4. Who’s Your Business Partner? Watch Out for the Companion You Keep!

Who's Your Business Partner?

“We’re flooded!” I heard Sara’s worried voice. “Can you believe it? I received a call from the tenant next door, and they said that the workshop was completely covered in water.
Everything we put into it is gone! All our money invested is there! What hope can we have if so many of our goods have been completely destroyed? The boxes are all swollen with water, too!

It’s a disaster! Almost half our merchandise has been ruined, and how can we recover from this setback?

I tried to calm her down by saying, “Take a breath and try not to get panicky. Do you know how much of our merchandise was damaged?”

“I haven’t yet ascertained that,” she replied nervously. “As soon as I call the landlord, he will help me assess the extent of damage.”

“Was Kate with you then?” I asked. There came a momentary silence before Sara began talking again.

“No, she didn’t come. She said it was my responsibility and that either way, I should handle it alone. How could she simply abandon it when faced with such a calamity? We both agreed we should start up this business together. How can she just leave it when everybody knows our business is on its knees right now?

Their relationship has always been strained from the beginning. At first, they had decided to start the business together equally.

However, in reality, Sara did all the sales and marketing, while Kate believed it was time-wasting and money-consuming. Wanting to devote only energy to the production, she sewed all the items and put them into the workshop day and night, hoping that sales would happen naturally.

“Wait a minute! Try not to panic too hard. The most important thing right now is to properly assess the levels of damage and seek compensation from the landlord,” I assured Sara.

“Keep me updated on how things are going.”

“Ok, we need to resolve this one way or another, then we have to have a final talk with Kate and decide whether to end our business partnership. She’s coming here, and I want to tell her everything in person, no matter how scary it is for me…

”I’m scared to be alone; stay here and start something by myself,” Sara thought, sitting in the cafe scaredly, tapping her spoon on the table.

Kate walks up to her table and gives her an icy dry greeting.

“Hi,” she says.
“Hi, Kate. How are you?” Sara starts, trying to find a way to talk about issues.
“I’m good! So, start talking about what happened at the stock yesterday….” Kate replied.

“What happened? It flooded us from upstairs. I spent half of yesterday counting inventory and starting negotiations where it could cost us more money or they would release us from the lease agreement. Let’s see what kind of response I get once they return,” Sara started telling her story.

“Well, at least we save some money there. Not like I care, though,” Kate commented.

Those words pushed Sara over the edge.

“We need to have a serious talk here. I think it’s time to cut loose our business partnership cause we have completely different ways of running a business. And sorry to say, but I don’t think we can make it work out…”

The silence which followed stressed Sara more than Kate’s usual rude comments.

“Wow! Ok, let’s get down to it then,” – Kate surprisingly reacted calmly when confronted with Sara’s words. Sara had expected a different behavior.

“In that case, we are just gonna divide the leftover assets equally, and that’s it, right?” she headed ask.

“Yes!” – Sara agreed quickly.

“So according to you, there are about 80 kits, 7 yards felt, 60-70 finished calf pieces and beads and accessories….” Sara began to list.

“Great! See you later then…” Kate rushed toward the exit.

“What the hell that was?! Why weren’t there yelling accusations and complaints like during the common dispute with Kate? Something’s wrong here, dammit.”

The next morning Sara reached the stock. She realized the lock changed when she tried to open the door.

“She changed the lock?! DAMN!!! Why were you able to do such sneaky stuff behind your back? Who knows?

Sara tries to call Kate to demand an answer for whatever must have happened between them, but guess what? Kate locked her out of the Instagram account joint together.

“Kate!!! Why did you change the workshop lock?” Sara could not control her anger. “Wasn’t I supposed to? We agreed that I would take half of the merchandise. So I took my stuff and left yours in the workshop. We didn’t discuss the lock, so I had every right to change it,” Kate replied.

“Where’s my laptop? It was there yesterday. Did you take it?” Sara couldn’t calm down.

“Don’t worry; I have it. Come over here and get it with your share, too,” responded Kate calmly.

Sara hung up and ran to Kate’s house, where Kate remained calm and collected. “Hi. Here are your things in these bags, and take your laptop, too.” She handed over the primary data repository for their joint project.

After a glance at the bags in the hallway, Sara yelled angrily, “But this is not one-half of what was in the workshop! More than most likely, thirty percent. We agreed on fifty-fifty.”

After that, Kate calmly replied, “I counted everything, and that’s how it came out. I will keep it if you don’t want to take this batch. Do you agree?”

Sara looked into Kate’s eyes, shocked by her cruelty. After an interval of silence, Sara’s voice trembled with resentment as she said, “Fine, I’ll take these bags, and I don’t want anything else from you! Sell them however you wish. The important thing is that it’s without me. Goodbye!”

Sara quickly picked up the shopping bags, tucked her laptop underneath one arm, and walked out. In the car, she counted the sets and realized there were only twenty, about 25% of the remaining sets. Then she thought about her laptop. “I wonder if everything is still on it?” Sara asked herself.

Unfortunately, that wasn’t true anymore: all the accounting spreadsheets and client and partner databases had been erased from the laptop. Sara was desperate and furious, thinking, “What an idiot I am!” She wondered what direction she could go next.

Who's Your Business Partner?

– Who’s Your Business Partner?

Choosing a business partner

The success of any venture depends on choosing the right business partner. Entrepreneurs and business owners must be careful about pitfalls since a significant mistake when going into business is partnering with someone wrong for your needs. A bad partnership can drag down your business after years, so it’s good to take the time to find the right partner.

A successful business partnership is like a marriage. You wouldn’t get married to somebody you don’t think shares the same values as you do or has the ambition you desire. The same principle applies in forming a partnership. You shouldn’t create one with the first person who comes along just because he/she sounds promising. A reliable partner makes all the difference in running a busy small business or an aspiring entrepreneur’s relationship.

Successful entrepreneurship involves emotional commitment and practical support. Since entrepreneurship usually carries financial distress, a vast emotional pool and emotional comfort come in handy too. Even through hard days and long hours, you’re in luck with your partner by your side celebrating great moments of acclaim.

What Causes Doubt in Our Abilities and the Search for Partnership Support?

Fear as the Main Driver

The main reason that causes us to doubt our capabilities and look for support through partners is fear. We are afraid of mistakes, losing money, or the need to understand many things related to starting a business. When we have problems deciding between the strong urge to start a business and a heavy presence of fear, we often look for a partner.

However, this partner can become more of an obstacle than a help. To avoid this pitfall, let’s first decide what fears we have and how to relieve them, and also learn about choosing a reliable business partner.

One of the main concerns is how not to go broke. It’s extremely risky to invest our hard-earned money, whether 20, 30, 50, or 100 thousand dollars, and not to see any returns. We might think that spending with someone else will make it easier. After all, is the risk of losing money half as bad?

But there’s a very important point. Business partners are chosen mostly based on their readiness to believe in our idea and compensate for the first investment. This approach needs to be corrected. If the entire focus is mainly on money, we better find an investor who recognizes the potential of our project without doing anything directly interfering with the business.

Why does one feel the need to avoid failing? It’s a desire for more insight on how to start a business. In fact, ignorance brings us closer to finding another ignoramus who can join us. However, “two heads are better than one; we’ll figure it out together somehow” isn’t correct here.

If you discover gaps in what you don’t know, doing things such as being very serious about your studies and seeking mentorship from those who have traversed a similar path is better. Don’t be embarrassed by not knowing things. It’s better to admit that you haven’t grown yet and survive by studying hard or getting help from someone already into something than to rely solely on yourself and/or a partner who has no idea how a company actually functions.

So, if your intention of finding a business partner is driven by:

  • Avoiding bankruptcy
  • Believing it’s easier together
  • Minimizing financial investment

then you don’t need a partner!

In such a case, it’s almost certain that the partnership will not yield positive results. It will likely lead to disappointment and strained relationships. Instead, start by investing in yourself and your education and acquiring knowledge from experienced mentors.

The Principles of a Successful Partnership

When choosing a business partner, look at their experience, knowledge, and passion. It can save you from making the same mistakes others have made. Choose someone who brings something new to the partnership.

A written partnership agreement is important. It discusses responsibilities, expectations, and potential exit strategies. Planning for the worst-case scenario is required – when one partner wants to leave or sell their share.

A good business partner can help you navigate tough challenges, handle the financial aspects, and share the workloads. The right partner should have complementary skills with a shared commitment to the business’s success.

Personal lives are key considerations when moving on to business partners. Partners don’t need to be best friends, but trust and respect extending beyond the business realm are essential. Each other’s actions and personal choices affect your business, so it’s vital to know and understand each other’s values and ethics.

Every business partnership has its good times and bad times. When something goes wrong, the partners must not just be able to speak out openly and come to solutions together. Here, the impact becomes evident in choosing the right partners. Greater knowledge, different perspectives, and being able to handle conflicts constructively work towards steering the business back on course.

However, if you have decided that a partner is essential for your business, remember the basic principles of a partnership:

  • Trust. It is crucial to have confidence in your partner’s honesty since it is impossible to control every step in a partnership. Each person should have the freedom to act within their area of responsibility.
  • Establish clear terms and conditions upfront, including how you will handle disagreements or separations.
  • Clearly define each partner’s role in the joint project, avoiding overlapping responsibilities to minimize conflicts.
  • Complement each other’s skills and knowledge. This invaluable practice enables individuals to reach their fullest potential while developing stronger relationships.
  • Avoid destructive criticism. Instead, support and uplift each other rather than drag each other down with constant criticism and complaints.
  • Equality. If you or your partner subconsciously believes that one person has an advantage, the partnership will likely fail. Both partners must stand on equal footing.

Finally, choosing the right business partner is one of the most important decisions a business owner has to make. A good partnership requires complementary skills, common values, and a signed document defining expectations and describing the partners’ exit strategies if things sour. Don’t rush it. Top pick wisely, and invest in a partnership that will contribute to the longevity of your venture into business ownership.

And the most important rule of all: Even if you decide to part ways, you must stand up and keep moving forward!

Assignment 6. Write down your fears that prevent you from starting a business on your own.

– Who’s Your Business Partner?

Assignment 7: Write the ideal conditions for a partnership.

Personal characteristics of the partner

4. Who's Your Business Partner? Watch Out for the Companion You Keep! - Jana Toys

– Who’s Your Business Partner?

Functionality / Area of Responsibility

4. Who's Your Business Partner? Watch Out for the Companion You Keep! - Jana Toys

– Who’s Your Business Partner?

Terms of partnership

4. Who's Your Business Partner? Watch Out for the Companion You Keep! - Jana Toys

– Who’s Your Business Partner?

What to do if the partnership is cancelled

4. Who's Your Business Partner? Watch Out for the Companion You Keep! - Jana Toys

– Who’s Your Business Partner?