After last week's piece on the pros and cons of working with a business partner/partners, you might be wondering if the business partner you chose was the one. Or, in the case that you've already found a potential partner(s), how you go about evaluating whether or not your match is going to make good business sense.
Lauren and I often get asked for advice related to finding a solid working partnership like ours, or tips for getting along with a business partner. For years I responded to people's queries by shrugging my shoulders and musing that I just got lucky.
However, as we were doing some long range planning for the business and took a few moments to just thank each other for being such truly supportive, trustworthy and excellent business partners, I found myself finally able to see a bit of the concrete steps we took to get here.
This seems obvious I know, but often partnerships are formed around an innovation, idea or concept and in the rush to bring that spark of excitement to fruition people forget to stop and figure out what their philosophies about work are.
Lauren and I really lucked out this one. We had been working together when we decided to start our company. We saw each other at work and were able to observe details like how each of us treated clients, that each of us showed up to work on time, that we both got our work done on time, were pro-active and interested in learning on the job/expanding our horizons.
All things that seem like no-brainers but which you really need, make sure you agree on them before you sign a partnership agreement together. Honestly, we never really took an inventory of these qualities when we decided to start a company together in any conscious way, but you can bet your last dime that we had both subconsciously put a big check mark next to each of these qualities on the list.
You’re not always going to have a chance to work with your potential candidate for business partnering ahead of time like we did. Don’t be afraid to provide each other with references and check them. Seriously. This is a big deal and worth the time, effort and a little bit of potential awkwardness up front.
Like pretty much exactly the same thing like salary, benefit ranges, work hours and working with the same kinds of clients. And where there were differences, we were able to list out the different things each of us wanted to do/wanted out of work and both fit into the picture of one common company.
The stakes not being super high in the early days (my rent was $350/month and we kept our start-up costs almost laughably low by “renting” space in the corner of Lauren’s bedroom) meant we had time and space to figure out how to form a comfortable working relationship with one another without serious pressure coming from our financial or personal commitments.
Outside pressures placed on a business relationship when both or one party has serious mortgage payments to meet, a family to feed or a fancy lifestyle to support, well that pressure is going to put more strain on a business relationship.
Does this mean I don’t think you should get into a business partnership if you’ve got serious personal commitments? No. Not at all. But you do want to make sure you feel really comfortable working out the tough stuff with this person before you go in and that you both understand what each partner potentially has to lose if things go really sour.
And frankly we still do. When we looked at the viability of starting a business together it took us about five minutes after the day dreaming about the fun and exciting stuff to start making a list of the big bad “what ifs.”
We both threw in all the worst case scenarios we could think of. Most of them had to do with money. I think it was a really important step in establishing trust between us.
We looked at the worst case scenario(s) head on, and decided we were comfortable getting there together. We also had an agreement in there about when we would get out again, together if they came to be. We knew exactly where each of us stood and shared a common breaking point.
It’s not all doom and gloom running a business. And what you do with hard earned surplus cash, fame or fortune is also something you need to make sure all parties agree to.
We both knew what we wanted to do with extra money that came in and how we’d prioritize spending it. First on salaries, then on hardware upgrades, nicer offices eventually and all the while making sure money was being invested back into the company.
If Lauren had had a secret dream to start leasing a company Hummer with our logo emblazoned on the hood as soon as we had the extra cash then there may have had to be a throw down. Fortunately, we had a plan for what to do when the good times came rolling by as well.
Ok so this one is totally airy fairy and frankly that gut of mine has been known to be wrong before on at least one occasion. Still, no where in the process of starting a business with Lauren did I have a second thought. Not once. Not twice. Not ever.
Because of all the factors I’ve listed above, I really did just roll with it and jumped in with both feet and a huge smile on my face. I didn’t have any late nights wondering if I was making the right decision, or worrisome nagging feelings telling me to maybe put the brakes on things and re-evaluate. This was definitely one of those instances where my instincts served me well.
Do you have anything to add to this list? Criteria you used to evaluate your business partner before you signed on the dotted line? Or things you wish you’d thought of before you jumped into business together? I’d love to hear’em.
