You have your great business idea. You’ve decided to find yourself a partner, and you’ve gone to all the necessary trouble to choose the right one. Now comes the hard part: continuing your great partnership beyond the perfect new relationship and honeymoon stages. Much like a marriage, this has to be someone who you can see yourself sticking with in the long run; who you’ll help through the hard times (bad business decisions) and not cheat you out of your half in the good times (when you’re the next big thing.)
While it would be ideal for your business to be so great you’re both set for life, you need to be prepared if it isn’t. You need a pre-nup (or written contract), you need to clearly decide who does what around the house (or office) and you need to be ready to avoid things turning ugly if either of you decide you want a divorce (to walk away due to personal reasons or some other change in circumstance.)
So, what are some of the ways you can ensure that your partnership ends with "happily ever after" rather than a juicy front-page story for the tabloids reporting about "business partner kills partner" or "Happy Ltd’s happiness was limited"? It isn’t as hard as you might be thinking, though all of these tips come with one big warning: you can never truly tell how well you’ll get along with someone, or how well your business will do, until you try.
1. Define Your Vision and Mission
Your business isn’t going to get very far if you’re both working towards different things. Take the time to discuss exactly what your founding principles are and what you’re setting out to do: it doesn’t matter if you’re doing it for different reasons, but you need to agree on how you’re going to get there and what goals you’re going to achieve on the way.
Once you have this written down as a mission statement, you will both be able to trust that you want the same thing and refer to it each time you’re about to make a major decision that could change things. If it’s going to cause a major change, how should the mission statement be altered?
Businesses are as unpredictable as people, which is why you need to be prepared but also have the flexibility to adjust. Get everything in writing - you might be friends who want to agree everything with a handshake, but business should come before friendship. You should have an exit strategy ready from the start, and plans for when you succeed and when you fail. Have a lawyer who checks what you’re agreeing to and helps you make any necessary changes.
2. Know How You're Going to Achieve Your Mission
People are different. They’re motivated by different things, they work in different ways, and they have different strengths. And there’s nothing wrong with that - it’s actually better to partner with someone who complements you than someone who’s so similar that you need twice as much outside help. What you do need to do, however, is make sure that each partner is using their strengths, each partner is pulling their weight, and each partner is satisfied that they’re meeting their expectations. Be aware of each other’s prior commitments; if one partner has a family, then they will need to work fewer hours, but as long as they’re still working hard when they can that doesn’t need to be a problem.
You need to decide what your goals are as a company, and then break them down into smaller goals; these smaller goals should be evenly divided between you so that each of you is accountable for those that best fit your areas of expertise. The more a partner gets to use their strengths and their interests, the more they will be motivated to do well and get creative with their ideas.
Similarly, your job roles should be clearly defined. Consider all the different roles that will go into making your business a success and clarify exactly what that job description is. Hire someone for any roles you can’t fill; you might think you can’t afford an accountant, but you definitely can’t afford the money problems you’ll have later if you’re both bad with finances. Before you think offering them a partnership might be cheaper than hiring them, wait: what about an independent contractor? Are you both happy to split your profits with another person?
3. Don't Avoid the Hard Decisions
Your vision might be to have a great company with many employees and the money rolling in. One day you might have that, but right now it’s the two of you and you need to stick together long enough to make it happen.
Decide whether you’ll have weekly or monthly meetings. These should be meetings where either of you can feel free to say that there’s something you dislike about what the other is doing, where you can look at and tweak your mission, or where you can have healthy disagreements. Don’t imagine that there will be no arguments; but don’t worry, it can actually be a good thing for the business, as long as you keep it productive.
When you discuss who to hire, be wary of hiring friends and family - especially if they’re the friends and family of only one of you. Either make sure there’s a fair mix or try to stick to strangers: if most of your hires are related to Partner A, things won’t look too good for Partner B, if things go wrong.
Be prepared. How are you going to split your profits? Before you say "50/50", consider that it can be beneficial to have a 60/40 or 70/30 partnership so that one partner is more accountable. If things go well, how will you manage the transition into a bigger company with more employees and more work? If things don’t go well, what is your procedure for one of you leaving or both of you closing the business?
4. Remember That Business Comes First
Even if you’re the best of friends, going into business together isn’t necessarily the best idea: you might know when they lost their first baby tooth, but do you know anything about their business sense? The bad news is that many friendships that become business partnerships often end with the two people ending their friendship.
One option is to do what you can to test each other out first; take on smaller projects together and see how it goes. Spend time getting to know each other and finding out if you are two people whose values and ethics align. Put on your business cap and actually look into each other’s history as an employee; are there any red flags that need explaining before you put all your trust in this person?
Alternatively, a more long term option is to start two separate businesses and merge them once they are successful. Baskin-Robbins started life as two brothers-in-law, with six ice cream stores between them before they decided to make the leap and combine them; it was Baskin’s father who warned them not to go straight into business together, and look how well it turned out because of the shared history they had. They had also discovered that each of them was capable of standing on their own, which meant that their partnership could be equal rather than co-dependent.
For a business partnership to have the best chance at success, both partners need to feel like equals who are using their individual strengths and expertise to move towards their shared vision of success. They know that they’re going to have disagreements along the way but they have systems in place to deal with them- making them stronger rather than tearing them apart. Business needs to come before friendship in order to succeed, but business partners do still need to be the best of friends; friends who complement (and compliment) each other.
Is your business partner your best friend? Maybe they’re your husband or wife? How do you make things work? Let us know in the comments section below.