By the time I began thinking about launching my company, Multiwear®, I had already failed at business ownership before. When I was approached by others who were interested in starting something up, I was very reluctant to delve back into the entrepreneurial world. Their encouragement goaded me to kickstart my creative juices, and I again found myself infected by the startup bug.
To do things right, what I really needed was investment and marketing. What ensued was the search for a partner. I spent about a year and a half talking to and communicating with various people from friends or past jobs that I might consider working with.
What I found was that there were very few people with money who were willing to invest into something that was not a sure thing. And, that very few people were actually willing to work the hours required to get a business going, while holding off on seeing a return.
My own quest for a partner left me more inconvenienced; spending my money supporting two people, and spending my time doing what they were supposed to be doing. I also found that it was not very time efficient, as I had to wait on them to get something done when I could do it better (and faster) on my own. But, this isn’t the case for all businesses.
So, how do you know if taking on a partner is right for you?
When it comes down to it, finding a partner is like getting married. Think about all the failed unions in this country. Although there are some really amazing marriages out there, not everything goes as planned. Finding the perfect partner can often take more time that actually launching the business itself.
When working with a partner, it can be difficult to find mutually beneficial times to get together. You also need to seriously consider legal ramifications of if a partnership does not work out. There are a lot of headaches involved with forging a partnership, because anything can happen. If you find yourself constantly making excuses for your partner, you should either stop working with them or put them on a probationary period.
Concerns about start up capital should not be enough to justify taking on a partner. My recommendation to you is that if your potential partner is not willing to put in at least $10,000 to your business (especially if you are generally the work horse between the two of you), it is best to go it alone. $10,000 is a lot of money, but it’s really not that much to come by if you get creative about finding funding.
Don’t get me wrong – starting a business is a huge investment, but for me, it turned out that the amount of time and money that the other partner would be willing to put in was just not large enough to justify giving up so much ownership of the company.
Making It All Work
Even with all of these elements, you may still feel that it’s worth the risk to get the company going quickly. Dig deep and consider the cost benefit of their expertise, time, and investment. Consider whether there’s a way to evaluate the partnership as a trial, or to evaluate their work before entering into an agreement.
Be your best fan and be your partner’s worst critic. That may sound like bad advice, but if you apply it early, you’ll save yourself a lot of trouble later on.
In deciding if you should work with a partner, ask yourself:
- What is the partner going to do?
- What financial and temporal contribution are they going to make?
- Will that contribution be significantly more than my own contribution?
- Can I afford to double my contribution without working with this person?
- Do I know this person well and can I trust them?
- What will happen if the partnership does not work out?
In considering these questions, you’ll arrive at the right answer for your personal situation.
What questions do you have about partnering? Let me know in the comments.