Should You Partner Up When It Comes to Business? 7 questions to ask yourself when considering a partnership
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After I came up with the idea for my company, a strategic-marketing consulting firm, one of the first decisions I had to make was whether I wanted--or needed--a business partner. Since this is a crucial question when first launching a business--whether to take on a business partner or go it alone--I'm going to explore both options over the next two columns so you can decide which would be best for your business. This month we'll discuss the solo entrepreneur approach.
There are many ways to structure an organization. Even as a solo entrepreneur, you don't have to go it alone if you set up an advisory board or board of directors to hold yourself accountable. But if thinking about asking someone you know to join forces with you and start a business together, before you make that offer, there are several questions you should ask yourself:
1. Is this the type of person I could work with every day who compliments my skill set? Deciding whether or not to partner up isn't unlike dating vs. marriage--there's a big difference between going out for an occasional dinner and waking up next to that person day in and day out. The bar is a lot higher when you're signing someone up for the long haul. Think about the person you've got in mind and ask whether they'll make the highs even better and the lows more tolerable. Will they bring out your strengths and compensate for your weaknesses? This is not a time to clone yourself. You already know what you know, so where are you weak?
2. What are my core values, and is there someone who shares the things that are most important to me who can help me grow my business? When I was starting out, I could only imagine having a partner if that person and I were completely in synch on issues like integrity, authenticity, passion and drive. I have a strong work ethic and know I would feel slighted by a partner who didn't work as hard, even if they were a good person. Be honest and realistic about your expectations--I don't believe you can ever compromise on things like core values. I've never seen it work.
3. Do all partners have to be equal? This is a tough one. Should there be an odd number of partners so you can break ties? Does it make sense to be classified as a minority or a woman-owned business if you qualify? And how would that change the dynamics? Two equal partners have to have a lot of issues ironed out in advance to be successful. The corollary here is, will everyone feel like an owner if they have some equity stake in the business? In my experience, there are people who think like owners whether they have stock or not. It's an attitude; it's not about job title.
4. If I don't have a partner, who will I turn to for advice or input? Making an important decision in a vacuum can be dangerous. If you don't take on a partner, then you'll need to consider who knows more about certain issues than you do. And what's in it for them to help you make the right call? Can they be an objective third opinion? Which decisions of yours should be vetted with an outside party as a reality check?
5. Will the business be stronger with more heads at the top? You'd need to decide how to divide responsibilities. I've seen it split by inside person/outside person and also by function. And when it comes to titles, will you be co-CEOs or will one of you be the president and the other the CEO/chairman?
6. Do you want to have to consult someone every time you want to make a major decision? Bachelor(ette)hood has its privileges. There are days when you really don't want to consult with anyone else or invest the time it takes to sell others on your ideas. You just know in your gut or through prior experiences that your decision is the right one. And without a partner around, you can solely decide to take on that new client, pursue a new market, or not go to the trade show this year without getting any attitude from a partner.
7. If I try it solo, could I bring in a partner later? When times are good, everyone wants to be your partner. When things get tough, will they still be around? In the early years when a company is in investment mode, few people offer to write checks to keep the train moving. Do you need outside capital to grow? As your customer base grows and revenues build, you'll find plenty of people who are interested.
When deciding whether to take on a partner, there are a lot of considerations, none of which should be taken lightly. These are important decisions because the health of your business is at stake.
Next month, we'll explore what it takes to make a partnership successful.