Early in my career, as an operator with partners, I experienced the joys of an imploding partnership: enriching lawyers and exchanging money, territories, and grief.
My CPA told me, “A partnership is a like a marriage: easy to get into, hard to get out of.”
Many of my clients love doing their own thing without an official partner (except for, possibly, a spouse back home who functions as a partner).
Others prefer to collaborate with partners, or they want a team behind them where the band makes more impact than the solo artist ever could.
Matthew’s 4 Partnership Necessities
- Trust in Roles. The most productive partners stay in their lane and don’t duplicate each other. They trust their partners have their designated areas covered and they don’t ask a bunch of questions about minutiae. How that works takes thought at the beginning and updates when businesses need change.
- Shared Vision. Partners must periodically campaign with each other to arrive at conceptual agreement on the direction of the business; otherwise, your guests may experience confusion—or, worse, boredom—while employees feel perturbed.
- Clarity on Compensation. Focus partner compensation on the actual value contributed to your company, not the title of “partner.” I have clients where some partners’ only compensation comes from distributions. The actual partner/operators see a paycheck every period.
- Risk Tolerance. If you follow my work, you know I advocate bold action in today’s market to ensure people notice your brands. As with trust and vision, partners must have a common appetite for risk and change.
Outsiders Help
Often I serve as a voice of outside reason with partners out of alignment, or groups that simply want to validate they are on the right track and would benefit from an experienced outsider’s view.
I worked with three partners who owned eight restaurants, and they were experiencing uncomfortable trouble in relying on each other. I showed them how—even though each had a different perspective—I could connect them to the same desired outcome. I worked with them on accepting each other’s behavior and honoring each other’s contributions.
And through one initiative, we added millions of dollars of profit to their business, which they eventually sold for a great price.
I also recently I worked with three partners who bought a business together, creating a specific documented plan on how each person would have responsibility and accountability and compensation in their new venture. Moving through this process included ups and downs, but we crossed the finish line—and prevented a complete cluster%^$%.
Periodic Maintenance
Partnerships can be either the greatest synergy ever created or an aggravating nuisance that ends in divorce.
A partnership does not come with a dashboard warning light telling you it’s time to take it in for service.
So, whether you want to refine a current partnership, are contemplating a partnership, or are thinking about leaving a partnership, imagine that light is beaming, and take preventive action.
