Maybe you’re at a point right now where you’re looking at getting into a partnership with someone who’s going to build your business to success with you.
You’re sitting down one morning with your coffee and you think, “Hey, I remember that guy Bobby from the party who was saying we should start that business together. I’m gonna email him right now so we can get started”.
When you’re getting into a business partnership, you’re essentially getting into a marriage. Are you really going to marry someone you just met at a party? Hell no!
I’m gonna fill you in on the good, the bad, and the ugly of business partnerships, and how you can have a successful one.
Know Who You’re Working With
Most partnerships don’t work out because people get into them without understanding the person they’re getting involved with.
You’re not just investing in that person’s skills, you’re investing in who they are—their baggage, their friends, their family, their habits, everything. And if you’re not willing to work with their background, your partnership is going to fail.
Craig and I became business partners in late 2009 through the Info Mastermind Group, but before then, we’d already known each other for two years.
And during those first couple of years, we would spend 2 whole days together 3 times a year. I got to see the good, the bad, and the ugly of Craig.
From there, I was able to make the decision of “Is this someone I want to run my business with?” and vice versa for Craig. Obviously, it worked out.
Don’t just rely on your own intuition, reach out to others in that person’s professional circle and ask them what they’re like on a working level.
Are they reliable? Do they have follow through? Are they trustworthy? Will they promise a unicorn but deliver a donkey?
Have that adult conversation and find out the nitty gritty of your possible business partner. Remember, this is like a marriage. You can’t just wing it.
Look At What Value The Other Person Brings
When Craig and I first started, I knew I wanted to create the Info Mastermind Group. But at the time, I was coaching and consulting personal trainers.
I already had an info business of my own, but what I didn’t have was any other people in the info space as resources.
Craig was one of my few clients who had an online info business. His value to me was that not only was he extremely structured and disciplined, but he was connected to professionals in the info space I wasn’t connected to yet.
In terms of skill set, you need to find someone who’s strong where you are weak.
At the time, I was the guy who knew how to work the stage and had traffic buying experience, while Craig was more functional in the disciplines of building an online business.
We’ve mastered our strengths, and brought them together so that now, we’re strong in every area.
You want to find someone who can help you multiply the impact you want to have.
Don’t use a partnership as an excuse to avoid decision making. A lot of first-time entrepreneurs embarking on their new venture are usually scared, insecure, and nervous.
Having a partner makes them feel like they have a buoy to hang onto when it comes to making the big decisions.
They’re afraid of screwing up, so they want someone to mitigate the risk with. Don’t fall into this trap! Find someone to dominate with you, not depend on you to handle everything, or vice versa.
Write a Partnership Agreement
One extremely important thing you need to have when starting this venture is to create a partnership agreement that clearly lists what each person is responsible for, and what their expectations are.
You gotta set it up like “Bedros is gonna do X, Y, and Z, and Craig is gonna do A, B, and C”.
I was in a partnership where we had no agreement documented, and we were put in a position where we both wanted to do the big exciting stuff, but no one wanted to do the tedious stuff.
Of course there’s going to be overlap with responsibilities, but you need a set of core expectations to keep each other in line with the same vision and path.
Partnerships work best when the work and profit is split 50/50. If it’s not, sooner or later someone is going to build resentment.
If it starts at 50/50, and then moves to 60/40, the person on the short end is gonna be like “Hey wait a second, I’m doing just as much work, why am I getting less benefit?”
Unless it’s clearly stated in the agreement you’ve written, 50/50 is the fairest way to go about a partnership.
But hey, even though you own 50% of the company, work like you own 100%.
You should be constantly trying to outdo your partner. Not in a “I’m better than you” way, but so that you both are striving for greatness and maximizing the success of your business.
Ending Your Partnership
Now let’s say you’ve come to realize you and your partner don’t work together well, and it’s causing a strain in your relationship and business.
How can you dissolve the partnership without ruining friendships or destroying the company?
Clearly write out the steps to take in your partnership agreement in the event you need to part ways.
Give a time frame for how long the process will take, disclose if the attorney will be involved, whatever you need to include to have a clean break.
And if you don’t have a written agreement in your partnership, complete with a plan in place to split if necessary, it’s not too late to start one!
Another route you can go is to hire someone on your behalf to negotiate the dissolving of the partnership. That way, there’s no emotions involved in case you want to maintain a friendship with that person.
Business partnerships should be looked at as a lifelong commitment – you don’t want to take this lightly.
When you get into these partnerships, you need to be thinking “I want someone who’s going to help me grow my business to massive success”.
Communicate, be patient, document everything, and work like you own 100% of the company.
That, my friends, is how you run a successful business partnership.
Check out Craig and I’s full podcast where we discuss the ups and downs of business partnerships here.