Originally Posted by JGAviator
Just doing some research...
I know with the online businesses, it's probably easy to say that it's better not to have partners, but for people that might have a "brick and mortar" style business, how do you feel about having partners???
Do you currently have partners and if so, do you still like the idea of a business partner?
How would your business be different if you did or didn't have a partner?
If you have a partner, how is the ownership divided (ie: 50/50)?
Thanks for your input...
I've had partners in online and B&M and can tell you from experience that it's much easier without partners. Especially when partners are 'friends' or even acquaintances.
It comes down to personalities, sensitivities, emotions and attitude. So much time and effort is wasted trying not to offend or insult the partners. So much is lost when partners cannot agree or even if they feel like there is a disagreement. For me, the most difficult parts have been emotional.
I've resolved not to have partners ever again though it's a resolution that is not cast in stone. If I were to consider a partner again, I would either have to be a funding partner only, or in full control with the last word.
If you choose to have a partner, and I know many people need partners to get off the ground, be sure and write up a simple memorandum of understanding that outlines the roles of each partner. Make sure everyone is clear who make what decisions.
Another caveat, make sure your partnership agreement includes a first right of refusal clause that will allow you the exclusive rights to the partner shares if they choose to dissolve. This is important if you don't want to receive a letter in the mail notifying you that your partnership is now with someone you had no intent of being partners with.
In the end, I've found that having a partner equates to 'a feeling' of less ownership; an attitude of less worth; a little less enthusiasm for the end result. Yes... it's an emotional thing.
That said, my life partner and I share everything and do so willingly, though even there we make concessions, we have disagreements, we sometimes don't get what we might want individually. A business partnership is much like a marriage, whomever you've decided to partner with is now your companion of sorts and you will have to deal with the "better or worse" in the end. Hopefully, you won't get it in "the end" through the partnership.
There are ways to gain private financing through partnership agreements... just be clear that it is a financial arrangement and not an operational one. Be ready to stand up for yourself when (and it will happen) your financial partner wants to dictate how you will run your business.
If, you are considering a partnership to expand an existing business, consider a limited partnership for that area of your business. For example, you build airplanes and you find the best interior person in the world. You can offer a share in that aspect of your business through profit sharing for interior work or even fractional ownership in the interiors division.
Some of the best advice I've ever received was from a friend when I told him I was considering a partnership. He advised me to seek the counsel of a qualified attorney to review the agreements and modify them so my best interests are protected. This is exceptionally difficult when considering partnerships with friends, but the fact is, the prospective partner doesn't even have to know you received counsel or that the modifications came through an attorney... just do it on the sly and no one will get offended. (there, we're back to emotions again eh?) On second thought, if you want to go to a lawyer and your partner is insulted by this... RUN WAY! They will not be able to handle the other hard decisions in the future. Again... in my opinion.
There you have it. If you can avoid partners... do it. If you want to motivate a key employee, offer profit sharing. If you are seeking funding, arrange a financial agreement with payment schedules or like a private stock arrangement. But in my opinion, partnerships are much more trouble than they're worth.