Do you often feel that you need a second opinion before doing something?
Have you outlined a great business plan, but you don’t feel confident enough to do it alone?
Would you rather bring your business idea to fruition faster?
Is the workload too big for you, but you can’t outsource, because you don’t have the money?
If you answered “Yes!” to at least a few of these questions, then you might benefit from having a business partner.
I answered yes to those questions just over two years ago, when I met my business partner.
Over the last two years, I’ve learned a lot about partnerships – what works, what doesn’t – and I wanted to pass on those lessons learned. These insights will be beneficial for you if you’re thinking about forming a business partnership, or if you’re already in a partnership.
The Power of the Internet
Around two years ago I started a business partnership with a young lady from the other side of the globe. She seemed to have a lot of experience in business. And me? Well, I was an inexperienced, self-taught marketer, still trying to figure out what was what in the online business world. Joining forces looked like a good opportunity for both of us to learn together and grow a business online
We started working on building an online business in the self-improvement niche. We communicated through Skype and to this day, I haven’t met her in person. That’s the power of the internet: you can build a business with someone without even meeting them.
We launched our business by creating our first product. The goal was to make one million dollars in a year. I remember being a bit skeptical about it, but a million dollars is hard to ignore. I started dreaming of the car I’d buy with the money we earned.
To make a long story short, we made 5 sales of our $47 product, and everyone refunded. This is when I realized that my business partner and I were pretty much at the same level of experience – both still trying to figure out the whole online business thing. The difference was that I wasn’t as ambitious as my partner.
We kept on working, building our list, making some money here and there, until very recently we decided to split the roads and start working by ourselves.
Lessons Learned & Insights Gained
Although our partnership didn’t hit it big, I learned a lot about what it takes to make a business partnership work. If you’re thinking about a partnership, here’s what you need to watch out for.
Take Care of the Legal Stuff
Okay. This sounds pretty obvious, but – you need to take care of the paper work when you form a partnership. My partner and I didn’t do this, I think for several reasons:
- I didn’t think the business was going to make it big, so I didn’t feel the need to spend money and time on getting a legal agreement. (Note: our business started being profitable only after a year or so.)
- I was under 18 years old so, I imagined the paperwork would be super complicated, having to get my parents to sign agreements, etc.
- My partner was from another country, and I imaged that would make the paperwork even more complicated.
Instead of getting our legal ducks in a row, we worked under a word agreement that we are going to split the profits 50/50. Not a good idea… Definitely make sure to take care of all the legal documents, if you are in a serious partnership.
Don’t Do the Same Thing Twice[clickToTweet tweet=”A necessary component for a successful partnership is trust in your partner’s skills.” quote=”A necessary component for a successful partnership is trust in your partner’s skills.”]You need to be confident that he or she can do a good job and you shouldn’t question it, or revise their work over and over. This wasn’t really an issue for us at the beginning, but we sure did question each other’s competence towards the end!
For example, towards the end of our partnership, a simple task of sending an email to our list, which could take no longer than 15-30 minutes, became tiring work for a whole hour. I wrote the email, then she wanted to look at it. She made her edits, I usually disagreed with some of them, and a discussion started about how a single paragraph should be worded. In the end, we end up with a slightly better email, but we spent double the time and energy on it. Personally, that was driving me crazy.
It’s not necessary to do the same work twice. If you really think the project needs some tweaks, let your partner know, but don’t make it your job to manage his or her work.
Have a Clear Business Plan
This is another obvious one, but it’s definitely one we overlooked: you need to come up with a business plan.[clickToTweet tweet=”All the actions you take should be in alignment with the plan.” quote=”All the actions you take should be in alignment with the plan.”]
My business partner and I didn’t have a plan at first, because we didn’t know how our business would grow or evolve. In the beginning, we focused on our desired income, and not on how we would get there. Later, once we got a bit more experience, we came up with a simple plan and decided on some key places to focus on. We managed to get ahead quite a bit, because we weren’t so scattered and wondering around aimlessly.
Your business plan doesn’t need to be super complicated. In fact, its main objective is to provide guidance for all your actions so that you can evaluate what you are doing. It’s easy to stop and ask if your business plan is going according to plan, or whether you’ve gotten off track.
Give Your Undivided Focus and Demand the Same From Your Partner
One of the big problems that held us back was our divided attention. Both of us were still at school and of course that took up a lot of our time. Also, I spent some of my time working on my internet marketing business as a plan B, in case our partnership doesn’t work out. So, I didn’t have a lot of time left to work on our mutual business and that led to poor results overall.
Now, you need money to live and, if your business isn’t profitable yet, you will need to work in a 9 to 5 job to provide that income. If this is your situation, it would be hard to give your undivided attention to a mutual business and that’s fine. It simply means that now may not be the best time to start a business – or a business partnership!
In my case, I should have stopped working on my own internet marketing business. I should have focused on our mutual business; it would have made a great difference to our results.
The lesson here is twofold. First, don’t spread yourself too thin – you’ll be setting yourself up for sub-par results. And second, you need to demand the same kind of focus from your partner. After all, you don’t want to be the only one working, do you?
Hold Monthly Meetings
In the beginning of our partnership, we didn’t plan any sort of meeting. But we found out pretty quickly that stuff changes fast, and you need to do frequent course corrections for your business. Once we started holding monthly meetings to discuss what was working, what wasn’t, and where we could focus next, we started to see fast growth.
Our monthly meetings went like this: Before each meeting, we made ourselves short checklists of topics that needed to be covered. On the day of the meeting, we both logged into Skype and started a conference call. We usually began our meetings by checking out our stats: how much our list had grown, what strategies had the biggest impact, how much money did we have in our bank account, etc.
Next, we would evaluate the other person’s work, giving praise and critique where needed. The last part of our meeting was devoted to adjusting our goals and our plans on how to achieve them.
There are probably other meeting formats out there, but this one worked really well for us. Once we started implementing it, our business started to grow much faster. I’m betting yours will too. 🙂
Create Daily To-Do Lists
Two teenagers busy with school and other activities can be very unproductive! Once we realized that, we started experimenting with how to get things done. We wrote down daily tasks for each other to do, and all the tasks were focused on growing our business (write a blog post, send an email to our list, etc). We discussed those lists in our monthly meetings.
A daily to-do list can also be useful if you are a solopreneur. I’m rediscovering this for myself right now and my productivity has increased a lot. I think the daily to-do lists would have worked out very well for our partnership. But, I couldn’t keep up with the tasks, mainly because I spread myself too thin: second business, school, social life etc.
Most entrepreneurs have a lot going on in their lives, so it’s important to both divvy up the tasks of growing your business, and to hold each other accountable for getting them done.
You Can’t Be Lazy In a Partnership
In my opinion, the main reason why my business partner and I split up was because I was being lazy. I wasn’t bringing much to the table. I didn’t do much for the business, didn’t follow the daily to-do list and was behind on other schedules, because I was focusing on too many things.
It wasn’t fair to my partner, who was struggling to grow the business without my full presence or support. And it wasn’t fair to me, since I constantly felt like I had way too much to do.
In the end, we agreed to split up and go our separate ways.
Moving Forward: Life as a Soloprenuer
As I mentioned before, my business partner and I hadn’t taken care of all the legal stuff. Because of that, when our business split up the asset division was not in my favor – hugely not in my favor, I would say.
Nevertheless, these two years have been heck of a learning experience. Even though our partnership failed, I still think it’s a very good way of building a business fast. If I were to form a partnership these days I would definitely do it a lot differently.
Are you in a partnership right now? Would you add anything else to the list? If you are just thinking about forming a partnership, which insight was the one that you wouldn’t have thought about?