Is it better to go it alone or with a partner? It’s a question nearly all first-time entrepreneurs struggle with. Unfortunately, there is no one right answer, just the proverbial response: It depends. I’ve personally found my greatest success with a partner at my side. But that doesn’t mean having a partner is the best approach for everyone.
There are pros and cons either way and several factors to consider if you are contemplating creating a partnership and launching it on the path to success.
The Plus Side
On the plus side, having a business partner with a complementary skillset – one that does not mirror yours – can add value beyond what you alone can do for the business. Sylvester Stallone said it best as Rocky – “She’s got gaps, I’ve got gaps, together we fill gaps.”
There are also multiple reasons while having a side kick is advantageous during the search process. For example, the cliché that two sets of eyes are better than one is a real advantage in the due diligence process.
Plus, investors and sellers will likely view a team of buyers as a less risky proposition than a solo buyer – especially when the buyers are new to the acquisition process.
Then there is the additive impact of division of labor. Quite simply, whether you are searching for an opportunity or developing a business plan, two people get more done than one person can alone.
And speaking from experience, having a partner can make it a more enjoyable ride and create a lasting friendship for life.
The Flip Side
On the flip side, not all partnerships are a match made in heaven. Partners can clash over countless things, including conflicting work ethics and financial goals, roles in the business and leadership styles. Without a clear delineation of authority, power struggles can emerge and thwart progress and compromise success.
Partners can also disagree on the best path forward for a company. I recently witnessed a scenario where two partners had grown a small business to the point where they were enjoying a comfortable lifestyle. One partner wanted to run the business at status quo and reap the profits and the other more growth-minded half preferred to forego the immediate gain and reinvest back into the business to drive future growth. Yes, you guessed it. In the end they walked their separate ways.
Finally, lack of communications is perhaps a partnership’s worse enemy. Think of it like a marriage; solid communication is the foundation of success. The inability to comfortably express your opinions, ideas and expectations is a prescription for failure.
If you chose the partnership route, here are five lessons learned from my personal experience to help you get it right.
- Avoid the “Mini Me” Syndrome. If you’re not familiar with the term, the ‘Mini Me” Syndrome is a theory in sociology that people tend to form connections with others who are like themselves. I’d argue that opposites make the best partnerships. If you are detail oriented, consider hooking up with someone who sees the big picture. If you are an introvert, complement your thoughtfulness with an extrovert who is more outgoing. Or, thinking terms of division of labor, if you are great at sales and marketing, find a partner who thrives in the shadows pouring over financials or excels at operational oversight.
- Agree on what type(s) of business and industry you want to acquire. I am a big fan of pursuing opportunities that align with your personal strengths and interests. Take me, I am an industrial engineer by training. I chose a manufacturing business as my first acquisition over a high tech or a myriad of other types of businesses I could have acquired. Approaching the acquisition process with shared sense of interests will make your search process more efficient and the probably of a successful outcome greater.
- Get to know your potential partner first. Spend time to get to know him/her. Find out if he/she shares your personal and professional values, ideas, and goals. Consider testing the partnership by embarking on a small project together that showcases each other’s skills and requires collaboration.
- Agree on a clear delineation of responsibilities. Just like a pilot and his/her co-pilot, you cannot both ultimately be the captain. Agree on a clear delineation of decision making and who is responsible for what aspects of the business. And realize that while you may be an equal owner you may need to delegate authority for the sake of the business.
- Have a plan for conflict resolution. I’d suggest putting a Board of Directors or Advisors in place and escalate differences to them for resolution.
If you are reading this blog, you are probably seriously contemplating your future as an entrepreneur through acquisition. If going it alone is the best route for you – do it. If the partnership route is best for you, find the right partner and make it happen.
Either way, I hope your entrepreneurial experience is as fun and rewarding as mine has been.