Small-business owners like to say that it's really lonely at the top. It can be more rewarding if you have the right partner to build a company with. But unfortunately, having a partner can be an absolute nightmare.
When it works, your partner can share the responsibility of the day-to-day weight of running the company. This can be comforting and supportive. Often, two people running a business together can effectively become greater than the sum of the whole, if theirs is a synergy of skills.
More frequently, two people working together means conflict. Unsettled partner disagreements can kill a company. If partners don’t work equally hard toward the same goal, conflicts will erupt.
It's far easier to go into business with someone than to get out of the business. The honeymoon phase of any relationship is always more exciting than the daily grind of working together over the many years it takes to be financially successful.
If you're thinking of going into business with a partner, or already have one, take the partnership test.
Are you compatible with your partner?
Answer yes or no to each question. Score one point for each yes answer.
1. Do you respect and trust your partner?
Forget about skills in this first question. Respect and trust will sustain a healthy partnership over the long term, regardless of each person's skill set. If there are personal differences, never divulge them to employees or vendors. You have to trust that your partner will not reveal anything the two of you are working out.
2. Are your skills complementary to your partner's?
If you are both product-development geeks, yours may not be the best pairing. Complementary skills like marketing and technology are often more effective partnerships. Blending divergent skills in a single company allows a natural division of responsibility for leadership, which will reduce potential conflict areas.
3. Can you communicate effectively with each other?
Especially when the chips are down, you must be able to communicate well and argue productively. Can you keep it from getting personal? Do you have a track record of making decisions together even if you initially disagreed? Use the 24-hour rule where both partners never let unresolved issues fester more than a day without resolution.
4. Do you agree on how to use money?
A common issue with any professional marriage, is making decisions around money. Do you both have common values of what to invest in and where to allocate resources?
5. Do you agree on the exit strategy or end game of the business?
Do you plan to take on investors to expand the business for eventual sale or does one partner plan to leave it to their children? Make sure you establish a legal mechanism for one of you to get out.
6. Does your spouse or significant other like your partner?
This can be a critical factor. The relationship partner will be whispering in the business partner's ear at the end of the day. What are they saying about you?
7. Is there an imbalance in effort or contribution between partners?
Overtime, what started out as "equal" becomes "unequal" at times. Can each partner accept this changing dynamic? If not, see #5.
How does your partnership score?
Give yourselves one point for every yes answer.
Score 0 to 2: Let's face it, you are not compatible with your partner. Divorce is in your future. Get out now.
Score 3 to 5: It will be hard to make it work. Call me or see another business advisor for help.
Score 6 or 7: You are made for each other.
What rules make your partnership effective or an absolute nightmare?