Having a business with partners is like having a marriage. That is why “Building your business with the right people” is so important.
Your spouse is your life partner. You make decisions together. You consult with each other before making decisions that will affect your lives. Marriage turns you and your partner into a team. You support each other. And you work towards success and happiness in your marriage and your lives.
So then, what’s the difference between your marriage partnership and what you encounter doing business?
Most business partners have a say in the dealings and decision making of the company. Relationships between company partners and your spouse are very similar. It requires similar actions in being successful and in keeping the peace between you.
Not all business relationships are the same. They may take one of the following forms:
- One or a few people own and run the business. They are the sole owners and make all the decisions as a team.
- There are outside investors. These people may be active and have a say in the business strategies. But do not take part in the day to day activities.
- There are outside investors who are silent partners. They have no say in any part of the business but expect a return on the money they have invested in the enterprise.
- There are affiliate companies or individuals who work with you on a full or part-time basis. For example:
- Individuals are given assignments and work on those only. They have no say in the running of the business but may have input on the work they are involved in.
- Companies may also be given work assignments. They also have no say in the running of the business, but may have input on the work they are involved in.
- Companies may do joint market work with you and your company. In certain instances, one company gets all the work. That is because the prospective client does not need their expertise, but they need yours. Or, the reverse could be true. There may be a finder’s fee given to the company that receives no work. Or there is no finder’s fee. It is anticipated that with enough engagements, everything will even out over time.
As a business owner, I dealt with all these situations.
The more involved a person or company is with the business, the more complicated and interesting things become.
They may not have a say in the running of the company. But, it is still important to remember that building your business with the right people is key. You must take this seriously. Or, you may run into some very difficult and interesting situations.
When I started my consulting company, espi, there were five other founders. We each set our roles and worked accordingly. Everything for the most part worked well. There were fits and starts, but we got through the early days well. We worked as a team and the company thrived and grew.
Along the way, there was a falling out with one of the partners. Over time she became less of a team player and was more self-centered and devoted. And she started to make mistakes that were costing the company profitability. This was particularly distressing, as she was our controller.
As sometimes happens in a marriage, you find that you are no longer compatible and you make a change. That happened here and the divorce occurred. It is better to realize that things aren’t working and move on. We did, and the person we replaced her with was terrific. He had run businesses and was financially astute. He corrected the errors our departed partner had made and made us a stronger company.
When life hands you lemons, make lemonade. I love that statement because it is true and it works.
Most of my experiences with partnerships were quite positive. We chose our associates well. They were very knowledgeable about the work they were doing and were team players. Some were not good fits. They were in business for themselves and didn’t care about the wellbeing of myself or my company. As long as they got what they wanted, that was all that mattered to them.
I am a trusting person by nature. I do go by the credo, “Trust but verify”. That has saved me from entering into or continuing relationships that were not in the best interests of myself and my company.
There was an individual, Tom, who dealt with the strategic and marketing aspects of small businesses. He had been a client of ours. He then left the company and started his own enterprise.
Having dealt with him, I and my partners felt he would be a great fit. We were an operations-oriented business. He dealt on the business development side. Together we could work on all aspects of a client company.
He and I discussed our potential partnership. We covered how we could approach and solicit businesses together. We discussed how to cover all aspects of this endeavor and that it might take some time to develop. We knew we might have to start in one area and then expand over time to the others. We would use the model that over time everything would even out, so there would be no finder’s fees.
We talked forever about getting started. We developed plans and listed potential companies to go after. But, no joint marketing ever took place. Tom would disappear and provide no communication or contact. I would see him at a monthly business meeting we attended. He always had an excuse that something had come up and we would get started shortly.
Finally, one day I had had enough and I confronted him about why the delays. He told me that the more he thought about it, he reasoned that more business would sway our way. And, his revenue would take a hit.
Once I realized that, there was a giant flushing sound. Goodbye Tom.
My partners and I still thought this was a good strategy for an alliance. So, we looked for other partners. Would you believe that Tom then complained about us doing that? Even after he refused our offer to be that person? That is someone you don’t want to do business with. So we didn’t.
Then there was the company that approached us about joint marketing. The owners (Peter and Manash) were both financial people. They had supposedly done seminars and webinars, with many companies. They wanted to market these companies, but felt they did not have the ability to approach them on their own. They wanted us to do that with them.
We agreed. We spoke on occasion about this, but never got to the specifics about who was on the list. In the meantime, they got a job that we were brought in on. The work was going well and all seemed good. But, there was still no plan or action to deal with marketing the companies on their unseen list.
I and the head of this company were together onsite at the client. After a day of work we sat down to dinner. I brought up the mention about joint marketing and asked when they would share the prospect list. He told me there was no prospect list. And, to top it off, he wanted to know when I would introduce him and his company to our existing clients.
There was no plan to joint market. It was all about my company bringing work to his company. Not a good partnership for sure.
Then, there was our contract worker Jay. He had been part of his own company. But had dissolved it with his partner. His expertise was in IT for which we had a lot of work. We utilized him as a contract worker. We had the understanding that while he would work on projects we assigned him to. And, he would also work to bring other opportunities to us.
That never materialized. In fact, he also tried on at least three occasions to get private work with some of our clients. Finally without our knowledge, he took a job with one. That was it. We parted company and he lost not only our friendship, but many other engagements he could have worked on.
These were not so good moments. But, there were many others that were good and were true partnerships.
When we lost one of our key IT employees, we had to fill the void with contract people. We found two gems. Kathy had previously worked with us on other projects. We reached out to her and established a contract relationship with her.
Her responsibility was to work on projects we assigned her to. There was no requirement to bring in new business. It worked out very well. Because of her efforts, we got extra business from the clients she worked with. She was going above and beyond what we contracted her for.
The second, Vikas was contracted to provide project management expertise to a major client. As with Kathy, his role was to work on project assignments. There was no expectation of soliciting or finding other clients and project work.
He did such a great job, that the client he was assigned to utilized him on additional projects. He brought more work into our company. He also filled the project management void that our departed IT person left.
There was also an engineering design firm that we had a working relationship with. When clients needed technical facility design or utility sizing work, we always recommended them. They in turn, suggested us to some of their clients. We traded opportunities back and forth and as we hoped, it all evened out.
These are the kinds of people and firms that I want to work with.
They and their business is their number one priority. Establishing great working relationships with me and my company is a close second. They realize that by working together, we can both succeed.
They do not see the relationship as a one way deal. Nor are they afraid of losing business by recommending me and my company.
I have learned a lot by dealing with both types of people and companies. I learned that “Trust but verify” holds true, especially in business.
I have learned that there are some really good people and companies in this world. These people are professional. They are concerned about themselves and their businesses. But they also want to establish good relationships and dealings with others. They epitomize building your business with the right people
As I write this, I am “retired” from my consulting practice at espi. Through the writing of my first book I had to develop partnerships with people (Renia, Jeff, Jess and Mark). They have helped me write, edit, market and sell the book. We have worked well together and have developed great partnerships. I am also talking to many people and firms about consulting opportunities. All the lessons I have learned are coming back into play. I need to pick my partners well, because being in a partnership is like being in a marriage. And, in that way, I will continue building my business with the right people