Partnerships – To Be Or Not To Be
Written by: Nikki McGoohan, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
My client John had been friends with Ben for about 5yrs when they decided to go into a car dealership together. Initially, all was well but after the first couple of years, the cracks began to show. The last straw was when one of the salespeople had been underperforming and Ben sacked him without speaking to John first, suddenly they found themselves in receipt of a solicitor’s letter. An argument followed which didn’t end well.
I was curious as to how they had decided to start a business together in the first place and what discussions they had around it. When starting a new business, the main focus, as with John and Ben, is usually on getting the business up and running. You are busy getting your finances in place, maybe you need an office, equipment, etc but how many people sit down and discuss the actual relationship and how it is going to work.
Partnerships are formed in many ways, maybe you joined a Doctor’s or Accountancy practice and have been made a partner or a parent has retired and you are taking their place. Joining a partnership as a junior partner or with someone who has been in business and leading the business for years has its challenges.
So, do I think they are a bad idea, the answer is no but I do think you need to go into them fully informed and after having open and honest conversations around both your expectations and vision for the business? From working with John and previous clients below are some questions I believe you need to ask yourselves if you are considering starting a partnership or joining one.
1. What is the vision for the business, and where do you see it in the future?
If you both were to answer this question separately would your answers, be aligned? If not where are the commonalities and are the differences something that you can overcome? It is important you just don't agree to something for the sake of not wanting to upset the other person, continuing will only bring hardship in the future.
2. Do you trust each other?
If the answer is no, well say no more.
3. Where is “our line” and what happens when it is called into question?
What are the things that you won’t compromise on, such as accepting certain behaviors from yourselves and others that call into question your integrity?
4. How will decisions be made especially when you have opposing views.
We are all different and the world would be a very uninteresting place if we were all the same, we just need to be able to listen to each other’s point of view to understand where they are coming from and vice versa and be open to looking at our next best alternative. We must be consistent in our decision making especially as the business grows and more people join the business.
5. Do you understand the legal and compliance regulations around your business?
If there are any issues around this it is not acceptable to say you did not know, that “ignorance is not bliss”. Whilst the administration side of things may be left to one partner you need to be aware of where the business stands and if you don't understand the information being provided, seek guidance.
6. Do you need to have a legal agreement?
This is a line I use a lot, “nothing is a problem until it becomes one”. When things are going well and there are no issues it is hard to see how you could end up in a situation where you are not communicating effectively with each other or there are ill feelings. It is easier to have an agreement in place to deal with issues from the start such as if something happens to one partner what will happen if a time comes that you can no longer work together or you just simply wish to go your separate ways. When we get stuck in our positions it can be hard to move so having an agreement in place will help us take the steps needed.
“Just one great partnership with the right person can have an incredible impact on our business success” –Janine Ogg and Jo Foster.
The above is not intended to discourage you from entering into a partnership but the opposite, enabling you to ensure its success. As with everything, the more prepared we are, we are in a better position to have those conversations around these topics and hopefully not have to deal with them in the future.
Nikki McGoohan, Executive Contributor Brainz Magazine
Nikki McGoohan is the Director of Propel 2Gether Ltd where she works with organizations at various stages of their growth and development in the areas of business mentoring, executive and personal coaching, and training. Nikki has experience in management and general business acumen which helps her to understand the dynamics, complexities, and challenges of SME’s and the individuals who lead them. Through collaboration and listening to understand their businesses, she can assist them to identify the current issues they are experiencing, evaluate them and together develop a roadmap to move forward in a way that is true to their vision.
