To take on a partner or not? To work with a friend or not? To get into business with family? Could I work with my spouse?
I have mixed feelings on business partnerships. I work with my spouse. Yet we learned from practically day one to draw firm boundaries between business tasks and it’s still challenging. My father is partnered with not 1 but 2 brothers. It certainly has made for a few screaming matches over the years, yet for better or worse they continue to make it work.
As a business coach, I hear difficult stories of business partners separating. People might share with me how they felt “screwed over” from a former partner. The bitterness is raw … the scars real … the feelings resembling divorce. Working with partnered businesses, I find myself using much more emotional energy while coaching. It’s not just running the numbers, it’s addressing past feelings, it’s re-defining roles and job descriptions after those roles have already taken on a life of their own. And those business lives include resentment, loss of trust, and hurt feelings. It’s no easy task to make changes within business partnerships.
I was at a seminar for the organization Michigan Women Forward and one of the women who has had a great deal of entrepreneur success seemed to be bruised, maybe scarred from a business relationship that didn’t go as hoped. I’m paraphrasing, but my understanding was that this partner was able to finance a next level of her business that was unbelievable. The yes was easy and an explosion, including franchises followed. The woman said, “We grew too fast.” And her advice for this room full of budding entrepreneurs was that when a partnership opportunity presents itself, “PAUSE. Go hang out at their business for a week or more. Pay attention to their integrity and how they work. What does their current staff think of them? Don’t rush … You are getting into a marriage, in fact, your business relationship can be at times, bigger than your marriage. You don’t want to get it wrong.”
I’m writing about this because the economy is good and with the popularity of the television show, “Shark Tank,” money is out there. Business owners are looking to invest in other businesses. Retirees are looking to invest. Groups are getting together to become ‘angel investors’ and developing funds. It’s not unbelievable that an opportunity that seems ‘too good to pass up’ could arrive.
Before you leap… Is a project possible first? Before you start signing IRS forms, is there a way to test drive a business partnership? Is there a way to become mutual contractors and market yourselves together but not actually share money, taxes, and liabilities?
There has got to be a project that you can do together as a test drive. Is this person as like-minded as they appear? Knee deep into a specialty run of your invention will tell you that answer before you give over 20 percent of your company. If you are a service-based professional, work on an educational seminar together, do you have the same philosophies as lawyers, financial advisers, coaches, you name your profession…
I see so many clients complicate their momentum just as it starts. Often the best Return on Investment is continuing to perfect the current stage of their business before heading into the next growth spurt. Should you be a bit more patient before taking on someone else’s money? I see entrepreneurs take on an investor out of sheer fear that another one won’t show up in 6 months. Or a year. If your business is meant to grow and you continue to build on what is working, another investment opportunity will be there in perfect time. How can it not be?