Know-How Exchange : Strategy

Dear Designer,

Web design and video production are a great combination. YouTube (owned by Google) is hardly five years old people,
but its reach is huge.

Sadly, there are still many, many technical Luddites who think
that video is not for them, or who think that it's no big deal, that it's in essence, a fad that will pass.

They're idiots.

For anyone—ANYONE—who thinks video is STILL not a big deal, know this: In November 2009, 170 million US Internet users watched a staggering 31 billion videos (yes, people, that's Billion, with a "B".

So, video is already big and it's going to get bigger. Much, much bigger. So here we have two highly skilled individuals, all full of vim and vinegar, wanting to set up shop so that they might carve themselves a big ol' slice of the aforementioned pie of website users and video viewers.

First of all, I am NOT a business lawyer (I'm a graphic designer who knows a smidgen about marketing), and you and your partner would do well to consult a lawyer, a good one, and one who specializes in the legalities of business partnerships. And while you're at it, get your self sorted out with advice from a top notch accountant, and a financial planner. And the quicker you do this, the better for all concerned.

Partnerships? Everyone's a friend, right? Not so fast Sparky. In fact, hold the phone and stop the presses.

Regardless of how long you've known each other or of your relationship, you must not and cannot go into this venture thinking you'll always be the best of pals.

Note this and note it well: this is a business partnership, not a friendship. It's business. There's a huge difference. And as in love and war, in business, all things can often be seen to be fair.

They are not.

Partnership-wise you MUST get everything in writing, and you MUST have a contract, the terms of which you both draft and that you both agree on and sign off on.

The biggest issues in any business deal or partnership are trust, responsibility, and accountability. If you don't have these, or if you're in any doubt—ANY DOUBT—you don't got nuttin!

What are your mutual goals?
What are your personal goals?
What does your business plan plot out for you both over the next quarter, the next year, or over the next three years?
Who calls the shots when the creditors come knocking?
Who will handle the buying, the selling, the clients, the book keeping, the marketing, the bill paying, and the disgruntled clients?

It's not about the business, it's about the partnership. Except, it's really about both because without one, the other does not exist. The whole has strengths, weaknesses, fears, doubts, aspirations, hurts, and petty fights and differences. And that's just for starters.

What are these things? What are your attitudes to success? What are your attitudes to money? (making it, spending it, investing it, using it as a tool). What are your attitudes to responsibilities, to roles, to being tough and soft when each one is necessary or warranted? What are your attitudes toward hiring? Firing? Management? Marketing? Customer service? Brand building?

And so on.

If you don't know the answers to any of these questions, or, if you just know the answers to a few of them, bloody well take the time to find out

Think you can figure all these things out as you trot along on your merry way?

Think again.

Get it out in the open now—all of it—and get it in writing, get it signed, get it sealed, and get it given the thumb's up by a notary. Skip this step and it WILL come back to bite you in the ass.

In many countries, partners in business are equally responsible
for the losses and debts of the company. Legally, financially, and liability wise, business partnerships are often seen as one unit.

This means that if one of you goes apeshit with the company credit card, or if one of your does a runner with the contents of the bank account, leaving the other standing around wondering who those men in uniforms are at the front door asking all those questions and both your names are on the account, you are both EQUALLY responsible for the debt.

Likewise other losses, debts, liabilities, fees, and disbursements.
You've GOT to get this all written up, nice and legal and all tied up with a bow. The motto here is "Cover Your Ass".

Think this is overkill? You've never been bitch-slapped in business, have you? I have, as, I'm sure, have others on this forum.

Get everything out in the open (and in writing) and give and expect bone honesty and I'm sure you'll be fine. Go into this relationship with your eyes WIDE open, and this applies to both
of you, whoever you are.

I hope this helps. Good luck to you—to both of you.

Gary Bloomer
Wilmington, DE, USA
Follow me on www.twitter.com @GaryBloomer

Why don't you begin by just paying each other referral fees when you generate new business for the other person? That way there's no obligation or responsibility to each other.

Then, if it seems to be working, you can explore ways to make the arrangement more permanent/exclusive. Because this is an untested relationship, I think you're best served by dating before you get married. You might decide that you don't want to be too tightly bound to each other and/or find other partners you want to refer.

Yes, I agree with what Michael (mgoodman) said...

Test the water first. Every approach I get for partnerships is based on a perception (in their minds) that I have massive leadflow to feed to the prospective partner.

I don't need to work with ten different web designers, five different graphic designers, and multiple IT partners.

I just want one I can trust in each category. Maybe two, if they have radically different capabilities.

And I want bi-directional leadflow.

So attaching a financial benefit to referrals that convert is the fairest way to go.

Try it. If there's real lasting value in partnership, you'll soon find out.