So you’re talking to your best friend of 10 years, and you have both recently read about the hot new roller derby franchise concept where people can live out their derby dreams for a day. You agree it would be much better than your high-paying corporate jobs, and your family, friends and former colleagues would all be your first customers. Of course, this relationship is one that maintains a high level a trust, and you’re both business stars, making a solid business team. You quit your jobs, buy the franchise, and a year later are so angry with each other you get into a brawl out on the roller derby track in front of all your customers and employees. To add insult to injury, your business is in the red. Perhaps this example is a bit extreme, so let’s look at another.
You’ve recently met somebody through a business networking group. You both talked about looking for an investment and franchising was of interest. You go to coffee and, after reviewing one another’s resumes, decide you have perfectly complimentary business skills. So you begin reviewing franchise concepts together and find a solidly performing moving franchise. You pick this franchise after weighing the pros and cons of each concept you’ve selected. Eventually you draw up a business plan and get awarded a franchise. A year later you’re both about to lawyer up and devise a plan to buy the other out. You can’t keep staff, and you step on each other’s toes constantly. Finally you decide you really annoy each other.
While there is some hyperbole here, situations like this do happen. I’ve seen them. Throw in more than two people, and it gets beyond interesting when things get tough. It doesn’t matter how well or how little you know your business partner(s). What matters is why you are going into partnership to begin with and how you structure it. I won’t get into legal structure here. Rather, I am focused on the structure created when people understand their respective roles in the partnership. It’s basic psychology!
While in both situations above, the partners made an attempt at figuring out why they should be partners; it was cursory. They were excited about franchising concepts and a new business opportunity without defining the overall goals of the partnership. In any business partnership discussion, you need a meeting of the minds relative to the goals of pursuing something together versus doing it solo. This can be a tough conversation, especially if you are dealing with partners that are family or friends, but if you don’t assess in detail the merits and goals of the partnership and subsequently get lost in the financial opportunity, you’ll likely wind up on very different pages. You’re not individuals running a business; a partnership creates a “we.” And, if you don’t know your partner personally, you may need to spend a little more time getting acquainted. I’m not saying you need to be friends in a business partnership, but you must understand how your partner operates in life because you may be spending a lot of time together, at least as a longer-term colleague. In addition to the “why”, you need to understand the “how” of the partnership.
I can’t think of a single personality type that is completely comfortable with uncertainty in a work environment. Professionals function more optimally when they know what it is they are supposed to bring to the table and what is to be accomplished. While it may be fun to have some chaos and change in business, it’s best to keep it there and not in your partnership.
After figuring out the partnership and business goals, partners need to figure out what roles and responsibilities each possess in order to achieve success. There also needs to be constant, honest communication on how each is doing toward achieving the company’s goals.
This also impacts your team greatly. The team belongs to the partners, even if one partner has more of a day-to-day role with team members. Teams also thrive when they know their respective roles and responsibilities and what success looks like. The partnership needs to lead by being an example of clarity and consistency. And if one partner is suddenly pulled into a different direction by personal matters, or you feel the partnership is no longer working, a proper plan at the onset will guide you as to what should be done. Let’s get back to the positive.
Partnerships in business can be incredibly dynamic, value-laden structures that support greater success which you or me alone could not achieve. Keep in mind if you add additional partners, you still have to figure out the why and how; it just becomes more complex. However, the tradeoff is you give yourself to the partnership (or you should!) and give up autonomy in decision-making and function. You are also betting on your partner(s) to bring their A game and contribute like they said they would. If you spend more time at the front end figuring out whether this is the right path, you are more likely to achieve what you are going after. And you’ll certainly enjoy the journey all the more.