When to Have a Partner in Business
Successful partnerships in business have the same qualities as successful partnerships in whale training.
Here’s how to determine if a partnership is right for you and your business.
The only reason enter into a partnership is when the partner can bring something of value to the table that you don’t have and can’t get otherwise.
Perhaps they are bringing money to the table in exchange for a piece of your company. Since you can’t get funding from the bank and you have no savings, this could be a reason to partner.
Partnering for Whale Training
I always wanted to partner with trainers who had more experience than me. Bringing 30 years of experience to the table was something I could not do. If I could partner with somebody who had 30 years of experience I knew I would benefit from the partnership. I despised partnering with trainers who still did not understand the basics of training. They gained from the partnership and I did not.
Partnering for Business
Your business partner should bring something worthwhile to the table. Do not partner with someone who’s attributes could be hired. Being good at bookkeeping is not a worthwhile attribute. You can hire a bookkeeper. Knowing how to market on social media is not a worthwhile attribute. You can hire someone to manage your social media.
Many part-time owners will argue that they “cannot afford” to hire someone. My response is, “you cannot afford to give away a piece of your company!” It is easy to buy expertise and not break the bank. Elance and Odesk are two great places to hire experts. Hire them and keep your business for yourself.
In a sentence: Don’t enter into a partnership to get something you could get elsewhere.
Partnerships from Weakness
Most partnerships in business, unfortunately, are formed out of weakness. The business owner thinks it would be more fun if her friend became her partner, for example. Or the favorite cousin (who’s really good at designing websites) becomes your partner because his involvement will allow you to spend more time working on the sales side of the business. These are doomed thought processes and will lead to the failure of your business, and even worse, potentially ending a meaningful relationship.
Weak Partnerships for Whales
More times than not, trainers would partner-up with their friends because they thought it would be fun. Are we looking for a partnership that is fun, or one that is successful? The trainers would start the partnership in good spirits but soon realize their friendship was best left outside the work place. Both trainers may have similar tastes in movies, but neither brought something valuable to the training plan.
GOOD FRIENDS ≠ GOOD WHALE TRAINING PARTNERS
GOOD FRIENDS ≠ GOOD BUSINESS PARTNERS
Weak Partnerships for Business
Family and friends usually don’t make good partners. You not only risk the life of your business because of an ill-made partnership, but you risk damaging or loosing the cherished relationship you once had. As the saying goes, “don’t mix business with pleasure.” The relationships with your family and friends are some of your most important relationships. Those relationships are not worth risking for the sake of your start-up or part-time business.
Partnerships from Strength
Instead, partnerships in business should be created out of strength!
Example of a Partnership made from Strength
Recently a friend of mind became a partner in a local day spa. My friend is extremely successful at turning failing companies into profitable ones. Normally he is paid a flat fee for his services, but occasionally a partnership is created in lieu of.
Previous to my friends involvement, the spa had never been profitable – despite the owner’s in-depth knowledge of beauty treatments. After my friend reviewed the operations of the spa he offered his services in exchange for a percentage of the company. Why would this spa owner give my fried a percentage of the company? Because he is bringing something to the table that the owner could not get otherwise. He is bringing a level of expertise that could turn a failing business into a money making machine. Is it better for the owner to make 100% of zero dollars or a smaller percentage on $1? It is better for her to take a smaller percentage of an actual number! Even one dollar!
Why wouldn’t the owner just pay a flat fee instead of giving away a piece of the company? When someone has “skin in the game”, so to speak, they are usually more intent on making the business succeed. The only way my friend can make money is if the company is profitable. How is that for motivation? It is in both of their best interest for the spa to become profitable. This is an example of a partnership that was created out of strength. Each party brought something to the table that the other did not have. The spa owner brought the spa and industry insight while my friend brought his business knowledge.
Consider why a partnership is right for you and your business. Ask yourself the question, “Does partnering with this person/entity allow me to obtain something that I can’t possibly obtain myself?” If the answer is “no”, odds are that you do not need this partnership. When you do decide to partner, partner out of strength, not weakness. Partner with someone who brings something worthwhile. This is your business. As soon as it becomes “ours”, it’s a whole different ballgame.
Disagreements should be expected in any partnership and no partnerships in business are perfect. In order to set your business up for success, make sure that you and your partner are looking at the same big picture. For example, if the “big picture” is to increase sales $100,000 next year, you may disagree on exactly how to get there, but you won’t disagree on the end goal. As soon as you disagree on “the big picture” the likelihood of falling apart increases. The first thing my partner and I would do before attempting to train a whale is discuss what methods of training we would use. It was crucial for us to be on the same page before starting. If we weren’t, failure was inevitable.