Beating the Perils of Partnerships: How to form a more perfect union

A business partnership is like a marriage. It comes with similar baggage - the ebb and flow of independence, dependence, insecurity, creativity, and crisis - and the challenge of trying to raise a child (your business) from infancy through adolescence to adulthood.

Have you checked the divorce statistics lately? Well, the odds of a business partnership surviving are even worse! And for a family business? Train wreck ahead!

But as with marriage, there seems to be a strong human pull to form business partnerships. And for those who've forged ahead despite the many perils, strategies do exist to increase your odds of success.

A study in contrasts

A partnership is an agreement to rule by shared decree. It's a declaration that affirms the parties' common vision, each offering the other full support and appreciation for their role in the relationship. Ideally it's a mutually beneficial merger of ideas, ideals, talents, strategies, and finances. But...it rarely works that way.

John and Bonnie are partners in a company that installs home theater systems. In business for five years, married for seven, they have two young children. John is the sole salesperson and decision-maker, and supervises two crews. Bonnie runs the home office - phones, accounting, billing, payroll, vendor and customer relations, order changes...and diaper changes. To keep their business and personal lives separate, they agreed never to talk about the business when they're together - which means: they never talk about the business.

When we met, they were a study of contrasts. John was energized and out the door at 5:00 a.m., on his way to jobsites and phoning in bid details to Bonnie. Meanwhile, Bonnie was trying her best to keep the home fires burning while also keeping up with the business demands, leaving her engulfed in a dark cloud of exhaustion, depression, and resignation.

As sales increased, Bonnie had became more resentful and less efficient, and consequently John had grown increasingly angry that she lagged at getting the bids out. She wanted to cut back; he needed her to work more.

Focus on what you want, not what you do

A truly successful partnership requires each partner to focus on what each wants - not what each does. So, I tasked John and Bonnie to separately write down their goals and objectives, both as individuals and a team, and to share those thoughts with each other.

"Look closely at the business and determine what it needs to function," I suggested, "and then agree on a way that it can do so without overly depending on either of you."

It was an intense exercise, but imagine what they learned! With this information in hand, they started to collaborate on a new vision for the business - clarifying financial objectives, operating philosophy, and distinguishing characteristics.

Next, they documented their organizational chart and position profiles. They formally decided which positions each would temporarily fill, with the understanding that, as the company expanded, they'd gradually hire employees to free them of each task.

Beating the odds

John and Bonnie agreed to hold twice-weekly "stakeholders' meetings," and within a month they'd hired and trained a part-time office assistant to support Bonnie. Near term results were that bid processing became more efficient, sales increased, and cash flow improved. John was able to develop a documented apprentice training program, and a third crew has now been added.

To beat the perils of partnerships, you'll need good intentions, open communication, a strong commitment, and a valid strategy. Like any union, the odds of your business partnership not only surviving - but succeeding - can be increased by constantly monitoring the relationship to assure the mutual satisfaction of all the stakeholders.

Checklist:

• Each partner must be clear about individual goals and needs
• Have full agreement about company objectives, principles, and strategies
• Establish clear accountabilities and reporting relationships
• Commit to regular and deliberate communications to monitor conformance to plan