Business partners: Who can make or break your start-up

TWO MEN AND A TRUCK franchise partners

Written by Charles Staky

Before buying into a business, an entrepreneur has to ask themselves a few questions. What industry do they have experience in? What industry are they interested in? Where do they want to start their roots? Do they want to buy into a franchise system or make a name for themselves? One question that can have the largest impact, however, is if they want to involve a partner?

A partner can alleviate a lot of stress for a business owner, but if they are not a good duo, a partner can also make the situation a nightmare. Entering into a business partnership is very similar to a marriage, once you sign the dotted line you are with them for better or worse, for richer or poorer. And breaking up can be very costly. You wouldn’t marry someone without getting to know them first, so the same time and effort should be put into getting to know your business partner.

The comparison of a business partnership to marriage, as cliché as it may be, holds true in the sense that once it is official you will be sharing finances, future planning, and your reputation with another person. If you don’t give ample time or thought to finding the right person for this, the partnership will not work out as you want it to. Before making the partnership official there are a few ways in which you should get to know your partner to make sure the two of you will be successful.

First and foremost you need to ask yourself what you are looking for in a business partner. Financial assistance, expertise in the field, or someone to share the workload, all are important traits to look for in a partner.

Entrepreneur.com recommends looking for a partner who brings something different to the table than you do, whether that be access to the market or a little creativity to balance out your detail-oriented work ethic. Your partner should add value to the relationship, preferably in areas that you may not have the most knowledge. If they don’t seem to bring something new and useful to the table, they may not be the best candidate.

Another detail you should look for in a potential partner is how they spend their money. While finances tend to be a touchy subject for most people, you will be sharing every financial responsibility with this parson, so you’ll want to know where they stand before giving them access to your checkbook.

“Someone who has hefty, outstanding financial obligations, an unreasonably low credit score, or is obviously living beyond their means is probably not someone you want to trust with the financials of a future business,” says icn.com in their article Know Your Business Partner Well. Very, Very Well.

You don’t want your future partner spending money you don’t have on things your business doesn’t need, and on the other hand, you don’t want someone who isn’t willing to spend necessary money to grow your business. You have a certain level of comfortability with how you would like to run your finances and it is important to find a partner who is respectful of that.  After all, in this partnership you will be sharing the finances equally, weather you are splitting profit or paying off debt.

Long-term goals are also important. What do they want out of this partnership and the business? It is important to know that a potential partner is just as passionate in your venture as you are. If they’re working to achieve the same level of success as you, they will be willing to stick with it and work through the hard times, not just give up if the profit doesn’t flow in as expected.

The answers to all these questions are crucial to share with your potential partner before you can successfully run a business together. Honesty and communication are essential to building a relationship of any kind. In a formal partnership you will share everything, both good and bad, that comes out of your business and you will have to trust your partner is doing everything they can to pull their weight. You need to know how they will handle stressful situations and also how they will handle success. You will need to know everything about them because, let’s be honest, they will be one of the most important people in your life, hopefully long term.

At TWO MEN AND A TRUCK® we are lucky to have a number of franchisee partnerships who successfully make it work, including college fraternity brothers turned franchisees and those in business with their spouse.

“Since we have known each other, if we are going to put in effort at doing something, we are going to invest our entire effort into its success,” said multiunit franchisee Mark Snyir of his partnership with Chad Arnold. “Growing those professional bonds with like-minded people helps to develop and strengthen personal relationships with them.”

If you take the proper time to understand your potential partner and how they will handle the responsibilities of running a business, you can ensure they are the right fit. The last thing you want to do is get caught up in the excitement of your new business with the first person who shares your excitement, without knowing much about them. Time and communication is needed to build a strong relationship, and before you trust a potential partner completely, there should be no thought of entering a business partnership.

TWO MEN AND A TRUCK® is the first and largest franchised moving company. Let us move your career forward. Consider investing in us and becoming a franchisee today! Visit franchise.twomenandatruck.com to learn more.

There’s no you or me in we: Building a franchising business partnership for the right reasons

Business PartnershipSo 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!

Business PartnersWhile 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.