How to Start a Business, Managing Your Team | February 3, 2014
Picking a partner can have many pitfalls and many benefits. When you have the right chemistry a whole new entity is formed. The enthusiasm often feeds off of itself and can get you through times of both low inspiration and difficult challenges.
Ideally, one partner brings something the other lacks. I’ve seen instances where a creative person is partnered with a pragmatic individual and together they bring a great balance as long as they respect their differences.
It’s important to bear in mind that partnerships seldom last a life time, therefore having a fair formula for splitting up is critical. This can be a “shot gun” clause or just a valuation formula. An interesting and important factor to note is that in some formulas, if you don’t have enough money to buy out the partner, you lose. This is a huge topic in itself, so suffice to say that you should never ignore the fact that a partnership will come to an end at some point. (High fences make good neighbors as good guidelines make good partners!)
Another issue is clarity of roles. In the beginning, everyone usually just works hard but how will you handle it when one partner decides they want to fish for 2 months a year? What will his pay be? What if one partner is a workaholic and expects everyone else to do the same?
Partnerships can be a huge benefit, especially in the early years, but pick your partners very carefully and never be weary of a split.
Written By: Henry Dunfield