The most successful businesses are built on partnerships. If you think about entrepreneurs, they always have a really strong number two, but most often an actual partner.
As in marriage, if you get it wrong the results can be disastrous. Certainly the worst thing is to take on a partner who purports to have great contacts, guaranteed business or in-depth experience, when they haven’t.
While you have to be naturally optimistic to be in business, everyone has weaknesses and you should be honest about these upfront. For one, it means you can plan your business around this and, if necessary, recruit to fill the gaps.
If you understand each other’s strengths and weaknesses from day one, then you can build your business around this and avoid disappointment later on.
The level of ambition between you and your partner is something you need to establish very early. Common objectives are key but you would be amazed how many potentially successful partnerships fail on this basic principle.
If your partner just wants to have an easy life or, as I have said before, wants ‘a nice living for the owner’ type of business and you don’t, then this will inevitably lead to major problems going forward. So when you want to invest in new people or a plant and you take the minimum salary, they won’t want to reduce their standard of living. That’s when trouble begins and it can turn into a nightmare as the business grows.
Ironically it is when businesses become successful that the cracks appear. Before that you are fighting for survival and don’t have the option to make different decisions.
This brings me to a somewhat different point, the question of business ethics.
A similar view of what you want your business to be is vital. Paul Allen and Bill Gates had a notion of technology and what it meant – not money at the beginning, that’s for sure. Similarly a shared view on how you should treat your customers, your suppliers and your staff are vital to a successful partnership.
There is absolutely nothing worse than having a partner who doesn’t work as hard as you and yet takes half of what you earn as a combined entity.
If anything, this is the most common source of friction between partners and yet, if you’re both flexible, a solution can be found. So share common overheads but any excess can be on a ‘what you kill you eat’ basis.
You might say this can be divisive and lead to one party picking the best deals to the detriment of the other. On balance I would agree with this and advocate you make sure you both have the same work ethic before you start, or at least recognise your own strengths and weaknesses.
This raises the question of whether so-so partnerships work. Deadlock can be a disaster but, when you start up, you don’t think about the downside. I would advise that at least some thought is given to a buy-out formula right at the beginning – rather like a pre-nup!
In my experience the best partnerships are often based on different skill sets. This may sound trite but very often people come together originally because they are friends or have a lot in common, hence they’re similar characters.
However, if you can choose a partner who is opposite to you, so much the better. A good front man needs a detailed back room person; a technical guru needs a marketing person, a good ‘people’ person supplements a very driven- and goal-orientated partner and so on.
Funnily enough, although mutual respect is vital, very often this doesn’t extend to a close personal relationship outside the workplace. In fact I would go as far as to say it is rare that really close working partners socialise together regularly.
The integrity and honesty of your partners is absolutely key. So really do your due diligence on your future partner. This includes his or her personal background.
Meet their spouse, get your wife or husband’s view on them. And remember if you are a man, women have great intuition and can often identify character faults more quickly than men. Good luck!