You’ve come up with a great idea for a business, and you’re about to make the worst possible mistake as you start the business. You’re about to bring on a business partner.Maybe you think you need someone else to provide the money. Maybe you think you need someone else to provide leadership or credibility. Maybe someone else helped you come up with the idea so you feel like you owe them the chance to be a partner. Or maybe you just need someone else’s skills or resources to help execute your vision.
Whatever the reason is on paper, I’m going to help you out here and tell you the real reason. The real reason why most entrepreneurs get into business partnerships is a lack of confidence.
Because the truth is, you are resourceful enough to solve any problems you run into on the road to success. You have the power, as an entrepreneur, to build up a team of people who fill in for the skills and resources you don’t have.And you must, absolutely must, be the driving force behind your vision. You need to be the true leader. You need to have more faith in your business and you need to look further into the future than anybody else.
All of that comes back to your confidence in yourself, but in case you aren’t fully convinced that business partnerships are a bad idea, let me show you what happens most of the time.
Why partnerships fail
I personally know the two owners of a nine-figure business that was valuated to sell at about $450 million. However, now that their business partnership is falling apart, the business is rapidly declining. They’ve already sunk down below the eight-figure mark and their entire empire is crumbling. And, of course, their buyer has pulled out.
Let that be a warning to you. It doesn’t matter how big or successful you get, a bad partnership will always find a way to collapse. They always collapse for the same reason too: resentment.
There are two causes of resentment in a business partnership. The first cause is an imbalance in work ethic. Let’s say you form a business partnership with someone and agree to 50/50 ownership. Now, because you believe in your vision and you’re hungry for success, you work as hard you can to move the business forward. Your partner notices this and says, “Hey look, this guy’s pulling a lot of weight. I can get away with slacking off a bit.” Next thing you know, you’re doing 60 percent of the work but still only getting 50 percent of the reward. At that point, you’re going to resent your partner for sucking away your money.
Best case scenario, you dissolve the partnership right away. Worst case scenario, you keep giving your partner “second chances” and you keep losing your money and your sleep. Either way, ending a business partnership is a painful and expensive process. There really is no “good” way out of it, which is why you’re better off avoiding this whole situation to start with.
The other source of resentment is when you have conflicting visions for the business. Just like in a bad marriage, you fight over the small stuff because there’s a deeper conflict underneath it all that builds up over time. You might get into a screaming argument over something as small as a logo or a website design, but the real issue is that you both want control and you’re frustrated that you can’t have it.
This is why you should always consider hiring the people you need instead of bringing them on as business partners. You can offer them an hourly wage, a salary, profit sharing — whatever it is, the important thing is that you keep your position as the final decision maker. That way you never have to worry about someone else holding your vision and your financial security hostage.
And for the record, “I need money” is the worst possible excuse for getting a business partner. You can get a loan from the bank. You can create a product and start selling it. The minute you give someone else control of the money, you’ve given them control of your business and your future.
Why (rare) partnerships work
There is only one condition where you should get a business partner: if you and your partner will both work like you own 100 percent of the business and you have a shared vision for it.
This almost never happens. I am fortunate and blessed to have my good friend Craig Ballantyne as my business partner for my Empire Mastermind. Ballantyne is the most disciplined man I know, and we both know exactly what we want to accomplish with our shared businesses.
Even then, there have been previous businesses we had to dissolve because one of us lost our passion for them. In fact, right before we created the Empire Mastermind, we taught an online info marketing group called the 100K Info Group.
After a certain point, I hated running that group. I got so tired of showing people how to turn Word documents into PDFs and I knew from experience that I could help entrepreneurs solve much bigger challenges. So, I gave Ballantyne my honest opinion and we decided to dissolve that online info group and create the Empire Mastermind instead. That brought us right back in line with our passions and our vision for the future, which was only possible because I have such a strong relationship with him and I know I can trust his work ethic.
How to test your own partnership
There’s a good chance you’re reading this right now and sweating because you’re in a business partnership already. You might even be wondering if you made the right call getting into business with that person.
Here’s the one question you need to answer to find clarity on that: If you had to start all over, would you still bring this person on as your partner?
If your gut-level reaction is “no,” for whatever reason, now is your time to get out. If your gut-level reaction is “yes,” then you know you’ve found one of those rare partnerships that can succeed.
And if you don’t have a partnership, but you’re thinking about starting one, just remember this: You have the right as an entrepreneur to be the final decision maker. You can build a team of people who fill in whatever skills or resources you don’t have already. You have the power to hire or fire them as you see fit. And it’s your right — your responsibility — to control the vision for your business.
By Bedros Keuilian|CEO and Founder of Fit Body Boot Camp