A perpetual debate among small business owners is the wisdom of having a partner. As a practical matter, if you can do it yourself, you are probably best to do just that – you are accountable only to yourself at the end of the day. But occasionally, whether for financial or operational reasons, one person cannot undertake the business by himself. Having observed a number of business partnerships, good and bad, it seems that the key to a successful partnership is to be a good partner.
Ben and Jerry, of ice cream fame, present a great example of an extremely successful partnership. As Jerry explains, the key to the success of their partnership was their willingness to let the other have his way if the person felt strongly about a matter. He tells a story about how Ben wanted any additions to the ice cream, such as chocolate, cookie dough, etc., to be larger than most. Jerry, who was responsible for actually making the ice cream, disagreed as it would make his job more difficult. However, Ben was so adamant regarding the issue that Jerry consented. The rest, as they say, is history.
Any partnership that lasts for a period of time will inevitably be faced with a number of issues beyond operating the business. For example, one partner may have health or family issues that prevent him or her from carrying their share of the load for a while. As a member of a very successful, 20 year partnership once said, the key to their successful relationship was not “keeping score.”
And therein lies the key to a successful business partnership – each partner must be willing to be a good partner. That doesn’t mean allowing yourself to be abused, but it does mean having a level of trust and respect for your partner. You cannot simply expect others to abide by your desires; at its core, a partnership is a relationship and has many of the same issues encountered in any relationship.
A number of people claim that there is no such thing as a good partnership. More often than not, the person making the claim would not make a good partner. And for them, the statement is true.
In these trying economic times, business owners may be faced with the prospects for taking on new partners or investors. However, no matter how attractive the opportunity may appear, experience has shown that there are no good deals with bad partners. Before getting into business with another person, think about how you – and the other person – would be as a partner – are you willing to accept another‘s decision in certain aspects of the business, or must every decision be to your liking?
And by all means, if you do go into a partnership don’t forget to document your agreement. Issues such as management, voting, whether or when capital contributions are to be made, how to deal with a partner who dies or no longer wants to be involved in the business, and the ever important issue of what happens when the parties just can’t get along, need to be addressed upfront. While no one wants to refer to an agreement every day for guidance in decision-making, in the event of a fallout or dispute the first place to look is the parties’ agreement. If you have not documented your agreement, you may find yourself stuck in a bad partnership.
Robert Nicholson