The Benefits of Having a Business Partner—The Art of Partnering
Is your partnership working?
Partnering can be Better than Going it Alone
The Benefits of Shared Ownership
All of you dyed-in-wool loners out there will probably ignore the following benefits of having a partner. But before you decide to operate on your own consider that there are benefits.
In this article a “partnership” means shared ownership in a business, whether in a classic partnership, or as shareholders in a corporation, or as members in a limited liability company.
Plugs management talent gaps: A good partnership brings multiple talents to the game. One partner may lack financial skills, while the other partner is an expert; one partner might hate sales, while the other enjoys it and is good at it. One partner can be shy and the other the life of the party. Different personality types can not only work well together, but can actually work better than two people who are the same type. An aggressive Type A personality might make a good entrepreneur but could be a lousy partner for another Type A.
Expanded Business Contacts: Each partner brings his or her own circle of contacts to the business, theoretically expanding the business by that other person’s presence. Networking is one of the best ways to grow any business—an essential part of marketing. With a partner, your networking opportunities expand. You join Rotary; your partner joins the Lions Club.
Easier Capital Access: If you have roughly equal talents, a capital source will be more convinced of the future continuity of a business. A banker or an investor might be impressed with the owner of the business, but they will have a natural concern about the health of the business should the health of the business owner fail.
Shared Responsibilities: When you go on vacation, it’s nice to know there is someone there with a vested interest in making things work. A loyal, well-trained employee can fit the bill, but there is nothing like having skin in the game to focus your attention. When I owned my company, I had no partner other than my wonderful wife. Once, while we were relaxing in the Caribbean, we heard about a blizzard on Long Island. We didn’t worry because our trusted office manager was in charge. When we returned, we found out that she had simply closed the office for two days, rather than arrange for late starts or staggering shifts, as any owner would do. There’s nothing like a vested interest.
Pride of Ownership: No, this is not a typo. Although this item also appears under the benefits of sole ownership, with a partner you can take comfort that when you go, the business doesn’t go with you. There is a built-in continuity. If you have been fortunate enough to have a partner with whom you are totally compatible, you will actually enjoy seeing your partner’s success as well as your own.
High Performance Teamwork: With the right partner(s), your ability to multiply your efforts and talents expand enormously. Working with a partner can be a fulfilling and profitable experience for both (or all) of you. Think of Abbott without Costello. Multiple talents, contacts, and strengths amplify the entrepreneurial drive that makes a business work.
Shared Ownership Concerns: Legal Issues
It has often been said that choosing a business partner is similar to choosing a spouse. Yes, there are similarities, but also major differences. If you are a traditionalist, you believe that choosing a spouse involves making a solemn vow tied to a contract of marriage, that this is your life partner. A business partnership, on the other hand, includes no vow that this person or persons will be with you for life, but it absolutely does—or should—involve a contract. When you take on a partner, or a major shareholder, sign a business agreement . Obviously, this means that you must hammer out the details before you form the business. This is not the place to economize—hire a lawyer. In the long run, it is your best investment.
Shared Ownership Concerns: The Art of Partnering
“It’s my way or the highway.” Cute phrase. But if you enter into a multiple ownership business arrangement, forget that phrase. A good partnership, just like a good marriage, doesn’t just happen. It needs to be worked at . There are a host of skills that you need to develop if you are to have a successful partnership. The good news is that they are great skills to learn if you don’t already have them, and they will enhance your position as a leader, whether you have partners or not.
Negotiation Skills: A good negotiator knows that both sides have to win. If you manage to drive through your point in such a way that you completely win, you will both lose eventually, especially if you are negotiating with a partner. If you are on your own, you decide on a course of action and do it. With a partner, you have to get him or her to agree, to come around to your way of thinking. And if you’re smart, you will not only talk, but listen. Consider the startling possibility that your partner may have a better idea.
Courtesy: Notice how the simple courtesies of life make the day much better. When someone holds a door for you, you automatically say “thank you.” When you wave another motorist on to merge in front of you, he or she will wave back a thanks . We do this all the time with strangers, but we often forget to be courteous to those who are close. Your partner should constantly hear from you “please” and “thank you.” So should your employees! Close proximity breeds a familiarity that doesn’t often allow for the courtesies that you would extend to an outsider. Courtesies that you give have a way of coming back to you in a pleasant way. (Note: this includes the partnership of marriage! )
Praise: People love to be praised, and so does your partner. What happens when people are praised? They tend to like the person praising them. Do you want your partner to like you? Give praise when it is due. It will repay you dearly. But praise without sincerity can look like something else: manipulation. We have all encountered people who lavish so much praise that it makes you wonder what’s up.
Patience: Do not allow yourself to get “plugged in” by something your partner does, even though it may well deserve your upset. Here you must exercise a great amount of skill in short-circuiting your anger and, if you do, you will keep the partnership healthy; but if you don’t, irreparable damage can occur, your plans can be wrecked, your old friendship ruined, and your business in a shambles; all because you chose to pop off when you should have shut up. Knowing when to shut up is one of life’s most neglected skills. A burst of negative emotion can linger for years, or forever, and will hold its power long after the reason for the outburst is forgotten. The most painful thing in the world is having somebody jump down your throat. Just shut up!
Openness: Invariably your partner will come up with an idea or will do something with which you completely disagree. Go a step beyond patience. Calm reflection, best done overnight, may result in a morning discovery—that your partner really had a good idea after all. When your partner comes up with an idea, especially if he or she is enthusiastic about it, the most relationship-damaging thing you can do is shoot it down. We have all experienced dumb ideas, whether from a partner, an employee, or a fellow board member. The way to handle a dumb idea, especially when coming from a partner, is to ask questions. This will give you information to discuss the next day (no, not on the spot). You can then jot down a few more questions and be prepared to have an adult discussion. By the next day, your partner may have realized the idea was dumb—without your having to say so.
Honesty: Don’t let something fester. At an appropriate time, schedule a meeting with your partner to express your concern. Thomas Jefferson said, “Honesty is the first chapter of the book of wisdom.” If you think your partner’s plans for a three-week vacation during a very busy time is not a good idea, you need to be honest and say so. As with all good communication, begin with questions. For example, “Do you think our staff can do without you during that time?” If you aren’t out in the open about things, problems will become sublimated into your subconscious list of negatives, and eventually you will begin to resent your partner—all because you weren’t open to begin with. The late political writer William Safire was once asked if he thought that poor communication was caused by ignorance or apathy. “I don’t know, and I don’t care,” said Safire. His humor made the point. Both ignorance and apathy can kill honest communication.
Trust: Trust is often thought of as a result of something. “Let me see if I can trust this guy based on what he does.” Trust is also a decision , a decision on your part that you will trust your partner as a default way of thinking. Negative interpretations of something can lead to paranoia which, in turn, reinforces negative interpretations. I am not talking about putting on blinders and failing to pay attention to what is going on. The trustees of Orange County, California, put unwavering trust in the county treasurer. He invested county funds in financial derivatives, and he turned the once wealthy Orange County into an economic basket case. Trust is an important dimension to your relationship with your partner, but trust includes realistic thinking. But trust should never trump common sense, and if you find that you cannot trust your partner, it’s time to start thinking about winding up the partnership rather than labor on constantly looking over your shoulder.
Respect: Show respect for your partner even when out of earshot. Never criticize your partner in front of other employees. If an employee comes to you and says, “Joe did it again,” take time to get a detailed explanation, without taking sides with the employee, and end it by saying that you will speak with Joe about the issue. Also show respect for your partner when you go home and review the day with your spouse. Show respect, and it will be returned to you. Don’t show it, and the insult will breed like a virus.
Keep Yourself and Your Partner Trained: Only an outside influence can change adult behavior. Outside influence, means a professional trainer, coach or consultant. Many businesses, especially small ones, overlook the importance of keeping management trained, including you. If you practice the skills discussed in this article, wouldn’t it be nice if your partner practiced them as well? Too many business owners think that training is something for subordinates and that the owner and other managers can handle the teaching. Big mistake. Training should be a part of your annual budget. Regular management training is essential to the health of any business.
Shared ownership of a business can be easier and more profitable than going it alone. But it takes work to make it happen.
Parts of this article are based on the forthcoming book The APT Principle: The Business Plan That You Carry in Your Head , © 22012 by Russell F. Moran