Well, that all depends.
Is it in your best interest to take on a partner in your start-up venture? There are several factors worth considering that may determine the ultimate success or failure of your business. We’ve all heard the expression that “two heads are better than one.” There is truth in that statement, but the stark reality is that it’s not so cut and dry.
While a game-changing idea is paramount to any new entrepreneurial endeavor, choosing a compatible partner for the long-term can be just as important. But, choosing wisely will prove even more so. The vast majority of partnerships usually involve a friend or family member. And this can get tricky.
A close friend or reliable family member can certainly help nurture a winning idea and even bring the necessary set of job skills to the table. After all, these are the people we know best. The ones we associate with daily. There’s no greater comfort than having that crutch to lean on when the going gets tough – and you can bet, it certainly will. However, be very mindful of that “crutch” and make sure it’s a sturdy one. While a friend or family member may share common interests and maybe even similar personalities that fosters a smooth, working relationship, it can be just as common for money to ruin those relationships, be it in the form of start-up capital or eventual profit. So it’s vital to establish boundaries, goals, and expectations early to ensure the stability of the partnership.
To take this notion one step further, it’s equally important to understand your role in the partnership and be comfortable with it. Most partnerships are organically grown, meaning there is usually the seed and the farmer. Both partners can ultimately become the farmer, but usually only one plants that initial seed – the idea for the business. That person can fall victim to ego and tyrannical behavior at the expense of both his partner and his business. Remember, a healthy, working relationship is a combination of understanding one’s place and one’s job in the endeavor. A good idea spawns more ideas, and great work leads to more work. Each partner will take on both roles as the show goes on. But both partners must be willing to allow this to happen naturally and leave ego at the door.
One of the most overlooked aspects of any partnership is implementing an agreed-upon exit strategy. It’s exciting to get that winning idea off the ground, but we sometimes forget that a partnership probably won’t last forever. There should be clear goals and a comfortable exit strategy in place that covers a range of outcomes the business may face. This includes the success or failure of the business, overhead costs, or even a buy-out option. Neither partner should feel imprisoned or overwhelmed; regardless if the business shines or drowns. Because let’s face it, most good things do come to an end.
So, in essence, keep these six words in mind:
Choose wisely… or not at all.
For more considerations about how to choose the right business partner, see our previous post here: A Match Made in Heaven: Choosing your ideal business partner