I guess by now you know my true feelings about partnerships, but you may have other ideas …
… after all, your intended partner may be the Yin to your Yang … she may be the finance whiz while you run rings around operations … or he may just be your buddy since you shared a dorm together.
All I can say is: I hope that whatever your partner brings to the table, that they are also bringing The Big Idea.
You see, if you are the one with The Big Idea and you choose to share it with a partner because you [insert too scared to go it alone reason of choice: need more capital; need finance/operations/marketing skills; need somebody with a level head; need somebody to burn the midnight oil with; need somebody to hold hands with; etc.; etc.], then you are effectively paying your partner $5 million for the privilege!
By now you’re thinking that I’ve gone entirely off my rocker, so let me explain:
Well, The Big Idea of course!
You’ve had this great idea and you will build a business around it and you will sell it for $10,000,000 in 10 years and …
You forgot that you invited a partner to join you … and when you sell, they are going to get half: $5,000,000.
That’s $500k a year for 10 years PLUS whatever salary that they took for those 10 years PLUS whatever perks that they got (e.g. trips, cars, laptops, phones, etc., etc.) PLUS 50% of any profits.
And, now you’re only half-way towards your Number!
Was your partnership worth it? Or, could you have hired people when you needed them for far less cost? I’m venturing that the answer is ‘yes’.
Another way to look at it is: will I be able to sell my business in 10 years for $20 million, so that my half still gets me to my $10 million 10 years Number? Or $30 million, if I decide to have 2 partners 😉
So, the question that you need to ask before considering going into business with somebody else is: am I more likely to get to my Number with or without this person?
And, I’m guessing that unless you’re a total doofus who just happens to have The Big Idea and not much else going for them, the answer will be “NO, I can get to 100% of my goal without this person, MUCH easier than getting to 200% of that same goal with them”.
So, what if you don’t have The Big Idea, but the guy who happens to have it asks you to go into business with him?
That, my friend, also depends on whether you are more likely to get to your Number with or without this person … and, their Big Idea?!