Splitting office locations

[J-G]

I am starting to look into the possibilities of having two partner offices in different locations, and I was curious if anyone had links to information about this subject (legal, accounting, etc) and any tips.

My most basic questions regard how other offices keep records, clients, and other financial information separate when both offices are basically operating under the same name. Also legal matters concerning liability, and profit sharing between partners. The setup would be pretty simple (or not). I would like the two offices to share the company name for marketing and consistency, and share profits, but in essence the two locations would work separately as far as accounting and billing. At times employees from location "A" would of course work on projects from the location "B", but would the probably bill location "B" as consultants to keep company overhead localized to the employees' location.

Any advice, links, experience, etc would be appreciated.

Also simple matters like employee relations...I wouldn't want employees from the "old" location to feel chalenged, left behind, or misplaced by new workers at a new location

Jon

[adegnan]

I don't have a lot to say, Jonathon, but heres my bit.

Even Quickbooks can accout for multiple locations within a common data file, if that is what you want. You may want a multiple-user setup where you can have both locations sharing a common data file using a VPN or something like that?

The only word of caution-- do the job right in setting up the other locations, legally. My experience relates to my brother's profession as a martial artist, where the karate system he used to teach at was unified in its name and its curriculum, but had separate owners, and was not legally franchised. They were more of a mafia, ultimately, in how the enforced themselves.

Now, I don't exactly envision an architectural mafia walking around with scale-rules and whipping mouses around by their tails, but my point is-- establish a heirarchy of accountability and rules. How is the design of the firm going to be unified, or at least maintain the standards you have now?

Consult a lawyer and an accountant. Figure out how the accountability will be maintained. Are you going to hire new people or acquire another office?

Good luck.

[gregcashen]

You almost need to think like a big corporation in the sense that although there may be multiple offices, there is always a HQ and the marketing, sales, etc should be totally cohesive. That means you need to establish procedures, processes and guidelines BEFORE the split.

[J-G]

Thank you for the replies. This is something that I have been batting around in my head. At the moment I work as a consultant/ex employee, for a designer that I have been with for a long time. We work very well together because he is an incredible designer and I have strengths in the technical and organizational areas. The firm could definitely grow with more personal and marketing. What I see is one location focusing more on design and the other taking on larger - less custom design - and handling the majority of documentation. The puzzling part for me is how the books would be kept separate. Financially the firms would need to be separate (with some sort of partnership incentive for each firm), but for marketing and growth reasons they would need to operate with the same name. When it becomes a reality I would need to talk to a lawyer, but before I get to that point I was curious to see how other people had handled this, i.e. working under a common name, but being separate entities.

[bclarch]

Where and how you set up your business can be critical. Your company is usually governed by the regulations of the state in which it is incorporated. Some states are more business friendly than others.

You probably want to look at forming a "Limited Liability Corporation" (LLC). The very simple description is that it allows you to form a firm where each partner is only liable for their work. If partner A gets into legal trouble then only partner A's share of the assets is at risk, not the whole firm's. But you definately need to consult a lawyer and an accountant. An LLC might not be best for you. Each state's laws regarding forming corporations is different and in some cases you cannot create LLCs yet. Even if you plan on doing your own books you should consult with an accountant during your start up. There are tax implications to the various types of corporations which the accountant can help you understand. An accountant can also help with setting up profit sharing, retirement plans, bookkeeping standards, etc.

You can also contact the state and federal Small Business Administrations for guidance. The is also a program (federally sponsored with local chapters, I think) called SCORE (Service Core of Retired Executives). It is a volunteer organization of retired executives that provide advice and counselling to help people get their businesses started. I believe that they even try to match you up with someone with experience in your field if they can.

Good luck.

[adegnan]

J--

Why do you need two locations to accomplish what you are thinking? Why not just one larger office?

[J-G]

Because each location would be finically separate. You would then have a partnership of two firms rather then two individuals. Also the current office is in a bad location geographically (a long way from everywhere - specifically from where we do most of our work).