So you have an idea for a business of your own. The payoffs are enticing:
You get to reap the rewards of your own talent and drive, instead of selling them to someone else for a paycheck. You get to decide what work you do, how you do it and when you do it. Maybe best of all, you get to choose the people you work with. These are the key motivations that lead people to launch all sorts of businesses, from a sandwich shop to a consulting firm to a new tech startup.
If you are thinking of starting your own business, it will not take you long to realize that it can be very difficult to plan, finance and do all the tasks necessary to grow a business by yourself. Going it alone means you have to be an expert in every facet of your new enterprise: management, finance, marketing, producing your product or providing your service. And then, of course, there are sales!
Partner Up or Go It Alone?
This is why many people seek a partner or partners to help execute the business idea and share the burdens of creating a business. There are simplified options of going into business, like buying a franchise (someone else’s idea), or purchasing an established business (again someone else’s idea). But if you want to have your vision materialize then it may lead you to a partner/co-founder arrangement. You may have been lucky and found your co-founder at your business or technical school, or someone who is an old friend and has a background in something you may not be great at. Maybe you already found someone with complementary skills through a previous job or a networking group. This is great!
But a new partnership is a relationship unlike that of a classmate, friendship, co-worker, or someone who has the same motivations that you may have. No, this is more like getting married. It may be legally easy to get into but not so easy or fast to get out of. And the repercussions to you personally and the business itself may be devastating.
When everything is perfect on paper, and you have the right partner for you and the business looks like it is going to be a great success, then it is time to take pause and see if your vision may be clouded by the excitement and the assumptions that each of you may be making. You may think you are on the same page from many late night brainstorming sessions, but there needs to be more thoughtful and serious introspection, both individually and together, about the deeper functions of this new relationship.
Ask people who have had previous business partnerships and you may hear tales of a difficult partner that spent too much money, made decisions and took power without consulting their partners and maybe impasses that ended up taking too much time away from running the business and costing the firm too much. Angst can build when partners fail to make a conscious effort to understand how each of them will work together or how they are going to deal with the inevitable business challenges that require action when not all the partners agree.
Without a clear agreed-upon path to resolving strong conflicting opinions, partners risk sleepless nights and inefficiencies in the operation of the business. Successful businesses generally have been the result of successful partnerships. Big obvious names are Hewlett and Packard, Ben and Jerry, Jobs and Wozniak and Gates with Allen.
Key Business Partner Issues:
These are the first steps of resolving key issues that can trip up the best-laid plans. Anyone considering a partnership should make a deep dive starting in these areas:
- Goals: What are your personal and professional milestones?
- Roles: A job description which includes responsibilities, including those areas that may have overlapping responsibilities and those other less defined areas that may still need one of you to have broad accountability.
- Contributions: What are you contributing financially, with talent, resources and time?
- Equity: How will you determine the ownership splits? Your contributions and valuing them will come into play here.
- Compensation: What determines the partners’ draws, how will decisions be made regarding profits and how to deal with losses and capital needs?
- What will guide you when the inevitable conflict arises?
I know I have mainly talked about start-ups and the birth of a business, but dysfunction can also arise with someone you have worked with for years. Sometimes it can take a major disruption to the business to reveal stark differences between the partners. Major disruptions can result from internal events, like a death or disability or the addition or loss of a partner; as well as external events, such as a change in technology or the actions of a competitor. These events may bring a sudden shift in operations which requires decisive action.
Success for Your Business
Our goal is to help all partnerships thrive, whether new or existing. When you really know your partner and have a solid trust in them, you know they will have your back and make the best decision for both of you and the business.
It is hard to really know somebody in ways that matter in a business relationship. We here at True Connect have a system that effectively uncovers and clarifies hidden issues that may sabotage your business. We help you have honest and open discussions that resolve tensions (present and future) and get everyone on the same page.
We want you to be able to build your company not just with enthusiasm, but with confidence that you and your partners understand each other, and can build a business together that succeeds.