A Case for Business Partnership
I’m writing this review because I think there’s a lesson to be learned in “Business Partners Can Enrich or Ditch a Start-Up”. The lesson is that a business partnership has the potential to more than double the power of each individual. The objective of a partnership should be to be bigger, better, or stronger than each partner alone. A strong partnership can be highly successful.
In her article, Laura Petrecca covers the good , the bad and the ugly parts of a business partnership. She quotes Barry Nalebuff, a Yales School of Management professor, who co-founded Honest Tea with former student Seth Goldman. He says “his partnership helped propel Honest Tea from $250,000 in sales in 1998 to $13.5 million by 2006. In 2008, Coca-Cola purchased 40% of the firm.” That’s quite a success story.
Laura’s case for a partnership is the extra skill set a partner provides, if done correctly. “With a company comrade, there is always someone to brainstorm with, to share work duties and, of course, to help carry the financial burden. An agreement covering the ownerships structure, financing and division of duties is a must”. And be sure to address contingencies like what happens if a partner becomes disabled or dies.
Laura includes examples and tips on handling issues between married partners, as well as family and friend partnerships. Reporting on two high school friends who formed a partnership, she quotes “Things have been a little rocky, but we’ve managed to stay afloat, …I think (the troubles) have helped our business get stronger and our friendship get stronger.”
Family Business 1
Some of my clients are in family businesses. They face not only the challenges of running a small business, they must deal with the historic family dynamic. Makes for a lot going on.
Here’s one client’s history on how family/business challenges were resolved.
Barbara (anon.) took over her father’s janitorial and commercial maintenance business several years ago. Even though Barbara now owned the business, the father kept doing what he had always done: he did the work and got help where needed. Barbara had to be both business manager and field supervisor.
Realizing that she could qualify for minority/women’s contracts she began to bid on city and other large institution jobs. As she got new business, she realized she needed someone who could do specific field supervisory work. She brought in a cousin, Robin, who had no supervisory experience or training, but was confident she could do it. She was also the only person the father would accept in that position.
Needless to say, Robin was no help, but it was only after Barbara sent her for supervisory training that she began to function as a real field supervisor.
But the requested written weekly supervisory report wasn’t happening until Barbara asked her for the report in a weekly meeting with others and she didn’t have it. The reporting did get better, but Barbara is now hiring another field supervisor to train along with Robin as the business grows. When Robin learned Barbara was upgrading a staff member to supervisor her performance improved dramatically. (Just like the eel in the fish tank.)
Then there’s Darla, Barbara’s sister, who handles accounts receivable and payable, as well as functions as HR manager for 18 field staff. Barbara had to institute a regular report from Darla in order to know her financial status. It took scheduling a weekly meeting to encourage the discipline needed to stay current.
Finally, Barbara’s daughter, Jade, who is attending college, is also helping Darla. She’s not only learning the cleaning and maintenance business she’s also learning how to get things done.
That’s five family members in one business. At this point things are working well and the business is continuing to grow. Everyone needed to accept responsibility for carrying out their responsibilities efficiently and effectively and keeping the communication flowing. Now the business is really poised for growth.