Starting a Business with Partners

Working with business partners can sometimes be tricky. Differing egos, experiences and ambitions come into play, and over the short or the long term, these differences can really affect the ability of a business to succeed. With all of these different personal views in play, it is wise to keep your team small. I’m of the firm belief that too many cooks in the kitchen spoil the meal. From personal experience I would recommend a two person partnership. At the very absolute highest, three. Any more than three total partners and you’re asking for trouble.


The problem with business partners is that you are not always on the same page. Sometimes you start in the same place and grow apart. Other times, you begin at odds (which begs the question of why you would want to begin in the first place) but then you grow to appreciate each other (sort of like an arranged marriage).


Another issue with having business partners is that among yourselves, there may be no hierarchy. This type of partnership may arise if two (or more) people develop an idea together, and therefore they both feel a strong sense of ownership over the idea/business. If each partner is an equal owner in the business, and there is no singular leader, problems may arise because there is no one person to be the end all be all decision maker. Although this may be a difficult structure to work in, mutual respect plays a big role if this type of partnership is to succeed. In order for it to work, the partners may need to agree that a majority decision wins. For example, if there are three partners, and Person A, Person B and Person C all want to go in a different directions, they need to have the mutual respect to actually listen to each other's viewpoints and discuss the merits of each. If A, B and C go into discussions with open minds, they should be able to agree on one proposal, or even come up with a 4th proposal that encompasses a little of each. The major downside to this is that it may take some time before the group organically realizes which decisions need group approval and which don't.


The more popular group dynamic arises when one person has an idea, then enlists the help of a second person to make the idea a reality. In this dynamic, the first person would probably be seen as the leader (As Mark Zuckerberg was with early facebook) and the others, although partners, would fall in line with the final decision of the leader. The benefit of this dynamic is that group consensus isn't necessary so decisions can be made a lot faster. The downside however is that if the leader isn't that good a business owner, the captain may bring down the ship.


Finally, when working with partners, it’s sometimes best not to assign roles. This may go against what you may have read elsewhere, but from personal experience, when you start a brand new business (especially the type of business that none of you have owned before), there comes a settling period where people become settled into a natural role. For example, at BroBasket, I processed all the orders and get the paperwork organized, because I liked it done a certain way. James was in charge of all marketing and website activities because he 1) had a background in it and 2) Was passionate (to some degree) about it. And Mike handled all the customer service calls and our corporate bookkeeping etc. We didn’t sit in a meeting one day and delegate these responsibilities to each other, they just naturally happened over time as each of us started doing more of what we enjoyed. The only time we needed to discuss roles was when certain things fell through the cracks. Basically an “if a then b” type situation. But those were more process related than anything else.

Another thing you may have heard is that you all need to have the same vision. I think this can be both true and false. I think having the same vision from the beginning is extremely helpful, and it would cut down a lot of the discovery phase, however even if you don't all start with the same vision, once you’re all like-minded (read: entrepreneurial) once the market tells you exactly what your business is, then you should all end up pivoting into the same direction anyway.


Regardless of the number of total partners in a venture, or whether or not you share the same vision, when it's all said and done, it would be pretty hard to start a sizable business without having at least one. So don't let the potential downfall of thus group project scare you from creating something great.