How Getting a Business Partner is Like Getting Married
It's really not an exaggeration to say that gaining a new business partner is a lot like gaining a spouse.
Think about it. When you tie the knot with a business partner, you’re not just sharing an office—you're embarking on a future together where your financial well-being and emotional sanity are intertwined. Having seen my fair share of partnerships as a business executive and a third-generation woman entrepreneur, I can tell you—it's a big deal.
The Synergy of Strengths
When it clicks, it's magic. The business hums along because you and your partner are in sync, playing off each other’s strengths. You might be the brainiac who loves the nitty-gritty business strategies, while your partner could be the tech whiz who brings those ideas to life. But here's a tip: don't squabble over the small stuff. Make sure you're crystal clear on who does what. Nobody wants to feel like they’re pulling more than their weight—it’s a fast track to resentment.
On the other hand, working with a failing or destructive partnership can be very unpleasant. It's unsettling and harmful for the business, and it's definitely damaging for the partners. After all, who wants to work with a couple that can't work with themselves?
Preparing for a Business Partnership
You should prepare for gaining a business partner much like you would for a marriage. Plan for it to work out, but be prepared in case it doesn't. A partnership agreement, like a prenup, is necessary. Discuss this early on, when the relationship is good, so you know how to split up if it comes to that.
Here are some key similarities between business partnerships and marriages:
Open and honest communication
Managing finances together
Working through conflicts
Commitment to making it work
Before committing, hash out what you both want your partnership to look like and get clear on shared business goals. Discuss communication styles and mentally prepare yourself to make the commitment—and to make it work!
Finding the Ideal Business Partner Match
When choosing a business partner, look for someone with complementary skills. You might be great at business and administrative tasks, while your partner excels in technical areas. However, even with clear divisions, it's important to be specific about how you'll share the workload. People get angry fast when they feel like they're doing too much.
Some key areas to delineate responsibilities for include:
Business development and sales
Marketing and PR
Finance and accounting
Operations and logistics
Product development and R&D
Take the division of labor seriously. Write it down and communicate proactively. As any go-getter knows, a job description is always in draft mode, so keep the conversation going.
Keeping the Spark Alive: Tips for Long-Term Partnership Success
Just like in a marriage, keeping the spark alive in a business partnership requires ongoing effort and communication. Michael D. Eisner, former CEO of The Walt Disney Company, knows this firsthand. In his book on successful business partnerships, he writes, "Even when two people are a perfect fit, there are going to be times when someone needs to speak up, and say something difficult."
Eisner's partnership with Frank Wells at Disney is a prime example of how regular check-ins and open communication can help navigate challenges and drive success. Despite their different backgrounds and occasional disagreements, Eisner and Wells made a point to have regular "date nights" where they would discuss priorities, brainstorm ideas, and address any issues in their partnership.
Here are some tips for effective business partner "date nights":
Schedule them at least monthly, if not weekly
Have a set agenda covering key business areas
Rotate responsibilities like setting the agenda and taking notes
Leave time for open discussion and brainstorming
End with clear action items and next steps
By making communication a priority, you and your business partner can "rise above in a world that is dominated by people who think working alone is better," as Eisner puts it. Regular check-ins help you stay aligned on goals, navigate difficult discussions, and ultimately build a stronger partnership that can weather any storm.
5 Must-Haves in Your Business Partnership Agreement
Even the most successful business partnerships can encounter challenges and disagreements. That's why having a solid partnership agreement in place is crucial. It serves as a roadmap for navigating potential obstacles and ensures that both partners are on the same page from the start.
A well-crafted partnership agreement should cover the following key areas:
Ownership Percentages: Clearly define each partner's ownership stake in the business. This includes not only the initial investment but also any future contributions of capital, resources, or sweat equity.
Division of Profits and Losses: Specify how profits and losses will be allocated between partners. Will they be split equally or based on ownership percentages? How will you handle distributions and reinvestments in the business?
Roles and Responsibilities: Outline each partner's day-to-day duties and decision-making authority. Who will be responsible for managing finances, operations, sales, or marketing? Clearly delineating roles helps avoid confusion and conflicts down the line.
Decision-Making Processes: Establish a framework for making major business decisions. Will you require unanimous consent or a majority vote? Are there any decisions that require input from an outside advisor or board of directors?
Exit Clauses and Buy-Out Provisions: No one likes to think about the end of a partnership, but it's essential to plan for potential exits. Include provisions for voluntary and involuntary departures, such as retirement, disability, or death. Specify the terms for buying out a partner's interest and any non-compete or confidentiality agreements that will remain in effect post-exit.
In addition to these core elements, your partnership agreement may also address topics such as:
Dispute resolution procedures
Intellectual property rights
Employee management and hiring practices
Confidentiality and non-disclosure agreements
Amendments to the partnership agreement itself
Once you have a signed partnership agreement in place, don't just file it away and forget about it. Schedule an annual review to assess whether the agreement still aligns with your business goals and partnership dynamics. As your business grows and evolves, your partnership agreement may need to be updated to reflect new realities.
Key Takeaways for Successful Business Partnerships
Building a thriving business partnership takes effort, communication, and planning. As you embark on this journey, keep these key take-aways in mind:
Choose Wisely: Seek out a partner whose skills complement your own and who shares your core values and long-term vision.
Define Roles Clearly: Sit down with your partner and hash out who will be responsible for what. Play to each other's strengths and be clear about decision-making authority in different areas of the business.
Communicate, Communicate, Communicate: Make open, honest communication a top priority. Set aside regular time to check in with each other, provide updates, and address any concerns before they fester into bigger issues.
Put It In Writing: A written partnership agreement is essential for protecting both partners and providing a roadmap for the future. Work with a lawyer to draft an agreement that covers key areas like ownership, profit-sharing, roles, and exit clauses.
Expect Challenges: Just like a marriage, a business partnership will have its ups and downs. Be prepared to weather tough times together and stay committed to finding solutions.
Starting a business partnership is a major milestone—but it's just the beginning. Building a successful partnership takes ongoing work and dedication.
This post originally appeared in my work-life harmony column on Inc.com.