Running a business can be lonely. The buck stops with you. Having someone to join you on the journey not only shares the burden, but as the old cliche says, two heads are better then one.
So, should you have a business partner?
Maybe. I’ve been in business since 1992 and over that time I’ve had several partners, some good, some not so good. Here’s what I’ve learned along the way.
1. Make sure your skills complement one another
For the past couple of years, my son Andy’s been my business partner. We started working together when he was just 20, fresh out of college and bursting with ideas. Andy’s a designer, naturally creative, and since we started working on AM Accounting at the beginning of this year we’ve really got into our groove.
I do the business and accounting stuff; Andy does the marketing and digital stuff, and we collaborate on the service design. A perfect balance.
However when you & your partner both have the same background and skillset – you see this a lot in professional service firms – then it’s unlikely you’ll have the same impact.
The more your skills complement each other the better.
2. Will you get on with each other?
You’ll spend more time with your business partner than with your life partner, particularly in the early days, so it really helps if you get along with each other. Making the commitment to build a business together shouldn’t be taken lightly, so make sure you know what you’re getting into.
Spend time getting to know one another. Get comfortable with each others quirks & mannerisms, because if you don’t do that at the outset, you’ll find them driving you mad later on.
Over the years, I’ve learned to trust my gut feeling about people. Earlier in my career I was focused more on the idea or the potential upside / financial rewards, and less on the human dynamics. Every time I did that it cost me dearly.
Eventually I learned the lesson, but not before I’d kissed goodbye to north of half a million quid, and wasted several years of my working life.
3. Skin in the game matters!
If you’re going to be partners, then you both need to be invested in the business. It doesn’t have to be an equal partnership – sometimes it’s justified for one partner to hold more of the equity.
But every time it’s vital that you’ve both made a commitment to the business. Maybe that means putting money in; perhaps it’s ‘sweat equity’, where you work for free or a reduced amount for an agreed period of time. It could also mean putting up your house or another asset as security for a bank loan.
If only one of you is invested, then it’s not going to work – it’s easier to walk away or give up when the backs are against the wall when you’ve got nothing to lose. The imbalance will also breed resentment over time – trust me, I’ve been there.
4. You both need to be working in the business
Having a ‘silent partner’ was one of the worst experiences of my working life. Maybe I got unlucky, but in my case it just didn’t work. I was all in, fully committed, working 80+ hours a week, whereas my ‘partner’ would just swan in now & again, ask a bunch of questions without really understanding the business, piss everyone off, then waltz off into the sunset.
A silent partner might work for some people – and I know a few friends who will tell you great stories – but it’s not a situation I’m ever going to allow myself to get into again.
5. Sometimes you’ll get lucky and it will be wonderful
In 2003, I met Brian Sherret. At the time, I was working as FD of a construction group in Aberdeen. Brian did some sales consulting for us. We hit it off straight away, our personalities and skills complementing one another perfectly.
Fast forward to the end of 2004 and we were setting up a business together – GHRL, Scotland’s first interim management company, which Brian still runs today with his wife Fiona.
We built that business together for several years until I was head-hunted by a client and I made the incredibly hard decision to leave the company I’d co-founded with my friend. I don’t have many regrets, but that one will live with me for the rest of my life.
If you can find the right business partner, someone like Brian, then do everything you can to make that relationship work. Don’t be swayed by financial promises. Take your time to really get to know the person you’re going to share your business journey with.
And learn to trust your gut feeling…..