We are contemplating bringing in a Partner for the business the challenge we have is how do we calculate how much of the business the Partner will own and the worth of the Partner's share and what to put in a partnership agreement - any thought would be helpful

In terms of the value of the business you should look at the thread that is below which talks about various valuation methods:

http://www.smallbusinessforum.com/f1...ness-7002.html

One of the terms you should consider putting in your agreement with the partner is a reciprocal buyout clause to make sure you are fairly pricing the piece of the business. The way it works is like this:

If one of you wants to get out of the business or sell your share, you first go to the other partners and ask them how much they will pay for your share. For example, if they say $100 per share you can refuse but have the option of also buying their shares for $100 per share this way they will make a reasonable offer because they would not want to be bought out for small amount.

The most important thing you can do is to put a formal contract together that stipulates the terms. Make sure you spend most of the time on what happens if the company dissolves or if one partner wants to leave. It is not easy to talk about but it is better to do it now than wait. We had a partner leave us and because we spent the time it was a smooth transition.

Thanks txa that looks like an interesting way to write a provision and it seems like it would be fair to both parties.

I would avoid bringing in a partner if I was you. Think about it can you find someone who will work the same hours as you - what if they don't and lose interest in the business? What if they want to sell their portion of the business and you cannot afford to buy it? There are all kinds of problems with partnerships I think there has to be a clear leader or owner for a business to succeed.

I agree you do not tend to think of these things when things are going well but when they turn it can be like a cancer on the business