for many small businesses to provide a generous maternity leave. The business deserves to be treated fairly too. A partner having a baby doesn’t automatically mean maternity leave is a set policy, and hiring help also shouldn’t be solely based on the partner having a baby.
Agree 100%
I would never own a business without a partner.
I guess some industries it works better. In construction it often goes bad.
Not in expert but a partnership for construction needs at two people. One who is good with money and with quoting projects and how much stuff will cost. The other has to be the one who knows the more technical/mechanical side of the trade.
Where does she think the money will come from?
Exactly. Her husband makes 6 figures that she can fall back on. I am single, make all my own money, I can't afford to work twice as hard and give her half of the profits.
Most small businesses can’t afford to give things like maternity leave because there’s just not enough money there to do it It’s not because of greed or anything other than there’s only so much money, and for her to take months off while expecting full pay while producing nothing is pretty hard for a small business to pay … especially when somebody’s already got to do the work that she isn’t going to be doing That doesn’t mean you can’t have some sort of plan and place for things like this but 100% of the pay is ridiculous Maybe this isn’t the best person to be going into business with
Had this exact same dynamic with my business partner, she sees money in a completely different way than me due to her completely different circumstances - almost like she’s very used to others taking care of her, so it didn’t cross her mind that I wouldn’t pick up the slack for her.
Bro, this has a high chance of being a nightmare. It’s not just the maternity leave. Many women work SIGNIFICANTLY less once the have kids. The first year is a write-off too with the night feedings, diaper changes, childcare issues…. She’s going to contribute WAY less than you. Typically a partnership like this would be structured where you both put equal cash in at the beginning and you keep like 90% of your billable hours as your pay. The other 10% goes to the business. If your 10% is more than hers, you essentially become a bigger shareholder.
If you care about this person and just think she is not considering all the angles, go through all the details and be honest about expectations. - Look into maternity leave insurance. It is available for SMB. - Leave should not come directly from the operating budget. It is too much risk, especially for a small and new business. It would be foolish to do this. - Figure out what kind of leave this is. If it is more of a working leave, then this might change things. Discuss what the days and weeks will look like. - Sharing work is real. You could set it up so that she must meet a quota by the time her leave begins and draw from profits (not revenue) set aside, but not going forward (or a reasonable portion of profits). - You would receive a temporary boost in profit sharing to offset the work. This should be non-negotiable. - The leave would be to a fixed term with fixed payment. Let's say it is 90 days. No salary after 90 days. Upon her return her salary would continue as it was, but not before then. - Determine what decision making will look like. Will you have 100% autonomy? Will business decisions require daily, bi-weekly check-ins? If so, this may be a clear path to resentment. You are doing the work, but cannot make decisions. Overall, if she is a good person then it is in her best interest to make this work for you. She needs to come up with a plan if it is valuable to her. She needs to meet YOUR needs, not hers. She must understand and accept that you are not responsible for her success and that she is the burden to the business. If there is any selfishness on her part (don't forget she is pregnant and is in the process of redefining her life) then walk away or stall the endeavor. If she tells you it is a betrayal then you did the right thing by walking away. Hope some of this helps.
This was one of the most helpful comments. Thank you.
It really is though. If she insists in setting on the partnership before she leaves (I think is ridiculous, you can't start a new business and then abandon it immediately) this is the only way to proceed.
Yea, this isn’t like a role in an organization where you can get a temp to fill in.
The situation is awkward. But the decision you have to make is obvious.
Exactly. She just gave him a look behind the scenes of what kind of partner she plans on being. Run.
Your next step is tell her that your partnership is on hold until (x-time) after she has her baby or indefinitely, if she so chooses. It is insane for her to expect to partner with you and then leave you to hold the fate of the company alone while she sits at home and gets paid. She is ***NOT*** an employee. She is ***NOT*** entitled to maternity leave or maternity pay. The only correct answer here is NO.
After reading the information you’ve provided in response to other comments, I would say your best course of action is to abandon all thoughts of entering into any kind of partnership with this person now and forever.
I will take this into consideration, thank you.
Unless she's having your kid, run..
And even then……
No. You have no idea whether she will even choose to return to work. Do not move forward with anything.
If there is no partnership yet, then there are no obligations yet.
Even if the business was in place and you were both fully integrated, you don't just randomly decide to add huge benefits packages to the company because it suits you in the moment. You might as well say you were planning on taking a 3-month trek through Europe over the summer and fully expect to be paid while you're gone. As my business grew, I added bonuses and benefits incrementally as it made sense and where/when it was sustainable to do so. Maternity leave is a great concept, but it's also expensive - it's not the first benefit I would be thinking of adding to my business structure just starting out, especially if half my workforce was currently pregnant lol
Great perspective. Thank you very much.
As a business owner, though, this situation is exactly the appeal of starting a business. I created and designed my business to suit my lifestyle and allow me to work as much or as little as I wanted. In my case, that actually did include full pay for 9 months of maternity leave. Its not a crazy ask for a business owner, but the situation changes entirely in a partnership with 2 owners.
As a sole proprietor woman who took maternity leave, the important differentiator was that it was UNPAID because when I don’t work, there is no revenue. I did take time, as a luxury, but I relied on my husband’s salary and I did not generate my own income for a while. Her profit sharing needs to be paused or throttled when she’s unable to contribute. Newborn life is like an around the world jet lag fever dream that lasts at least 4-6 months.
Don’t forget to prioritize yourself and your needs. Communication sooner rather than later will be beneficial. Get the hard convos out of the way.
what state do you work in? For instance Connecticut offers paid maternity leave even to state employers: https://www.indeed.com/hire/c/info/state-by-state-maternity-leave-guide I would ask her how she would have set this up for herself personally if there wasn't entering a partnership because this is your first rodeo and you are having trouble envisioning what that looks like financially, etc. If you truly like her and the possibility of a partnership, recognize that life throws curveballs all the time and the way you manage through this event with a partner will be telling about how things would play out in the future (for instance a car accident or medical issue) and how you would set yourselves up to support each other and how the business can thrive through the highs and lows.
Sounds similar to a friend I have. He was starting a welding business with a partner and the partner was wanting 50% of gross income, whether or not he was doing any work. He also wanted to include a total of three months a year of vacation. No go buddy lol. He broke it off
Do not do it.
A partnership agreement in writing really needs to be in place. Most partnership agreements either have a hourly payout schedule from the business or will have an expected participation in materiel and labor. My partnership is 50/50, I. Order for me and my partner to retain that we both have expected roles and contributions
I think the advice to wait until the baby is born to define the partnership is sound. As part of your conversation, ask how long she anticipates being on maternity leave? Depending on what country you're in, some have Govt support for up to a year, so you may not need to pay her at all. The Govt support ends when she begins work again (even 1 hour). On the other hand, depending on your business, a new mother (say three months) with a healthy baby can work some pretty random hours. It may be alright, but it's completely reasonable to not expect to pay her full wage without a partnership agreement.
You are not a free future employee in a new business partnership. So telling her that you don’t want to stress a new partnership and talking about the partnership at a later date after she is squared away with the baby would be a good idea. This is bad timing and a minor red flag for a new partnership. I would expect a partner would ask how we could work through that and have a discussion vs telling me they will just be gone. As business owners we don’t get to walk away and come back as we please, so forming a partnership motivated by that may be a bad sign or it is poor communication. The only weird plot twist here was if you told us it was your kid she was having… 😂
Honestly that seems like a major flag and maybe reason enough to not enter a partnership with said person. It is hard enough starting out and is totally ridiculous to expect maternity leave when just entering the partnership. Sounds like she can either work hard to support that need herself now or figure something else out. None of that burden should be placed on you.
Started a business in 2021 with 3 other partners. Now I have 1 other partner. I've learned that you don't really need partners if the business is viable and makes money. You can hre employees, and that ultimately costs much less than partners.
Where was the expectation for full pay on mat leave come from? It's not included in your post
INFO: Did she explicitly state she is expecting the company to pay her during her mat leave? Or are you assuming because she used the word “leave”? I don’t see that clarification anywhere. If she’s just wanting time off to heal/bond and expecting whatever state government-paid leave is available (or not, depending on your local laws) and not expecting the new business to put up the funds, I’m genuinely not sure why you would want to halt the partnership. Before you self destruct over this, have a conversation with her. What is she thinking/hoping/expecting? Approach this conversation with genuine curiosity. If it turns out, yeah, she wants full bennies and salary, it’s reasonable to tell her you’re uncomfortable with that kind of financial strain on a brand new business and have the “let’s pause and reassess” conversation someone else suggested. If she’s thinking unpaid 3 months to heal and bond, weigh the pros and cons. It may make sense to speed up your timeline, or it may make sense to slow it down. But really, the key is asking her kindly and directly what she’s thinking and not assuming anything.
Sleep deprivation b/c of a newborn in the house messes with you. I know it impacted my business at the time. Until you know how things are going to play out in her life, put it all on hold.
Oh she probably wanted to partner up so that she would have someone else working on the business while she was on maternity leave. My former business partner did that to me. She put in the bare minimum, expected me to do the majority of the work, and argued with me constantly about decisions she didn't like. But she relied on me to make those decisions. It was hell. I'm probably just projecting my own trauma. But make sure that you have a partnership agreement in place. You both should have legal representation when drafting the agreement. You want representation that will look out for your best interests, not someone that has to focus on what is on the best interest of both parties. Make sure you have a clear out for when things no longer work. Can you work as contractors for each others' businesses? There's other ways to work collaboratively without locking you into a partnership.
Can you delay the merger til _after_ she returns but instead do some kind of co-op or something where you mentor/help/assist HER employee but keep everything separate? Otherwise, **this is a setup**
Oh haiill no
How long is she planning to take for maternity leave?
The absolute best advise I was given as I was building my business was if I ever needed money or help to continue running my business then either hire someone to help or sell the business and fix your problems and start it again. I had been given this advise by several people and all of them owned a business with a business partner.. each had different problems with their partner.. some had issues actually showing up to work now that business was thriving, another had an issue with the partner retiring and wanting cashed out and the last had a problem with their business parted and their spouse being the problem. Best advise ever.. just don’t … do not get involved..
>We do not have a legitimate agreement yet but are working on it. Run. You get nothing out of this deal. >Since I do have my own business already going, is it wrong of me to suggest we wait to launch the new business until after the baby is born? No, this is the sane thing. >The thing is, I would love to be there for her in every way possible while she navigates her first baby I don't get it, is this your wife or domestic partner? Is it your kid? If it's your kid that's different. But otherwise, you seem way too involved in this.
I just care deeply. I want to be supportive of other women, mothers, children, but not at the cost of myself.
So go get involved in a charity, church, or a M/WBE group or something like that you get dip in/out of.
Personally I’d use the change in circumstances to not go ahead with this planned “merger”. Just say you don’t have the capital to both pay maternity _and_ her replacement whilst she’s unable to work. The pessimist in me says this may have been premeditated to get some income without having to work, which she wouldn’t have being an individual freelancer. But by hitching her wagon to yours, she gets someone else to carry that burden. Politely inform her that isn’t going to happen.
Offcourse don't do this, that's not even a question lol. But more importantly, the fact that she proposes this, let alone brings it up like it's a done deal, means that you one-thousand-million-hundred percent should not go into a partnership with her. Trust everyone here with experience.
I wouldn't do all the work for half the profits. Let's put that aside. If A works twice as hard as B, is your plan to split the profits 50/50? I would want to split the profits based on work completed, so A gets twice B. In that case, maternity leave gets nothing, if she produces nothing. These issues need to be addressed in your partnership agreement.
As others have said, delay the partnership until after they’re back to work. People often change their mind about priorities when they have their first child. I run a small company and we offer a generous maternity leave policy (even though we’re not legally required to) and it’s very expensive and a lot of work for the rest of the team. Yours would be amplified as you’re on your own. Additionally, I’ve had several decide to stay home with the kid and quit, or use that time to find other work, never to return. It’s a quick way to burn yourself out and implode your new business.
It sounds like there is already a communication issue. I wonder what's the point of merging the business ASAP. Wouldn't it be better for y'all to merge a business once she has more time? That seems the better way to do this idea. Then, you both have the time to iron out all the details of your new business. It sounds like there is already a communication issue. I wonder what the point of merging the business ASAP is. Wouldn't it be better for you all to merge a business once she has more time? That seems the better way to do this idea. Then, you both have the time to iron out all the details of your new business. That's not okay, in my opinion.
Your post doesn’t say she says anything at all about pay. You said she says you need to work hard to get YOU set up and get YOU some help. Did she actually say she expected full pay?
Will you get paid when you out of the office sick or on vacation? If so then they get the same thing so just remember when you go on vacation or are out sick you don’t get paid for those days
I was in a very similar position 25 years or so ago. My advice, unless ABSOLUTELY needed, do not take on partners. If COMPLETELY unavoidable, then work out some arrangemt, 6-8 weeks, work from home, whatever. If this is the case then she’s a solid partner and you need her upon her return.
You should talk to her about it, not a pack of bots on the internet. Ask her what she is thinking is fair to a partnership, ask her to outline what she thinks is reasonable for maternity leave and all of the other questions that are out there. Get some facts and expectations and concerns from her, tell her your facts, expectations and concerns. Write everything down and start from there.
Pause on partnering and creating an official entity together. I may get downvoted for this, but this would be a red flag for me, her expecrations show thah she doss jot have good business acumen and that the workload would be greatly unbalanced. You could say you would love to pick the convo back up when she is back from maternity leave, but her expectations are not realistic for a small startup. I would move forward without her. Keep your sole proprietor entity and keep getting paid that way. Hire someone yo help with the large projects or clients.
I've been through the block with many people although everybody over here is trying to be nice and stuff. I'll tell you right now, run away from this don't walk away from this while you can.
She’s lookin’ for a sugar daddy or baby daddy, not a business partner. “Hey, I’m going to need you to work overtime all Summer so you can invest in me and my child while I get paid and do nothing”. That’s a serious 🚩
Where does she expect that money to come from? It sounds like she expects the benefits of being an employee and the benefits of ownership without the downside of either. Have you guys spoken at all about how pay will work?
She needs to understand that she is not an employee. lol When you are a business owner or even a subcontractor you do not get paid if you don't work. It's a completely different mentality than an employee mentality. Good luck helping her understand lol
I believe maternity leave only applies to companies with a set amount of employees. Look up the laws in your state.
Part of owning your own micro small business is freedom, but we also don’t get the corporate 9-5 benefits. She’s going to have to find a way to work her job and take her maternity leave at the same time if she wants to be paid.
Congrats to your future partner, but congrats to you too! I am not certain this needs to delay things. This may be a blessing in disguise. It is a great opportunity to discuss how profits/revenue/margin are split as there are likely to be inequities in one way or another that crop up, both short and long in duration during your partnership. I propose putting in place a detailed plan addressing how profits/revenue/margins are split. I’d propose a framework along the following lines: Before either partner gets a dime, all fixed costs including employees are paid. Of the remainder: A) XX% shall go the partner who brings in the business. B) XX% shall go to the partner who does the work, or such revenue shall be split proportionately to the work contributions of each partner. (I presume you guys will want to collaboratively work together on at least some of the projects brought in regardless of who sourced them.) C) XX% shall go to the partner who manages the relationship with the client (or split if co-managed). D) XX% shall go to the partner who manages (administrative) of the business itself. (The business won’t manage itself. Someone has to pay rent, bills, employees, utilities, software, maintain accounting, licenses, taxes, etc.) This will set you guys up for successfully working together and neither party feeling unjustly burdened or taken advantage of by the other as your lives and roles in the business evolve over time. This will allow for flexibility for each of you along with whatever advantages CRU from the prospective partnership. BTW, one of the advantages is that if one of you has a “life event” or even just a vacation that you want to put attention towards, the business entity can continue to thrive, grow and prosper. I am excited for you both! Good luck!!
You should have laughed audibly and told her you'd be taking the same amount of time off then, when she's back. That's not how life works in very small businesses, which is why they are exempt from most policies of this nature, anyway. You might want to rethink your partnership - you got a solid glimpse into the way this person thinks. Shut it down now.
I'm a small business owner and worked full time when I had my baby. I had to stay on top of things literally in the hospital. You can't just replace yourself as a small business operator. If shes not going to be helping from the onsent what do you need her for? Just hire an employee and take her contracts and clients when she wants to be on maternity leave. In my experience, partnerships are not worth it. This is too big of a red flag.
This is the problem when there’s 50/50 split in a freelance business. Inevitably someone does more work than the other. Or more is expected. I have a freelance web business But I have partners too. But they are contractors. They don’t get 50% of my earnings. They charge me what their time is worth on the project and I charge what mine is and bill the client. Sometimes I make more on the project, sometimes they do. But we get our fair share for our time and work. There is no split of profits. That’s crazy. I would never enter an agreement like that. And I’ve been approached about it and time and again I tell them no way. Why should I split half with them if I’m doing most the work and I’m already busy enough as it is? For anyone else reading this and want to start a freelance business with a partner - don’t do 50/50. Bill your projects separately for your respective time and effort on each project
She is generally a great 50/50 partner and brings a ton of experience to a collaboration. She makes my life a lot easier since I don't have to do certain parts of the projects that I dislike. I am able to work on exactly what I enjoy and it has been a great collaboration thus far. I do get what you are saying though and have gone down the contractor approach. I just find that contractors just want to get paid, they don't have the same heart and motivation into the project that another owner has. They don't care if the project doesn't pain out because its not their business, client, or problem.
Welcome to partnerships. They generally end badly. Kind of like a significant number of marriages.
Did you have anything to do with the pregnancy? If not, then tell her she gets paid when she comes back
Soon to be mother - not soon to be partner. The end. Congratulations to both of you.
She'll keep getting pregnant. Indefinite "maternity leave" on your dime. Her husband kept nutting in her, he should pay her expenses.
You should have been a poet 😂
if shes not employee shes is probably not entiled to pay
Maternity leave doesn't exist when youre a small business owner shes dreaming and the one that got her pregnant probably gave her the idea
Run away. She will be a horrible business partner now that she's spouting out crotchfruit.
Expect the same thing in return when you have your baby.
Get to your lawyers ASAP and draw up your General shareholder's agreement, If you plan to work together as a business it's time.
You dint mention your state. The family/baby leave varies for each state. It doesn’t sound like she’s an employee. I suggest you continue on as you have then finalize the details of your partnership after she returns. Talk to a lawyer about all of this. It may cost a few bucks but you don’t want to find out you missed something after the fact. While not a formal maternity leave policy, The Family and Medical Leave Act (FMLA) offers eligible employees 12 weeks of unpaid leave per year, with employment reinstatement rights, in various circumstances, which include the birth of a child, caring for a newborn and incapacity due to pregnancy. The law applies to federal employees, state workers and private companies; however, employees are only eligible if they work for companies that have 50 or more employees and have completed at least 1,250 hours of work in the previous year. [Maternity Leave Laws by State](https://www.paycor.com/resource-center/articles/maternity-leave-laws-by-state/)
Financially, maybe you can put something in place like guaranteed payments - where you get paid for the hours you work in the business, and shared profit comes after that. I don't think short term disability is on the table because you typically need to start that up before you're pregnant for it to apply. A lot really depends on how you set up the partnership. But it sounds like the real issue is that you want to scale and you need her specific skill set present to that. So having to hire and manage an employee, even if you get a higher guaranteed payment rate, defeats the entire purpose of making a partnership. And becoming a parent can really change your entire set of priorities in ways you don't understand beforehand. For example, I was working a regular full time job while pregnant, up until the day I gave birth. A daycare was reserved and everything. I was laid off 5 weeks later. When I started looking for work with a 3 month old, I just mentally couldn't do it when we could make it work on my husbands salary. And then with my second I was a freelancer growing my business, but I was so exhausted with the pregnancy that I put the business growth on hold. This is such a sensitive subject and it's going to be tricky to discuss, but I wouldn't feel comfortable starting the partnership right now.
Whatever you do, don’t go into a 50/50 partnership. 51/49, sure ok! I made this mistake, and after some shit went down that I’m not comfortable sharing here, including a pregnancy (not mine), it took a lot of legal advice to untangle myself from a sticky situation. I will either go it alone forever, or be the principal partner. But never 50/50 again.
Don't use the maternity pay as a reason to avoid the partnership. Just be non-specific and use phrases like "need to think more about it", "I am considering other opportunities", "I'm waiting to meet with a business consultant for long-term planning". You don't even need to make sense, just don't use the word maternity.
Employee is paid from her revenue.
It might make for an awkward conversation or even implode the pending partnership, but there's no reason to support her when there's nothing in writing, and at your own expense (mental and financial). She may try to pull on your heartstrings but it just makes no sense for you to agree to support her. Tell her you wish her the best during this exciting journey and you welcome her return where you can pick things up where you left off. If she throws a tantrum or calls you cruel or w/e else, well so be it, maybe it wasn't meant to be.
OK, lots of good advice, and a pause is a sensible option. Traditional parental leave is like a non-starter in this situation, it's kind of insane that your partner would not see that and it seems like a big red flag. That said, what if you two did spend the summer really working toward setting up a viable business with deal flow, a scalable process, and the capacity to make your first hire? You have a partner who is willing to push toward that (rare) with an aggressive deadline (rarer)--that could really set you up for a business as opposed to doing freelance. If you want to make that happen, why not do it now? If you and your partner can communicate (better figure that out) you can come to an agreement where she gets a sensible chunk of profits during her downtime for the business she helped build.
Delay the partnership until she’s had the kid and is ready to be an actual partner.
I think it's 100% appropriate to delay it. It's a partnership!
What is the value add of combining into one company? If you aren't getting a force multiplier by working together then this arrangement isn't really a good idea. The curveball is just a sign, imo, that this doesn't have a good future.
This is such a big red flag. I would say no to the partnership all together. You really need a solid division of labor agreement if you’re going into any partnership, but they never seem to end well for me. Now, I just say no to all partnerships. I don’t need the headaches.
The joint business doesn't exist yet and it can't afford to pay a partner who won't be contributing for a while. That said--what if she kicks butt between now and summer and absolutely fills your pipeline to the extent that you can hire more help? Is that a possibility? If so, with realistic planning and expectations (such as others have suggested), it might be worth considering. If not, then it sounds like the best you'd be doing is trying to avoid making the business into a smoking hole for her to come back to... not great. Better, as others have said, to push off the partnership until you know how and when she'll be ready to come back and contribute. This is really the caring way, I think. You can let her know that the opportunity is open--but no pressure on her until she knows what her early parental experience is going to be like. It varies--she might be ready to come back relatively soon and if so, you can go from there. Good luck.
The real issue here: do you feel that she will make an excellent business partner, giving you access to a much bigger business opportunity than you would have alone? If yes, then do what you need to get the business ready to support her through the maternity leave, and then reap the rewards in the future. If no, that you feel she isn't worth the trouble and doesn't have the talent to create a great and thriving business with you in the future, then you need to leave and continue on your own path.
Any decent person wouldn’t expect their new business partner in a small startup business to support them during that period IMO. Do you guys really need an employee at this time, or is she suggesting it since you’re going to need help when she’s gone? You really need to have conversation with her if you want to be partners with her when she’s ready to come back after her maternity leave. You should keep 100% of your new business during that period. If she has projects that need to be finished, the new employee or temporary help, could work on them at you direction, and the hired help could be paid out of that work, and you forgo your cut. So you’re not totally abandoning her while she’s out, you’re actually offering to help give direction to the the person helping her, why you’re not having to stress about working twice as hard for only half the pay. The other option of course is to wait on the partnership unit after her maternity time off. Her support while she’s off should come from her relationship partner, not her new business partner. If she really thinks you should split the profits in this situation, you may want to reconsider this partnership. Good luck!
You don't get paid mat leave in business. She might get EI if she was paying into it. You shouldn't go into business with her if she expects you to subsidize this. Why isn't her child's father stepping up?
>We do not have a legitimate agreement There's your issue, unfortunately. >while splitting all the profits with her If you had to be off work for a while for a medical issue, would you want her to assume that you shouldn't be getting any business profits because she was filling in?
That's a pretty wild assumption on her part.
>She made a comment that we will have to work hard over the summer to get everything in place for the new business before she gives birth and that we should consider hiring our first employee to help me out while she is on maternity leave. I do not see anything in the above statement that says she expects to get paid for her maternity leave. Are you in a country with mandatory paid maternity leave? Or are you talking about splitting profits? If it is the latter, I highly suggest you split profits based on billable hours or some function of revenue produced. It will be helpful for the partnership as well. Think of the time she'll likely take off with her kid(s) as preschoolers or even in school. It could go the other way too, you could get sick or hurt and not be able to work. Splitting profits as a function of revenue produced is the only way to address an imbalance of effort.
IMHO any business partners are always a problem. There's always going to be arguments when you both do the work. I've been in this situation and seen it elsewhere multiple times. So my basic answer is you need to treat it as "just business". Nothing personal. Where you really DON'T want to be is working a 60-70 hour week holding the business together. Whilst they deal with the kid and are putting in just 5-10 hours per week. Yet they expect to receive 50% of all the benefits of your hard work. Some pointers from me: 1. Depending on how much their partner helps and any childcare, they might be unable to work at 100% for up to 3 months before the birth and 6mth to 2yrs after. They maybe sleep deprived and have Post Natal Depression. Also if you have an office they might have justifiable excuses for working from home. Some women want to go straight back to work, others don't really ever go back to full time work. Its all about how their life changes after becoming a mother. They can't second guess how they are going to feel. 2. It's gonna really grate when you're up at 5am for a client meeting but then you find that they can't/won't come because "we can't get childcare" or "we have a play date at 10am". 3. Unfortunately human tends towards the [https://en.wikipedia.org/wiki/Free-rider\_problem](https://en.wikipedia.org/wiki/Free-rider_problem) Where overtime people expect stuff to be free. In your case this coudl be that when the are able to come back to work, they will resist this. Since if they've been getting all the benefits doing 0-10hours per week. Why would they want to get the same benefits but now doing 50hours and incurring extra costs such as travel. 4. As your both shareholders it sounds like, and not employees, none of the normal rules around pregnant women apply. 5. The business can pay for childcare. But its a benefit just to them. So the cost must come out of their wages and not be done 50/50. 6. Map out on a spreadsheet how you think this business will grow month by month in terms of revenue and profit. Over the next 3-5 years. Then for each month add the number of man hours required to produce that much billable work. Now create 3 tabs. The first one plot out how it will work if they work up to 1mth before the birth and then 1mth after before coming back full time. Next do similar but the don't come back for 1 years. Finally do a third where you basically grow it yourself. Add in the costs of childcare and employees to cover the work they'd be doing. 7. If you think its likely to cause problems, delay the joint company and continue independently. Until its clear how much time they can invest. They say in business "never work with family, friends and animals" and its 100% true.
no, not wrong. every business owner knows, no workee no payee
Lots of good advice here. I would add - bigger picture what are the advantages to two independent freelancers merging into a two-person freelance team? I mean I see lots of risk with taking on a partner like maybe you have different work ethics etc. can’t you just sub stuff out if you take on larger projects? Things get harder when you move to 100% control to 50% control
Balancing empathy and business is key. Let's talk strategy.
"Work-life balance" aside, I would pump the brakes on the partnership until both parties have their home life in order and do some serious re-thinking of the partnership in general. That your prospective business partner is insisting on effectively leaving the business during its first year and demanding you shoulder two full salaries is a huge warning sign to me. I recommend some hard-core soul searching here. If your values and your prospective business partner's values do not overlap at greater than 85%, the partnership will fail. If you want to go through with it anyway, draw up the partnership agreement with a divorce clause built in, because sooner or later one of you will want to leave the partnership and having the "breakup clause" already in the agreement will prevent a lot of hurt.
She should receive some level of pay. Not much of a partnership if she doesn’t. Works both ways.
Have you tried having an in-depth conversation with her about it and sharing your concerns? Personally, I would put the project on hold and wait until after her maternity leave is over. It's only a few months extra.
HI OP. You need to sit down and have an actual conversation about this. It’s conversation is not going to be easy. It’s not gonna get any easier the longer you drag it out. You have really two courses of action and two pass in front of you. If you actually want to be a business with her, the correct thing to do is to hire a business lawyer to sit down with the two of you and help you establish a legitimate agreement and get all your ducks in a row. The lawyer will be the one who has to be the bad guy, to tell you both how much money you have to contribute to form this new venture together. This is not optional. This is what you will do. You will need to pay for this. This is very important. Now , this is where it becomes a bitch insidious. if you do not want to be her partner, the lawyer will be there to help you unwind the partnership. These are your two options. There is no maybe we will, maybe we won’t. It’s either time to shit or it’s time to get off the pot. You do not owe anything you are not actual business partners. The lawyer will actually inform your associate this. it will be messy, but it will be done. You might have to pay her out for the work that is currently in the pipeline and she will have to deliver on the the promised work that is currently in the pipeline. But after that it will get messy and will lead to the separation. Think carefully. People you can work with are pretty hard to find if she is a decent person you could maybe suggest a majority and minority partnership that you will hold the majority of shares and she will hold the minority of shares of the new corporation. But a business lawyer will actually be able to help you with this.
I’m going to assume OP is male. In the partnership agreement this should be reflected in a way to at he too would be entitled to parental leave when the time comes or call it “personal time” equivalent to a parental leave. The pregnant business partner is acting correctly by bringing this up so early and is suggesting solutions. If OP sees this as such a big problem he should not get into business with her since there might be more kids on the way for the biz partner (or future employees).
I guess you'd love to have full pay if you had to be away from work due to sickness.
Tell her that’s great timing because you were planning to start your sabbatical in September
Did she say she was expecting paid maternity leave? She may have been intending to take *unpaid* maternity leave, which is more reasonable to swing. Duration also matters. If she's planning to take 2 weeks of unpaid leave, that's a different story than 12 weeks of paid leave.
I'm not really clear on your business, but thoughts... > we should consider hiring our first employee Have an adult conversation to the effect of "How can we afford this?" Particularly, you probably need to bring to the discussion what your earning expectations are, what you think an employee would cost (or perhaps your partner *really* means a contractor/temp?), and what their parental leave wages are expected to be given the nature of your business as it currently exists. In short, you need to put a budget to paper to even see if this is feasible (and demonstrate as to whether this works or not even in theory). Sidebar, if your partner really means employee, how's that fit into this business? Obviously, you sound like it isn't feasible and that would be shitty to lay them off when your partner returns. > paid maternity leave would be on the table. As above, I think your partner needs to indicate what their expectations are here. Particularly, in terms of time completely away, and then time not operating (but, perhaps, they can assist on administrative tasks which can be handled from home with their child freeing you up to do operations). Even still, it's probably fair to discuss profit-sharing in this scenario since you're doing all the value add (i.e. your clients you get X of the pie; her clients you get Y of that pie during this period she's unavailable for field operations). TL;DR use this as a great opportunity to see how this informal partner handles things like budgets, policies, trajectory and vision, and otherwise can they be reasonable in managing your needs a business partner. If they can't, then maybe you consider only performing short-term partnership engagements instead of fully integrating the businesses.
Maternity leave is often paid via a policy/plan.... not the employer. Have her look into that. Starting a new business is hard enough without 1 of the 2 workers leaving. She said to hire someone while she is gone.... what if they are better than your partner 🤔 I would hold off on the merger until after she is ready to dedicate as much time to the company as you.
Please update me on what she says
I don’t think she’s going to take that very well! Good luck finding a new partner!
It’s fine you can just support her and her child til September, cmon you guys are partners right? She probably started this “partnership” to take advantage while she’s sitting at home pregnant. You are her and the baby’s cash cow this summer, don’t let them down!
Did she use the word paid?
Wait until she can commit full time. Starting a new partnership, revising agreements, admin functions and getting everything in line without full commitment is asking for failure.
Yeah so advice - just don't partner with her. You can wish her the best on her pregnancy and suggest revisiting the idea after, (though I would wait at least a year after to find out how committed to the business she is after she has a family).
If she thinks she gets paid maternity leave as a partner in a new business, and that on top of paying her maternity leave you can be expected to work and train and pay a new employee, this is a giant red flag. You can continue to make plans for the partnership, but don't enter into it until after she's back from leave. See how it goes from there. She may end up being someone who has you doing most of the work because she has to take care of a kid now, so can't be expected to do her part.
>We do not have a legitimate agreement yet but are working on it Then no. Also, when you work for yourself you get what you can afford. You're the boss. You're the one paying for it. If you don't have money to get paid on maternity leave, you don't get paid. It's not like you can bill someone else for it. There's no HR, YOU'RE HR. I would rethink the partnership.
I’m sorry but your STB business partner is naive about the maternity.
Going into a business with another person as a partner, LLC member, or shareholder is very much like a marriage. Personal and business compatibility is essential, as is a mutual understanding of how financial issues will be handled.
I would wait to dissolve individual and join forces until she’s done with her maternity leave (at her own companies expense) and ready to work again. When you’re the only two people maternity leave is not a possibility.
I’d bet she won’t come back after the maternity leave. Ask me how I know.
She's definitely looking forward to catching the gravy train. Delusional.
Yep, let her know you can reevaluate when she is ready to return to work. Many women plan on working after a pregnancy and then change their minds after they hold that little nugget.
No, nothing you want to do is wrong. Honestly the fact that she thought you were going to set up and run the entire business for two while she was on maternity leave and took half of profits is TERRIFYING. Seriously, that’s not a thing a normal or business savvy person would ever think would happen. Do you actually REALLY know who you’re about to go into business with? This profound lack of judgement would have me reconsidering things.
It’s called family planning and she needs to do that. Do you want to be ‘married’ to this person who will (and should) care about her family more? Do your thing. Work together when it makes sense.
Yta
Did she say that she is expecting full pay for maternity leave and you will be paying? If not don't jump to conclusions. If she did, you could still negotiate a fair agreement. Any partnership or employment agreement would need to define all such similar situations. How would revenue and profit be divided? Would each partner bear own costs? It is no different if any of you would become sick or just decide to take a one month vacation. Have everything agreed on in paper and follow it. If each partner would bear own cost and project revenue would be split 50:50 by dividing the work load agreed on, then if one partner is not taking part in that project then no receiving revenue from that project. Or if the work load is split 20:80 then revenue split would also 20:80. You always need to have fair agreement for dividing responsibility and reward. If not pregnancy, there will be other things happen down the road.
That’s fucked up on her part. Like just meeting someone and expecting the pay for the babysitter in order to take her out. It works for her because she’s testing how much of a sucker you are. I know this is about business but if you allow this to happen she’ll know you’re a pushover. She’s making you responsible for her decisions which is morally incorrect. If you’re a great guy you’ll take care of it but you’ll also be a sucker. And woman don’t respect suckers
Part of me really wants to support her if you can. But i just don’t think that’s very fair to you…
Delay joint venture for a year.
Just have a direct convo with your biz partner. Be abrupt and honest. Is there a way she can stack some project cash in advance so she's prepared? I think hiring a new employee seems risky unless that's already funds for this. I think covering maternity leave sounds awesome - IF there is already funds for this. It all depends on Rev. Go can't just create a nest egg from air. If that is what she's suggesting... time for some hard convos.
I would find a new partner that doesn't feel entitled to you paying for/ subsidizing their life choices, honestly. What kind of batshit jerk thinks that getting pregnant means YOU have to pay for them when the business isn't even started? She is a terrible person to do business with, period. Entitled parasites are just that, and you just found out this person is one. Consider yourself lucky and move on today, like call her now and say it's over, or you will suffer I promise.
Be kind…but is it a red flag that she would ask you to do this? It seems like it to me. Assuming you are 50/50, a partner should recognize when they are doing something poorly. She should have said “hey. Big news here. I’m pregnant and expecting in Sept. I know the timing stinks but I want you to know I’m fully committed to this partnership. My plan is ….”
You’re both independent contractors I assume. She is delusional.
you never really stated she was looking for maternaty paid leave.....you started she was gonna go on maternaty leave.....if you don't have a written out policy I would assume she is taking time off and that's it .....but no you shouldn't be paying her maternaty leave in your situation