Two brains are better than one … or two many cooks spoil the broth?
Yesterday evening I finished work at around 10pm, and went for a well deserved beer with one of my business partners. My wife and children would already be sound asleep at this point. That’s another night I didn’t get home to see my 2 year old daughter and 6 week old son.
Our website design business is still in its infancy in many ways, but it has come a very long way since its rebirth last autumn.
- We worked hard in the formative stages on producing a product that was a “no brainer” for our customers, but also one that would be viable for us.
- The next stage was to prove we could deliver the web packages we designed.
- The next stage was to work on building the volume of enquiries we got.
- Then suddenly beyond our wildest expectations, the number of enquiries grew exponentially.
- We had to increase our capacity to handle those enquiries, and the subsequent business. This meant recruitment and training.
- We had to work on a strategy to manage our relationships with our existing customers amidst the madness. This meant careful prioritisation and basically working longer hours.
- We had to work on a way to filter and share the enquiries that were coming through, so that everybody got a call back. We opted for Salesforce.com.
- We had to implement a system to manage the accounts and billing. We opted for sage.
- All the time we had to keep getting the job done, and dealing with the usual business administration.
Here’s the point:
The above developments have all occurred in an 8 month period, and there’s just no way I would have progressed the business this quickly alone.
Had I taken the view that I wanted a larger share of the profits and more control, it would have come at a cost to the development of the business, the number of times I get to put the children to bed and my enjoyment of what is now a very fun, energetic and exciting business.
I have been lucky. My business partners to date have included: My dad, a good friend and somebody who originally came to work for me. Important qualities in your relationship with the person you choose are:
- You have to be prepared to give honest criticism and to hear it.
- Your relationship should be built on trust and respect, such that if things do go wrong, you can keep a clear head and act fairly at all times.
- You have to learn that blame and praise is irrelevant. It’s all about making the business work.
- You have to know the person that you are partnering is as committed as you, and similarly they will demonstrate it in different ways at different times. Everybody has good days and bad days.
I don’t have experience of starting a venture with somebody I didn’t know because to me it feels like too big a risk.
- What if they aren’t as smart as you initially thought?
- What if their commitment/interest/focus/attention shifts?
- What happens if they don’t hold up their end of the deal (I guess that you become resentful about holding up yours)
Seth Godin wrote a nice article about finding a way to divide up a business with partners. Essentially you allocate a percentage of the business against deliverable (measurable) tasks or results.
i.e.
- designing / implementing the product is worth 20% stake
- getting the first 5 key accounts is worth 35% stake
- task x is worth 15 % etc
If you figure out who is responsible for what at the beginning, and the value of that contribution in relation to the ownership of the business, it creates an environment where everybody is allocated a stake fairly according to effort and results. This can save resentment and disappointment further down the line.
So to summarise, there is no linear answer. Every business is different, every person is different. Your answer should boil down to:
- What skills/input can your partner provide that you can’t
- Can you find a share allocation you can be happy with (or a plan to distribute it based on contribution)
- Can you find a partner you can trust?
- What is the benefit of growing the business quickly vs. greater ownership of a slow-burner?
- How valuable is your free time? (Much harder when you have children)
- Are you the sort of person that can collaborate and share?
For me, I would always look to work a solution with a partner first. Share the risk, share the load, share the rewards, share the enjoyment and most importantly, share the inevitable headaches.
