Once you’ve decided to open shop, it’s very tempting to want to be the sole face of your business. As M. Pierre Morrel warns: to have a partner is to have a master. Between personal experiences and what I’ve witnessed with clients, if you have the inclination, it’s oftentimes better to launch a venture with a partner or find one while you’re having the office painted. There’s strength in numbers and you can diversify your talent, which adds legitimacy and keeps you from running your business from a proper location instead of a basement.
Your choice of partner will help determine if you’ll need to be an LLC, LLP, LP, or Inc., or another type of company, and for how long.
Here are a few reasons for partnering up:
I’ve advised clients whose businesses needed a co-pilot in order to take off. Some examples include writers who partnered up with artists to launch media start-ups, and craft brewers who needed a salesperson to go on the road, provide samples and nail down some orders. These relationships were extremely instrumental in shaping the businesses — they brought in clients through existing relationships or attracted new ones.
There’s strength in diversity. While some businesses are so simple you can run everything from a mobile device, it’s the exception and not the rule. In short, it’s doubtful you can be the CFO, CTO, and CEO all at once.
Find at least one or two qualified, trustworthy people to oversee the would-be departments that are not your strong suit. If you’re a numbers person, but can’t stand dealing with people, then find a qualified partner to oversee client relations and sales. It’s very easy to burn out if you handle everything by yourself.
I know two small business owners — a husband and wife — who operate under the same roof but are completely separate entities. She is a party decorator and he’s an entertainment, games and photo provider. They refer business to each other all the time and clients love being able to kill two birds with one stone when planning a major event — like a Sweet 16 or corporate function. If you can find someone whose business is the peanut butter to your jelly and you can cohabitate harmoniously, it may work to both your benefits. I’m not advising you to marry that person. I’ll refer a matrimonial lawyer for that.
The business is part-time so far
You’ve started from your best possible vantage point — it’s okay to start small. It’s good. You’ll develop over time. If your full-time passion is only a part-time revenue generator, then you may acquire or attract new clients by buddying up for a while. Plus when you are first starting out there’s a lot of downtime and this is the most productive way to fill it.
If you are worried about the partner getting more of his/her share of ownership, that’s where Brinen & Associates can help. There are various operating and partnership agreements that can be drafted and amended to reflect your situation. And rest assured, it can be amended later, too, to reflect a good relationship or otherwise. We’ve discussed some approaches in recent “divorce” columns.
To discuss your needs when seeking a business partner, contact Brinen & Associates.