Don't Rush Into a Long Term Relationship
An awful lot of people want to start businesses and many elect not to go it alone for multiple reasons. The long hours, the burden on the family, the assignment of resources, and finances, are but a small lists of all of the reasons that you might decide against the purely solo entrepreneur route.
Having someone to lean on sounds great, but trying to find a business partner that you can work with for the long term is often a difficult proposition. On the surface it sounds easy, but that's almost always not the case, so just be prepared if you elect to pursue this direction.
Solopreneur + 1 (or More)
A business can only thrive if the partners have a similar vision. If one partner wants one thing and the other something totally opposite, it will become nothing but a shooting match with the business suffering and eventually failing.
If, like me, you’ve found yourself trying to start a business as a result of a corporate downsizing, don’t rush into things, particularly when it involves becoming involved with partners.
In my case, I had a vision of what I was looking to do and found an individual who I thought might be a great fit. On the surface he appeared to have a similar vision and I took him at his word. Little did I know that there were a number of things which were not a fit and would never be a fit.
It was only after working with him in the day-to-day operation of the business that I uncovered our differences. These included such things as the direction of the firm regarding employees, the overall mission of the business, use of family members for company projects, and a significant number of other things.
Perhaps if I had vetted him more thoroughly from the get go, I would have recognized that there were going to be problems and never partnered with him. In my case, I was anxious to get something going. I knew I couldn’t do it myself, and wanted to align myself with someone who I deemed as being as close a fit as possible.
We subsequently brought in a third partner which further exacerbated the situation. The new guy had some great technical skills, but little did I realize that he wasn’t really committed to working with us full-time to grow the firm. He was using his time to learn from us so that he could start and grow a business of his own!
It wasn’t until several months after the fact that I found this out. Our new partner had not only established a small company, but had actually registered as an LLC with an almost identical mission. Perhaps a having a non-compete or NDAin place would have prevented this from occurring, but it’s hard to say.
Avoid Potential Problems
Based on my experience, I recommend that anyone thinking about forming a partnership do the following:
1) Be patient. Don’t jump into a partnership. Take your time and make sure that it is going to be the right thing for you. Do you have the ability to work well with others in such a capacity? Are you better equipped to go it alone?
2) Vett the potential partner as you would the hiring of a C –level employee of a company that you worked for. Check out their backgrounds, recommendations, and anything else that you can uncover about them.
3) Have the potential partner(s) write down what their vision is regarding the company. (You should also do the same.)
- What do they want to do?
- What are their expectations?
- Where do they see the company in 3 months, 6 months, a year?
- What are their thoughts regarding hiring employees versus just having subcontractors?
- What is their position concerning the hiring of family members?
- Are they prepared to develop a neutral position regarding their political and religious beliefs on social media, so that anything they say can’t be considered as a potential negative reflection on the firm?
- How should the finances of the firm be handled?
4) Have potential partners sign NDA’s (non-disclosure agreements) and non-compete agreements, so that any intellectual property and the interests of the firm are protected.
5) Have an advisor in place who can review all of the submittals to make sure that there aren’t any red flags, and that the potential alignment appears to be sound. Your advisor should be someone who won’t sugar coat things and will give you candid advice.
This is critical, as a bad partnership will cause you a great deal of anxiety, lost opportunities, possibly money, and time. Time is something which can never be recovered. It might result in your missing a window of opportunity, or causing you to accelerate the depletion of any type of severance package or savings.
As you evaluate your future direction, I can’t help but emphasize the importance of “Dating and Becoming Engaged” to a Business Partner before your “Marry” them. Go through the entire process. Get engaged and then get married after you’ve taken the steps I’ve outlined above.
Don’t make the same mistake that I did several years ago.
Photo: Jose Rivera on FreeImages.com