Know-How Exchange : Strategy

Dave,

You may have read my several posts about my experience with partners. In short, they have not been very rewarding.

The many issues you face are share of profits, share of workload, and corruption once the "real" money starts coming in. I can write a book on specific examples, but I think you get the point.

What I have done instead of seeking "partners", is form contracted associate relationships to share in the work load and profits based on a legal agreement. The separation and freedom of this relationship allows for the same (if not better) benefits of having partners without the implied marriage of making one a permanent corporate officicer.

Now, this is NOT in effort to replace the partnership structure. Rather, it is a way to enrich and establish WORKING relationships with POTENTIAL partners. As a matter of fact, I am about to propose a partner-like agreement with some of the people I have been working with. Some of them have not even worked on a single project for me, but I have studied their expertise, personality, backgrounds, achievements ,etc. and feel confident enough to take a leap by initiating a "trial partnership program".

In essence, like I discussed in our off-site email about a month ago, offer a profit share and/or referral bonus for current and prospective clients. For example, if one of my clients needed telemarketing, you are the first person who comes to mind. I would offer you an agreement, ask for 15%-20% of the gig, and let you take over from there. The benefits: you get a new client, establish a chance to show your stuff to other marketing professionals, establish a sound referral "advocate", increased profits, etc. The costs: giving a portion of the retainer, taking the time to share in the reporting/discussions/agreements etc with the referral source. Th alternative: decline and receive nothing...and I will find another provider.

Sounds kinda harsh, but it is simple reality.

Feel free to send me an email to discuss this further. I would be glad to give you some tips and brainstorm on some potential solutions for you. No obligation, no charge..just colleague to colleague.

Take Care!

--Blaine

Telemoxie,

Jett gives good advice. To tell you the truth every situation I've seen with business partnerships has not been positive. Since I have not lived long enough to see what my Godfather Brian Tracy has lived to experience I just follow his lead and I have just accepted his life experience as gospel. He steers clear of partnerships. Thanks for allowing me to share. Is there anything else I can do for you?

Your Servant, Deremiah, *CPE

They can, but there are added risks/challenges to them.

I have worked for one company (an event management company) that is a partnership. They formed because they both had started event management companies in the same field, and decided to combine forces. They had their challenges, but now they have settled into a very workable arrangement where they split up responsibiliies very clearly, and don't tread on the other's area.

But I have seen very many which don't work. The one above is almost an exception to the norm.

Partnerships can add a lot of value if they bring skills and interests in which one person doesn't have. And in some cases, partnerships are required if you want to work with others in your field (professionals, such as lawayer, doctors, and accountants generally have to use partnerships).

To help prevent propblems, a partnership should have a very clear Partnership Agreement which details who brings what to the partnership, who does what, and what happens if a partner decides to exit the business.

My own experience was not good. But, I went into the situation very naive. In my case, I had a partner who wasn't even doing enough work to pay his own salary in the business. There was some other ugly stuff, but I won't go into the details here. Young and inexperienced, I didn't give a second thought to more than how great it would be to have my own business.

I suppose it's like a good marriage. You make sure you have the same outlook going in and then you constantly work on it.

My gut says that there are times when partnerships work well. Look at accounting and law firms. They very carefully structure the business so that partners have accountability and can come and go.

I receive a publication called "Persuading" that is geared to the needs of small creative firms. David Baker, the editor, has strong opinions about this subject and has done extensive writing on it. In fact, just after "buying out" my partner, I did David did some consulting work to help me recover my business.

www.persuading.com
www.recourses.com

Dave, ANY business relationship can turn ugly. You can get screwed by your employee, your client, etc., no matter how much steel use to reinforce a contract.

I am one of the lucky people who has a great partnership. We didn't go into the relationship casually! It took a lot of "dating" before we both decided that we would work well together. Honestly, I think I took this commitment more seriously than any of my marriages. (Don't worry, I've stopped getting married.)

Several responders here have used the word MARRIAGE, have you noticed? It's not just a good analogy -- you really do need to consider whether you like, trust, and respect your potential biz partner enough to live with them. You are putting each other's future into your mutual hands, and often you are going to spend more time with him/her than your respective spouses. If the "chemistry" isn't there, the legal agreement is pointless.

Shelley