Should you partner and how to form a partnership are common startup business questions.
Finding a partner can help accelerate your e-business growth but it can also be dangerous. Here are some of my strategy tips for how to start a new partnership thanks to a question from a ClickMillionaires.com member:
My new website has lots of potential and I have many great ideas for growing it. But, I have not implemented many of them due to a shortage of time and a lack of expertise.
Enter my potential partner. She has more time and knowledge, and she is also more involved in social networking than I am. Should I "propose" to her? Any major pitfalls I should consider in proposing a partnership?
Culver City, California, USA
SCOTT FOX'S ANSWER
Finding a partner to grow your new business online can be a great way to accelerate your success.
The standard (and critically important) partnership advice here is to sit down with your friend to talk through roles, expectations, etc. Spend some time planning together and talk through specific growth or marketing plans you have to see how she can contribute.
I would be careful about using the word "partner", however. That implies a 50/50 split before you even have the discussion!
I would also be sure to get it in writing. Whatever "it" is doesn’t have to be a formal contract but even just a series of emails can be VERY handy later.
How to Partner Strategy Tips
Then I have 2 additional non-standard partnership strategy points that can help you avoid a nasty partnership "divorce".
Date Before You "Marry" Your New Partner
1. Start thinking and acting like you own this venture (because you do) and that it's already valuable (because it is). If your new partner wants to be part of it, that's great and you're happy to share IF she performs.
You don’t need to "get married" and give up ownership to her as a full partner if all you really need is to incentivize your potential partner with a revenue share or profit-sharing.
For example, how about she gets 30% of the revenues for 3 years but you continue to own the company? That leaves you in charge of the real decisions but pays her for her help with no immediate cash out of your pocket.
Even if you want to make her a full, equity partner you don’t have to just give her 50% of the venture all at once. Instead she might earn X% per month for as long as she continues to meet expectations and mutually agreed goals. (I know that sounds awfully lawyerly but you can soften it up, of course.)
How About a Partner "Pre-Nup"?
2. Partnerships don’t usually fail when things are going well, they fail when times get tougher.
So, I would spend as much or more time planning for bad scenarios:
- What happens if 6 months from now she isn’t interested anymore?
- What if she (or you!) can only work part-time because of a new baby or sick relative?
- What if she gets sick?
- What if she moves?
- What if she decides to start a competitor?
- What if she fades in and out of involvement?
- What if she wants to continue but there isn’t enough money for both of you?
- What if the business needs to raise money or you need her to pay her own expenses to travel to some conferences?
- What if you need to bring a third partner?
- Etc. Etc.
You can and should consider these many common partnership scenarios and agree in writing as to what happens to your partnership (and each partner's responsibilities and compensation) in each case.
I also recommend reviewing Chapter 24 "Partners – Should You Share Your Million Dollar Idea?" in my first book, Internet Riches.
So, to continue the analogy from above, how about slowing down your "partnership" process?
A "quickie wedding" is not your only partnership option.
Instead I'd recommend some dating first, then a long engagement, and then a written "pre-nuptial" partnership agreement, too, before you just elope to Las Vegas!
I hope that's helpful. Let's discuss more in the Click Millionaires Forum.
All my best for your success,
Do you have partnership strategy tips to share?
What has worked (or not worked!) for you when partnering with others?
Thanks for reading and commenting.
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