When To Start A Business Partnership
In this article, I’m going to tell you when to start a business partnership, and when you shouldn’t.
I recently spoke to a former coaching client of mine about six months ago, and his business was going really well. His site was all set up, and it was pretty much all automated. It had a high profit margin (marketing and sales was working). The problem that he had, that’s caused the business to close down completely, after a year and a half was with his business partner.
He didn’t have any problems with business, or marketing, or anything business related. It was his relationship with his business partner – he wasn’t very keen handling the administration side of the business (he wasn’t very keen to log tax returns).
All those things that you’re supposed to be doing in business, like administration he didn’t do (any business has to do this). He wasn’t very keen on doing this, but my client in his other business was. He knows how to run a business, he already owns one on the side (he’s a developer). They had a medium sized fight over this, and they broke up the business over a tiny little problem like that.
I’ve seen this happen over and over – this has happened twice to me. Usually, it’s related to one business partner not doing as much work as the other business partner. When you’re entering a business partnership, you should realize it’s like a marriage potentially. You should realize you’ll be putting in many many years into a business relationship with someone, to build a business.
It’s going to be very very hard at some points in the business – every few years there’s a recession, and all businesses are like holy shit what do we do now. If you can’t rely on your business partner in that situation, there’s very little you can do.
You’ve sacrificed four or five years of your life, and then the business may fail, because you made the wrong decision. It’s just like a marriage really; that’s how serious this decision is.
There are other reasons not to start a business partnership – for example, if you’re doing it out of protection: ‘I just want to protect myself from doing too much work’. If you’re running a business between two people, you’re not going to do less work (your responsibility isn’t going to be split in half), it’s going to be the same. You’re going to have two people, and it’s going to be double the work, because you’re two people. Sometimes it’s even more than double the work, because you have to babysit the second person, who may not be as business savvy as you, and may not be as focused on the business as you – be very very careful.
An example in your business, where you should start a partnership, is if you have synergy with that person. If you’re good at sales, marketing, and good at the ‘business side’, and the other person is good at the operations side, the technical side (he can do all the tech work, operations and all the sites), now you can do the sales.
If you can split your work like that, work really really hard, and learn from each other, then maybe you should start a business partnership, maybe. You have to be aware that you could be working with that person for many many years. If you have all these factors, then maybe you should do it, and it could be worthwhile (as they say, two brains are better than one), if you have proper synergy in your business.
Don’t let me discourage you from starting a business partnership, because I know plenty of people who have started one successfully.
Usually, they handle separate parts of the business. Early on, pretty much everyone has to be in sales, on the phone closing sales, all day – that’s the early part of business usually.
I’ve even seen business partnerships succeed, when both people have a completely different personality, world view, and just different people, because even though they don’t get along that well, they get along well enough. In spite of this, the business will have two really strong personalities, and I actually did see this work out really really well, because when the business gets in one kind of problem, then one type of person is really good at handling it. If a business is an upwards economy, where everything is going really well, they need a different kind of person, a different personality to handle things.
These are two things that go on in business, and there’re many other aspects that go in business (like the topics I’ve just covered). Having two kinds of people running a business, can really really help. Employees, who you actually hire, are never going to care about your business as much as someone who co-owns a business.
Another thing I will say about this, is when you’re considering going into a business partnership (a fitness channel on YouTube, like one of my clients for example), and you want to partner up with someone who’s better at coaching. Is it better to start a business partnership? Or can you hire someone? If you can hire someone who can do it, and it can be done almost as well, then hire someone to do it.
Keep control, and 100% ownership of your business, because if you can hire someone, you’re going to have complete control. You can fire them, you can replace them, and you can do anything you want really. This is usually a better position to be in. If you have any questions, comment down below.