Perils of Partnership
When a partnership works, it’s a beautiful thing. When it doesn’t, it defines ugly.
Once, during a conversation about partnerships with a mentor, he said this: “Partners are only good for two things: sex and dancing.”
His personal experience led him to make that indictment. My experience has led me to be more thoughtful, but I advise anyone planning a business partnership to consider my mentor’s rude buy worldly comment as a warning to purge their plans of naivete.
A business partnership should be entered into with a healthy dose of reality about the human element involved. David Gage brings sunlight to this reality in his book, The Partnership Charter, wherein he writes, “Business people are experts in what they do, but they’re not in how to be partners.” Boy, howdy, is that true!
If you’re considering a partnership structure for your business, Gage recommends asking yourself, and your potential partner, the three questions below, which are followed by my thoughts.
1. Why do I want a partner?
Having a partner means that you can share the work and the risk. But it also means you have to share the decisions and the rewards.
For a partnership to work, all parties must place a higher value on the advantages of shared work and risk than on the efficiency of making unilateral decisions and keeping all the loot.
2. Are there better alternatives to taking on a partner?
Just like in a marriage, both parties have to bring something of value to the table. Examples could range from experience, to skills, to contacts, to capital.
The advantages of each partner to the endeavor should be identified, quantified and valued. Then each partner must determine if other alternatives to acquiring these benefits – and there are always alternatives – are more or less valuable than those of a partnership.
3. Is my prospective partner the best candidate?
If, after thoughtful and analytical evaluation, you determine that you prefer the partnership option, remember, that decision isn’t the same as who should be your partner.
When President Lincoln said at Gettysburg that “…all men are created equal,” he was not talking about business partners. The person you’re considering may not be suitable for your or any other partnership.
Now here are three of my quick partnership questions.
4. Do we have compatible work ethics?
All small businesses have more work to be done than people to do it. Don’t take a partner unless you know he or she understands and accepts this commitment.
5. Is our vision compatible?
Your views on the development, growth and ultimate dissolution of the business don’t have to be identical, but they do have to be compatible.
6. Do we share values?
This issue includes ethical behavior, such as how to treat employees and customers, and it will influence the quality of the brand you plan to build.
Write this on a rock… Successful partnerships require thoughtful prior consideration.
Jim Blasingame
Small Business Expert and host of The Small Business Advocate Show
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