by Matthew Brock of Divergent Planning

“If we are together nothing is impossible. If we are divided all will fail”
Winston Churchill

Not every business owner desires or needs a business partner. However, many small business owners find themselves in a position where they at least contemplate finding a partner. It is not a decision to take lightly. Other than choosing a spouse, I don’t think there is another decision you should be more certain of before acting. My business partner and I began working together in 2003 at a national financial services firm. We were young and decided to share our client cases (and revenue) on a whim. We were lucky.

Most partnerships formed this way do not last. We saw no less than a dozen other advisors at our firm form partnerships that failed. Over the past 7 years we have come to fully understand what makes our relationship work or where others failed. Our strong partnership is part of the reason why we were able to leave the comfort of our large firm and start our own company this year.

Here is what we learned…

Share a Long Term Vision – It may go without saying but it is imperative a potential partner have the same vision for the company as you. Write down your vision and ask any possible partners to do the same. How close are the visions? You don’t need to have every detail the same but the general vision must be in alignment.

Agree on Short Term Business Goals – Similar to a shared vision, having the same short term goals are important. A partnership must get off to a good start so you certainly do not want to have any major disagreements early on.

Have Varying Skills – While you need to have some things in common, having a partner that is too similar can also be destructive to a small business. Look for someone who may have skills that you lack. For example, maybe you are excellent at operations and actually running the business but you are awful at networking and sales. Look for a partner whose strengths are your weaknesses.

Have Different Likes and Dislikes - Find someone who likes doing what you hate. I hate managing client investments (I know, weird for a financial planner) but my partner loves it. He hates operations and business development while I get a lot of satisfaction from that part of the business. I am an early riser and like getting things done early in my day but my partner is a night owl and is more effective late in the day. You have to embrace these differences.

Run in Different Circles – It is great to be friends with your business partner but it can also be extremely useful to have a different set of friends and a different network. Running in different circles expands the reach of your small business. Go to different gyms or churches, play on different sports team and go to different networking events. Both partners should be capable of representing the company on their own.

Communication – The need for communication cannot be understated. The person you partner with must be someone you feel comfortable criticizing and that is comfortable criticizing you. Of course, it is equally as important that both of you can take this criticism. Partners in a small business need to have somewhat thick skin. I have heard many times that one of the keys to a happy marriage is to never go to bed angry. I think the same holds true for small business partnerships. Never leave the office angry.

Operating Agreement – Make sure you have an Operating Agreement in place. The process of putting this together can bring out communication that otherwise may not happen. Not to mention the fact that it can help cover you just in case you find out you chose poorly.

A great way to test out a partnership before taking the plunge is by doing a volunteer project together. This gives you the ability to see how your potential partner acts under certain circumstances. It can give you a good sense of what it would be like to work with them in your business. The most important thing to remember is that partnering is not right for every business owner and definitely do not do it just so you can work less. Do it so you can work more on your strengths.

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Matt Brock is Co-owner of Divergent Planning, LLC in Rockville, MD where he oversees operations, business development and financial planning systems. Staying true to the name of his company, he believes there is a major difference between the financial needs of younger generations and this is going to drive major changes in his industry.

Website: www.divergentplanning.com | Twitter: @matthewbbrock
 


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