Taking on a partner can yield a range of benefits of your business, as long as the decision is not taken lightly, writes Port Group director Andrew Baker
When Andrew Baker decided to leave his job in 2001 and start his own business, he had no idea what lay ahead, but one too many sales training meetings had tipped him over the edge and he knew it was time to ‘go it alone’. And ‘go it alone’ he did.
Baker founded Port Group, and for the first year he was on his own. But his business grew rapidly and before long he was working around the clock to keep up; it consumed him.
It was a year later when Anthony McDonald joined the business, and Baker was able to reap the benefits of having a business partner. In 2008, Voula Kotsiras became its third director.
Given his experience, Baker said having a partner can be great. Here are his reasons.
The benefits of partnership
1) Motivation & accountability
One of the biggest benefits of taking on a partner/partners is that they motivate you to perform better. You can’t become slack and turn up to work late when your partner is punctual. Likewise if your partner is writing more deals, you naturally want to pull your weight and perform better. A partner brings out your natural competitiveness and sense of justice.
2) Complimentary skills
If you’re looking to take on a partner look for someone who can compliment your skill set. If organisation is not your strong suit, look for a partner that is highly organised. If you like to focus on detail you should be looking for a partner that is more ‘big picture’. Taking on a business partner gives you the opportunity to add traits that will benefit your business and your clients.
3) Risk sharing
As a lone trader, making a big decision can be a heavy load to carry. Sharing that decision with a business partner eases the burden. You can help each other to make the right decision. If it ends up being a bad call at least you share the blame together. It really is a case of ‘a problem shared, a problem halved.’
One of the greatest benefits of having a business partner is that it allows you the freedom to take holidays. Let’s face it, there’s not much point working really hard all year around with no time for a break. In the fast paced industry of finance, down time is essential to avoid burning out. Partners can also cover you when you are sick or attending training courses or industry conferences. A business partner can cover your load while you take time off, and that’s a huge benefit!
5) Cost sharing
There are financial benefits to taking on business partners too. The cost of PI insurance can be a killer and is one cost that can be shared when people join forces. So too is the cost of support staff and overheads like office rent. Sure the profits are split too but a business partner will help you keep wages and drawings in check.
Fronting up to an important meeting with your business partner can create the perception that your business is larger than it really is. This can give you power and credibility in such circumstances.
7) Opens networks
A new business partner will bring with them a whole new set of networks. Do they play golf or football? Have they got an interest in motorsport or athletics? Whatever their hobbies, there’s potential for you to get involved and to make your networks grow. The six degrees of separation theory is alive and well!
8) Idea generation & business planning
One of the really cool things about having a business partner is having someone to bounce ideas off. Someone who is also interested in seeing the business succeed and who won’t get bored talking about work. When you run ideas past each other you fuel each other’s imaginations and give each other the confidence to try new things. As a sole trader this can get lost and you can end up in rut. Planning for the future of your business is more likely to occur when you are part of a team.
Of course one of the greatest things about running a business with others is that it becomes more fun. You can have a chat and a laugh during the day and at the end of the week you can reflect over a couple of drinks.
Handle with care
Although Baker is a strong supporter of taking on a business partner, he believes it should be not be a decision taken lightly.
“Choose someone you really trust and trust your own instincts about a potential person. If your gut is telling you it’s not right, it probably isn’t,” he said.
“Work out a way to trial the person first. Insist on a probation period where you can really get some insight into what this person is going to bring to the business.”
Baker said a fair exit strategy needs to be in place from the start.
“It might all be very exciting and positive at the start, but many business partnerships end up going pear-shaped down the track,” he said. “You have to go into the agreement thinking that is likely to happen and plan for it. Think of it as a pre-nup for your ‘business marriage’”.