Tuesday, March 3, 2015

Choosing business partners

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     To grow a small business to the next level can take different paths. One path is to take on a partner.

     Nobody is good at everything. And nobody can do everything. Taking on a partner in business is a way to help round out your strengths. It helps tremendously if partners are compatible with each other and appreciate each other's company.

     Example: Clayton ran a small carpentry business. He had many years experience building the cabinetry in residences, offices and clinics. Business was good, but Clayton wanted to expand and do more. He along with his employees and shop could handle more jobs, but he knew he lacked the "outside" skills--meeting new people, attending events, selling his services. He found a potential partner in Bill. They enjoyed their conversations and respected each other's mind set. Bill had a successful career behind him selling window treatments to residential clients, decorators, and office managers. Clayton and Bill formed a partnership based on all the new business Bill could bring to the cabinet shop over the course of a year. If targets were met, Clayton and Bill would become partners in the ongoing business. 

     Look for partners who bring talents that complement your own. If you're good at production but not so good at selling, do as Clayton did. A careful phasing-in period can be important to iron out the details. 

     Setting up a partnership in an existing business is one thing. Setting up a partnership as a brand new operation is another. 

     Example: Gary had run several successful businesses. Looking around, he saw a new opportunity in real estate--small apartment buildings. Money was not his problem, but Gary realized he would need a detail oriented partner. He began a search--asking business friends, interviewing several possible candidates, and, finally, homing in on a young man named Jose. Jose was bright, energetic, ambitious, a "self-starter" and had held several different jobs in the construction trades while in high school. Best of all, Gary and Jose had compatible personalities. Gary proposed an equal partnership, starting out with one small apartment house. Gary would handle the business end (banks, lawyers, taxes, etc.) while Jose would handle maintenance, tenant complaints, and search out additional properties they could acquire. The partnership was successful. Gary and Jose worked closely together, relying on each other's experience and talents. 

     Care must be exercised in setting up partnerships. Two partners who do the same things get in each other's way. But two partners who complement each other have a better than even chance of success. 

     Two people who work well together and who complement each other's weaknesses can form a successful business partnership. A partnership is sort of like a marriage--you'll have some rough sailing at times, but the journey is worth it.