Last week when Mike mentioned how much he loves having a business partner and I couldn’t help but think about the other side here. Mike and his partner have gotten along well, set goals, kept each other focused, and hustled to grow their online company to be very successful. Is this success a guarantee? Will every business partnership be as successful? I really don’t think so to be honest.
If you watched The Social Network or heard any stories from personal experience you may be thinking that a business partner might not work out for you and your business model. The following post will examine the dark side of a business partner and what you need to watch out for:
What are the chances that two unique individuals will have the same goals over an extended period of time? One of the partners could be more interested in making money with the business while the other partner views it as a profitable hobby. Goals also change over time. As the business grows, so do the two partners involved. Once some time has passed, one of you may start to view objectives differently. It’s surprising how much goals and views can change over time. The scary thought is that you both might want to go in totally different directions with the business.
We as human beings have our moments of greed. Even the kindest and friendliest folks will feel a strong sense of greed at some point. I’m not here to be cynical, I just want to be realistic. Just because you go into business with a good friend it doesn’t mean that you’re completely protected. It’s always advisable that you get everything down in writing and that a third party is witness. You just never know when greed can become a factor in the business partnership.
What if you realize after 6 months that you’re up late at night working on the company while your partner is out drinking with friends? Some of us enjoy working long hours and putting in effort. Others place more value on their relationships in life and would rather only spend a few hours on work here and there. This can become a major issue. I personally am very productive in the middle of the night (you can ask Mike) and then I might sleep in during the morning. How would this work out with a partner that’s a morning person? One of us might get frustrated.
The next issue revolves around deciding what to do when one of the business partners isn’t working as hard. Do you pay that person less? What if they don’t agree to a pay cut? For me there’s endless questions that go along with the work load in a business partnership. This is a major issue that you need to decide on as you and your business partner put your plan together.
When your business is making no money the decisions are pretty straight forward. At that point the both of you are just excited about growing the company. All you can both think about is the idea of your business hitting it big one day. What happens when large contracts and colossal clients come your way? I’m thinking that the decision making process will drastically change at this point. One partner might want to expand while the other business partner is more conservative. Decision making can also get awkward when a boss-employee relationship starts to slowly form between the business partners. How will you make business decisions with your future partner?
The two business partners might get along well when together, but anything can happen once external forces get involved. What if one of the partners ends up in a relationship with a controlling person? What if one of the partners wants to bring in a third person into the business? My concern with dual business owners is what happens when third parties get involved and start trying to get some input on the business and the future direction.
Leaving the business is a topic that nobody wants to discuss. The reality is that at one point many other opportunities will come along. A potential buyer can get involved. A new business venture will come along. The work load of the business can become too tedious and one of the partners might want to get out. What will the exit strategy be? How will the two of you decide on exiting the business?
Mike has listed the benefits of a business partner and I have now listed the negatives. I hope that I didn’t come off as overly cynical. I just wanted to go over the realities that most people try to avoid thinking about. Where do you stand on this idea?
(photo credit: idf-fotos)
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