To Partner or Not to Partner

Deciding to go into business with a partner or to seek a partner for your existing business may be one of the most crucial decisions you’ll make as an entrepreneur.  A great partner can be a tremendous asset to your future financial position, while a poor choice can make every hour of your living days miserable.  This article explores just a few aspects of this important option in running a business.

One of the reasons another member has posted for going the partnership route is to have a contingency plan in case one is unable to work, either temporarily or permanently.  Although this is only one type of contingency plan, it can be a good choice if there are other compelling reasons to have a partner. 

The best short-term contingency partner for a small business or start-up, in my opinion, is one's spouse, if the spouse has the flexibility to step in temporarily.   You may find that your spouse has learned more than you think about the details of your business by listening to you talk at the dinner table about the trials and tribulations of your day at work.  And you thought you were just venting.  Unless you are in a medical condition that renders you incapable of communication or decision making for an extended period, you can certainly make many decisions and give advice even during a long recovery.  Realistically, many spouses can't, however, abandon the responsibilities of their own career, so this choice only works for certain couples, and isn’t a choice at all for singles. 

If you really don't want to go it alone, choosing a partner wisely is critical to how you live the next twenty years.  Do not go into business with your long-time drinking buddy because you think it would be a real hoot.  Unless, of course, you are trying to get rid of him as a friend and you don't mind filing for bankruptcy.  

The most important criteria in a partner are character traits like honesty, a likable personality, reliability, great problem solving skills, and a strong work ethic.   We wouldn’t want to partner with a slacker (no matter how charming and entertaining), a person of questionable ethics, or someone who couldn’t help think through almost daily commercial dilemmas that we face running businesses.  And of course your two personalities must be compatible. Next, I would want this partner to have special knowledge or skills, or be able to do something better than I.  This means that the potential partner can offer something that I can’t to customers, or fulfill some internal function that is not my cup of tea.

For example, if I'm great at sales, but poor at finance and accounting, I might want my partner to have strength in those areas.  Or maybe my strength is dealing with employees, and her strength is in strategic or market planning.  What you don’t want to do is duplicate yourself by choosing someone with a very similar skill set as you.  You already exist.  Strategically, you might find more business opportunities if your partner specializes in some other related areas that can bring more value and benefit to your customers, or attract new customers altogether.  Either way, that spells business growth through diversity of product/service, which is a healthy way to increase your business.  It is much easier for you and your differently skilled partner to teach each other the basics of what you each are doing, than for two people with identical skills to become really proficient or naturals in other business functional areas.

That leaves us with a final option—no partner.  The conditions of the early stages of a business endeavor are often such that it really is the entrepreneur who “does it all and knows it all.”  If an unfortunate occurrence takes the business originator out of the picture too early and for too long, it may well cause the demise of the enterprise.  But barring this dire situation, how does an entrepreneur-a sole proprietor-ever take a vacation, or go to that 3-day seminar in Ohio, or get that bad knee replaced?  

The best solution is to build an organization. I don’t mean you have to be General Electric or Microsoft to take the kids to Disney World, but you can plan to grow your business in a way that lets you have a reasonable expectation of some freedom, and at the same time adds considerable value to your company on the day you are ready to sell.  How? Build a company.  Don’t just start a business— build a company.  When you hire someone, hire only the best, and pay them more than you think you should.  Train them thoroughly, and learn to delegate.  The happiest time in business is when an entrepreneur is able to “let go”—to share some authority and decision making, and really trust employees to do their jobs right.  One experiences both exquisite freedom and (unavoidably at first) exquisite anxiety over what can go wrong.  Sometimes it does go wrong, and so you learn that the worst actually doesn’t happen. If you have built a company, you’ll be on vacation in Antigua with your real partner when this crisis happens at work, and if you've built it right, it'll be solved by the time you return, and your only real crisis will be catching the tender back to the cruise ship on time.