Recently in our Virtual Mastermind group for online business owners we have witnessed a couple of great example of partnerships gone right. When you get two positive people teamed up with a commitment to add value to the world, then everyone wins.
Partnerships are tricky things.
In the past month I’ve also watched two partnerships dissolve acrimoniously, with one being between two friends as close as brothers. Their friendship, may also have come to an end. It’s tough to watch.
You must be careful with partnerships.
As with all relationships, clear communication is vital to its success. Expectations must be explicit. Roles and results must be properly managed.
Without attention to all of these details, one can end up in serious trouble, relationships can be ruined, long-standing grudges can be built, and negativity can worm its way into other aspects of your life.
Here’s what I’ve learned over the years with partnerships:
- Partnerships allow a business to grow faster. The best example is the partnership between my dear friends Jeff and Isabel of the BeyondDiet.com. The business would be a fraction of itself if it were just Isabel, and it wouldn’t even exist if it were just Jeff. Isabel’s decision to bring on Jeff to help her was the best business decision she’s ever made. He handles the tech stuff, allowing her to work on her unique ability and her “5%”, as our good friend Bedros Keuilian likes to say.
- Partnerships work only when they are NOT based on money. Partnerships fail fast when money is what binds you to the partner. I’ve never had a partnership go sour, but I’ve had partner projects that just didn’t succeed. These ventures lacked a common commitment to something greater than money. The partnerships that have worked – ETR with Matt Smith and the Mastermind I run with Bedros – are built upon stronger foundations than money alone. First, they are partnerships with friends who share common values. Second, the partnership is about challenging ourselves to succeed, not only monetarily, but over our own obstacles. Third, there’s a big mission and focus on adding value that shores up the partnership. Bottom line: There’s so much more than money to a successful partnership.
- A person’s past behavior is often the best predictor of future behavior. I’ve had friends enter partnerships with people that I knew were a bad idea based on the partner’s past…and yet I didn’t say anything because I didn’t feel like it wasn’t my role. Having watched a few of these go sour, I now won’t hesitate to speak my mind.
As Dave Kekich says, “Don’t enter into a business relationship with anyone unknown to you without being furnished with references dating back at least 10 years. If he doesn’t have good enduring relationships, stay away. Check all representations on which you will rely made by everyone.” – Kekich Credo #54
Sounds harsh, but it’s true. In hindsight, you could look at every failed partnership and say, “You see, that’s why it didn’t work out. That person’s behavior repeats over and over and over again. They burn out a relationship, move on to someone new, charm them, and then the vicious cycle continues.”
You probably know people like that. You’ve seen that happen. Beware you don’t make the same mistake.
But to end things on a positive note...
Watching our Virtual Mastermind member Rick Kaselj work with his business partner Mike on their launch, you can see it’s not about money. It’s almost more about the process, the journey, adding value to the world, and working towards a “Wow, we really can do this”. It reminds me of the story Rick has shared onstage about an incredibly long hike that he did in Mexico. It was hundreds of miles long and his goal was to challenge himself and see what “he was made of”. That’s how I see this launch too. The businesses success is great, but I think the real value in Rick’s eyes is the skill development and competency building. I would expect it’s similar for Mike, and they are both truly dedicated to bringing great value to the end user – and to affiliates.
That said a partnership based on common, non-monetary values can still breakdown. If expectations are not managed, if someone feels they are doing more of the work than the other person, if there are secrets, if someone feels left “out of the loop”, then these crevices in a relationship can become cavernous.
Like I said, I’ve watched it happen recently to two great friends of mine. Of course, it doesn’t help when a partnership consists of two strongly opinionated alpha-males. But, I’ve also watched partnerships breakdown when they involve one of the nicest, most positive people you could ever meet.
I don’t think any business partner is safe from breaking down. People change, for better and for worse. We move on from certain interests. We grow older and lose our passion for things, particularly once you no longer need money. All of these things can change a partnership. Keep those in mind, and have the agreements in place for a fair and amicable split.
I’m not a lawyer, so I won’t tell you exactly what you should have and this is NOT legal advice, but you can base your agreements on your comfort level. A short document outlining the details of an exit strategy and signed by both parties is a great start. There’s nothing wrong with a contract drawn up by your lawyer, either. It would have saved Eduardo Saverin (of Facebook fame) a lot of hassle, right?
Keep all of these thoughts in mind as you grow your own partnerships, but never forget this one rule that is much like hiring an employee:
Enter a partnership slowly, Kill a partnership fast.
(The employee equivalent being: “Hire slow, fire fast”).
When your gut tells you to get out, it’s probably best to listen to it.
Although, hopefully, it should have already screamed at you to not enter into the partnership in the first place.[Ed. Note. Craig Ballantyne is the author of Financial Independence Monthly, a complete blueprint to helping you take control of your financial future with a web-based business that you can operate from anywhere in the world – including a coffee shop, your kitchen table, or anywhere around the world where there is Internet access. Discover how you can achieve the American Dream and your financial independence here. You’ve never seen anything like this before.]