Dealers.............

longtimecollector

Would you rather be a "partner" in a brick and mortar venture, or a sole proprietor??? Do you think a local coin shop could provide reasonable income for two partners or is one even a stretch?

mr3holesinone

I would suggest a sole proprietorship. A partnership goes bad you'll probably lose a friend. With an owner/employee relationship, the employee can say adios much easier. A partnership break up would necessitate buying out a partner or selling off the business. Selling off the business assets would probably not happen overnight plus breaking leases, unpaid utility bills (among others for example) could hurt both partners. Buying out a partner could also pose problems if a fast split is wanted or if the valuation is difficult to determine.

MICHAELDIXON

I would NEVER go into a partnership in a brick and mortar again! I had a partner once and he stole me blind. He would trade for things and they wouldn't appear in the showcases and I wouldn't know anything about it until the customer he traded with came in and asked if the item had been sold. He wasn't "good" at keeping records, so when we were getting ready to sell the store, I kept records (without his knowledge). The first month the cash was around $600 short and the next month it was over $600 short. When I confronted him, he told me it was because we owed so and so money. I told him we didn't owe anybody $chit! We were always in debt and the next month, after I took control of the finances, we were $4k ahead. My best estimate, and it's probably low, is in the year we were partners, he took over $14k. Do Not go into a partnership!

JadeRareCoin

Would you rather be a "partner" in a brick and mortar venture, or a sole proprietor?

I have done it both ways, more than once, and in both the coin business and the engineering business. There are pros and cons to each option. With a sole proprietorship, you are alone and there's only so much ground that you can cover. That's not a bad thing, but you are somewhat limited to your amount of business activity. If your goal is to minimize stress, set your own hours, make all the decisions, play with coins and make a decent income, a sole proprietorship may be for you.

A coin dealing partnership is an entirely different story. Things get complicated quickly. You must learn to compromise on decisions ranging from your store location to the grade on a bust dime. It takes a lot of energy, but the amount of energy expended depends upon the character and intelligence of the two partners. The good thing about a partnership is that you can grow the business more effectively. You can cover more shows. You have less mistakes since you have decision by committee. Then there's the fact that you have, presumably, more financial resources. It also helps if you and your partner have complementary skills. For example, it is nice if one of the partners specializes in early material, whereas the other partner is better with 20th century coins/currency. Or, one partner is a financial/accountant whiz, while the other is great with marketing and advertising or web design/programming.

Your question is a difficult one to answer in general terms, since the big variable is who will your partner be. I have been fortunate in my partnerships to have worked with great people, so I can't share the horror stories like that shared by Michael Dixon. I have heard some terrible stories about partnerships, but the worst stories are about employees and not the other partner. One guy had his "best friend" working in his coin and stamp store. After about 3 years of strange occurrences, the owner set-up the employee and caught him stealing several thousand dollars worth of material. An indepth investigation revealed that the "friend" had stole over $500,000 in a 3 year period. The owner recovered about $30,000, but that's all.

Trust is the key. In the coin business, you only have one chance with trust. If you steal just one time....even if it's just a $1 coin....you blew it. The trust is permanently broken. It's easy to set-up someone in a coin partnership to "test" the other partner's honesty. I will leave it at that. The code that you have to live by is that you will never, under any circumstance, cheat your partner. If you do, you should find another career since you will have trouble working in the coin business again.


Do you think a local coin shop could provide reasonable income for two partners or is one even a stretch?

It depends on the partners, the location of the shop and your business/marketing plan. The coin business can be a good career that is steady and enjoyable. I don't think that you can ever become a multi-millionaire in the rare coin business if you are an honest person, but that's jmho.

Longacre

It's always nice to be a sole proprietor, but it is also possible to have a partnership or an LLC. In the partnership or LLC agreement you can put in specific provisons on the future dissolution of the business. Also remember that there are specific tax laws with respect to partnerships (and an LLC with more than one member is normally treated as a partnership for US tax purposes). There are also state laws that you should consider. Best of luck.