When you are starting a new business, you are always in two minds in starting a business with a partner or starting without one to share your burden.
There are advantages disadvantages of a partnership business.
On one hand, I have had startups/businesses where I was a partner which closed due to the stupidity of partners. On the other hand, my ever-reliable source of income, my sole business which has survived all storms (and is going from strength to strength) has a business partner, who undoubtedly has outshined all my achievements in last few years.
How did I find a business partner?
Well! I went out on the road looking for a business partner holding a board which reads “Need a Business Partner who can work for food”. 🙂
Jokes Apart. There is definitely an advantage of the partnership business. Life in a partnership business is not as gloomy or dark as they show you. Provided, you do not have a mean guy screwing your happiness every day.
Which brings us to the inevitable question. Do you need a business partner?
When we start a business, this question puts us in a difficult state of mind.
Disadvantages of having a business partner:
As per statistics, 80% of partnership businesses fail.
Why start with a negative thought Mr. Blogger?
Well, sir! It always helps to list the negatives before positive. Starting a business does need us to be as positive as the word B+”.(bad joke)
Anyways, I am just trying to keep you out of the “feel good” cause which makes us complacent and blinds us to the obvious mistakes we can easily avoid.
Gyan aside. Getting back to the topic.
I meet a lot of business owners who closed a successful business because they could not get along well with their business partners.
The other day, I met a business owner who was ready to struggle alone and spend double the time learning the tricks of the trade than get a business partner.
He had burnt his fingers not once but twice in earlier ventures with business partners.
As they say “Once bitten twice shy”.
What leads to conflicts between business partners?
Money. Ego. Lack of clarity of thought. Different business vision. Trust issues.
The list is endless.
You know what I hear most from business owners with partners?
The screw ups of another partner.
The smartest of business partners have stories to tell. Stories where they accuse the other partner of bringing down the business.
I rarely meet “the diplomatic” kinds.
I ask the business owners, why they do not let out this frustration in front of their partners?
I mean, why not go and talk straight with your business partner than wash the dirty linen in front of a third person?
Most of them are afraid to speak. Others, do not have the comfort level with their partner to discuss and the rest?
Well, they are just waiting for the business to shut.
Since everyone has equally contributed to the failure. How about we let the ship sink peacefully.
No one wants to rock the boat.
Summing it all up in one line “without a business partner, You are the one responsible for your own shit. It’s your business and you do not have to blame anyone else for your mistakes”.
No harm in “Ekla Chalo re”.
Pros of having a Business Partner:
The benefits of partnership business are no less than the disadvantages listed above.
Here is a real life example of how my partner saved our sinking boat when the chips were down for our IT Service business.
Our IT services business snow divided a few years back when one of our “High Paying” Client ran out of money.
He contributed to 70% of our revenue. I know, we forgot the fundamental rule of business. Never put all your eggs in the same basket.
In our case, I was in my comfort zone not thinking about future growth, oblivious to the harms of relying too much on one client.living in enjoying the billing from the client.
What saved us from sinking was the second line of business in our company which was managed by my partner. (note: it was a recent line of business started a few months back).
The next one year was spent going back to the basics. Getting more clients. Focussing on business and getting out of comfort zones.
Had it not been for my partner, we could have shut shop.
What I wrote above puts a solid argument in favor of benefits for partnership business.
Your partner is your support system.
All partners in a business complement each other’s skill set.
I typically look at Businesses with partners as “Indian Marriages”.
You don’t give up so easily on each other. You try to make it work. You learn to compromise (in a good way) and grow comfortable with each other’s strength and weaknesses.
The boat will not rock until and unless you have a partner cheating on you (cheating spouse 😉 ) or you are not trying to outshine each other’s achievements.
I consider the lack of ownership in partners as one of the top reasons why startups fail.
Does your business need a partner?
Here are few questions, you must ask yourself before looking for a business owner:
- Why do you need a business partner?
- What roles and responsibilities do you expect your business owner to fulfill?
- How much equity/stake are your willing to let go off?
- What kind of personality are you?
- How will all the business partners take money out of a startup when it is a growing business?
- What happens “if” the business fails or one of the partners want to quit mid-way (very highly probably scenario)?
Ask the tough questions before you get your favorite buddy to be your business partner.
And please learn the difference between getting a partner for your business or getting a partner for yourself in the business.
If it’s later, get yourself a friend, life partner or someone. Don’t let your loneliness force you to get a “partner” who supports you emotionally.
It’s good to trust your instincts and take decisions in a jiffy but answers to few realistic business questions won’t harm you.
Ask them before you decide to get a business partner.
They will save you from the agony of going through a painful business divorce at a later stage of business.