SPECIAL NOTE: For this post, I am turning over my blog to one of my amazing podcast guests. He writes about an important topic. Read on. – Todd
You don’t have to do it alone: Why bringing on a partner might be a great fit for your business
Let’s be really honest for a moment. There is a place inside every founder where they hide their secret hope of one day becoming a superstar founder/CEO. A legendary leader the likes of Steve Jobs, Mark Zuckerberg, or Jeff Bezos. A true visionary who calls all of the shots and then basks in the glory as their decisions propel the business to new heights.
Alright – maybe we don’t all want to be the next Larry Page, but even if you’re not trying to create the next Google, it’s natural to want to be the ultimate decision maker for your business. Because whether your business succeeds or fails, you should be the sole driver of your company’s destiny, right?
My business partner and I would argue that no, you don’t.
For the past two and half years, Corey and I have been navigating a business partnership in which we make the decisions for our bookkeeping/consulting company together. Although Corey is the founder, we act as co-CEOs. We’re not really into titles, so we simply refer to ourselves as “Partners.”
You would think that two people managing a small team would create tension and a bottlenecks. That just hasn’t been the case for us. Our business has doubled since we’ve become partners, and there are no signs of a slowdown anytime soon.
The idea of bringing on a partner is not something many founders consider. Who would want to give up shares of their business and relinquish part of their decision making power? If you look at a partnership in this way, then yes, it doesn’t sound very appealing. But if you’re able to find a partner who can help grow the value of the company to levels you could never do alone, you would be doing yourself and your business a disservice by not considering the benefit a partnership could bring to your company.
Corey’s and my partnership has been successful for a few different reasons. We’d love to examine those reasons with you so you can consider whether a partnership might be the missing piece for your business.
Get clear on compensation and ownership.
Before any work is done, ownership and compensation negotiations need to get worked out. This can be the most awkward part of starting a partnership, but it’s important that both parties are crystal clear about what they think is fair and what they’re going to need to be happy.
I took a huge pay cut to come work with Corey. The business didn’t yet have the revenue to support my salary. That’s why a partnership made so much sense for us. I initially took a hit on my monthly salary for an ownership stake in the business, and Corey gave up shares of the business in order to gain skilled labor that the business would not have been able to afford otherwise.
From there, we set forth a plan to increase my salary as our revenue grew while also ensuring we had money left over to invest back into the business in other ways (like hiring our third employee). The last thing we wanted was to hinder the future growth of the business by increasing my pay too quickly.
The lesson here is that partnerships don’t need to start out as 50/50 splits, especially when the business is already established and making money. Whatever compensation is negotiated, the crucial thing is that both parties feel the agreement is fair and provides room for both partners to benefit from the future growth of the business.
Check your egos at the door – it’s all about the business
Founders and CEOs are not exactly known for their humility. The risk and volatility that comes with starting a business tends to attract a very confident type of person (be it a loud or quiet confidence). Sometimes, with this extra confidence comes an inability to listen to the opinions of others or admit to your own mistakes or failures.
Especially for a small business like ours, there is no room for primadonnas or narcissists. Corey and I have to be very aware of each other and make sure we’re aligned on the decisions we make. The only reason we’ve made it this far is because we listen and take each other’s opinions into consideration 100% of the time. It’s never about who is right or who is wrong. It’s about what’s best for the business.
Complimentary skill sets go a long way
If your main strengths are sales and marketing, bringing on a partner who has those same skills is almost certainly a disaster waiting to happen. When both partners are working on the same projects, it increases the chance that other important parts of the business will be neglected while also creating situations where the partners will step on each other’s toes.
From the very start, Corey and I knew we would make a good team because we have complimentary skill sets. Corey is very operations- and systems-focused. He likes to make improvements to our current processes. I’m more focused on marketing and product strategy, which means I’m much more comfortable creating new opportunities for the business. Corey is also calm and level-headed while I’m much more outspoken and reactive.
Are you getting the picture?
It’s pretty obvious that Corey and I have very different areas of focus within the business (and even different personalities). This not only gives us really great coverage when it comes to managing the entirety of the business, but it also allows us to feel secure in the distinct value we each bring to the table.
Make space for a friendship
Corey and I were friends before we started working together. Corey’s wife and my wife have been best friends for many years, so our lives were already intertwined before we started working together. On one hand, because we knew each other well, we had a good feel for how our personalities would mesh in a professional environment. On the other hand, if things got messy, we not only had our friendship on the line, but that of our wives as well. Because of this, we’ve always been extremely sensitive to prioritizing the friendship over the business relationship.
You might not have the benefit of a close friend who is both qualified and willing to jump in as your business partner. Corey and I recognize that our situation is a rare one, but whomever your partner ends up being, it will be important to cultivate that relationship carefully. Aside from your significant other or immediate family members, your business partner will likely be one of the people you interact with most, so developing a bond will be important to creating a long-lasting partnership. No matter how valuable someone might be to the business, you won’t make a good team if you suspect each other’s motives or can’t stand being around each other.
Communicate – a lot!
If you’re going to work well together as partners, you have to be on the same page every step of the way. Especially for smaller businesses, where there is far less room for error, both partners need to be on the same page regarding the overall direction of the business. The only way to achieve this is to communicate regularly.
Corey and I don’t work in the same office. He works out of the business’s main office in Los Angeles and I’m in San Diego. It would be easy for us to go a couple weeks without really checking in because we both have so much going on. We don’t let that happen. We communicate via our computers and phones every single day. This allows us to catch up on immediate issues in the business while also staying connected about the long-term goals we’re working to achieve.
Because of our constant communication, Corey and I both feel that we make better decisions together than we do individually. We’re a small business experiencing accelerated growth in an ever-changing market. There is always something to talk about and always a decision that needs to be made. We very rarely second-guess ourselves because we deliberately work through the decision making process to make sure our logic is sound. Plus, if we make a wrong call, there are two of us to problem solve and get things back on track.
The most important thing to remember about partnerships is that there has to be real benefit for both parties, and that doesn’t always have to be in the form of financial compensation. My partnership with Corey has allowed me to fulfill my desire to be an entrepreneur and create a work-from-home lifestyle that I would never have had working in a corporate environment. For Corey, he has a more stable and successful business and he no longer has to shoulder the responsibility and stress of managing it alone. It’s truly a win-win situation.
It can be lonely at the top. Many CEOs of major corporations complain of feeling isolated and alone. That’s why we think there is something to be learned from our unique partnership situation. Not only do we feel like our business is better off and more successful with both of us holding the reins (our numbers prove it), but it’s also a lot more satisfying and fulfilling to share in the entrepreneur journey with someone you respect and admire.
To your business’s success!
Parker Stevenson is a partner at Evolved Finance, a boutique bookkeeping and consulting firm based out of Southern California that specializes in servicing online businesses. They recently launched their first e-course called the shift, which teaches entrepreneurs how to better understand the financial side of their businesses. To learn more about the shift, click here.