So you want to work with a partner?

arrangements are one of the most common forms of business and some
of them work just fine. Many don’t. In the beginning, everyone
involved is excited about the venture, so issues seldom come up and
no one wants to talk about the worst case scenarios. They are like
newlyweds that are blinded by hopes and dreams of how great
everything is going to be. Just like marriage, business
partnerships come with much emotional and legal considerations that
need to be addressed in the beginning, and it’s more than simply
who owns what. No one wants to talk about worst case scenarios in
the beginning (like bringing up the subject of a prenuptial to your
fiance), and it’s hard to anticipate all of the problems that can
occur in a partnership from the beginning. But there are common
problems that exist across business partnerships that you can
account for, such as an imbalance in the amount of work that each
partner is contributing, disagreements about the overall vision and
direction, and what happens if a partner simply loses enthusiasm
and want to go do something else. Partnerships can be hazardous to
a business’s health. In a 50-50 partnership, the partners are
obligated to buy the other one out if things aren’t working, and if
you haven’t worked this out in advance, it can create some serious
challenges and could cost you a boat load in legal fees. The key is
to protect yourself before you get into the situation you’re
currently in.

  1. If you can do your business
    without a partner (even if it takes longer), I highly recommend you
    do. There are always people that you can hire to perform specific
    functions as you need them to supplement your
  2. Do research on the person before
    you enter into a partnership agreement, and know the type of person
    you are dealing with. It’s specifically important to interview
    people that have worked for this person in the past so you gain an
    understanding of what they are like in business.
  3. If at all possible, take the majority interest and don’t
    go in 50/50.
  4. Make sure you put in a buy/sell
    arrangement into the initial partnership agreement or corporate
  5. If you suspect that your
    partnership is about to go south, deal with it swiftly and with
    good communication. (Refer to the book Crucial Conversations: Tools
    for talking when the stakes are high by Kerry Patterson and Joseph
  6. Get a good lawyer.
  7. Think about the future, and don’t dwell on the past.
    Letting it go is difficult, but shoulda coulda wouldas are harmful
    to your future. You can’t change it, so move on.

Ed Stillman is a
Vistage Chair in Austin, Tex., working with business owners and
CEOs who are growing their profitability greater than their
competition. He can be reached at

Published by edstillman

I grew up in Carlsbad, north San Diego County, lost my dad as a teenager, went into the USAF for four years and hired on with 3M in 1969. Received my AA from Santa Barbara City College, BA and Masters from Redlands University and after 33 plus years, I retired from 3M in 2002. As I look back on my life, I have been creating myself and developing my skill sets to be a business coach and a Vistage Chair. I am president of SEOT, a "personal improvement" consulting firm spending most of my time working with Central Texas executives running small to medium size for-profit companies who are focusing on improving their profitability greater than their competition. My area of interest is assisting senior executives in creating a better balance between business commitments and personal relationships. I also facilatate three leadership labs each consisting of a dozen owners, presidents and CEOs. We meet monthly both in a group setting as well as in a 1-to-1 coaching session. Our focus is to sharpen each others' skills in becoming better leaders, making better decisions and taking ourselves and companies to that next level. Who are we? My members are experienced top executives who recognize that they don’t have all the answers and who actively seek the company of successful peers—both to give and receive insights and ideas. My members mine the 200 plus years of chief executive experience that comes together in our monthly meetings and members are eager to offer their own experience and insights in the process. As a group, we spend our time exploring topics members can't discuss anywhere else. My members have many other places where they can engage in idle, "cocktail party" chatter. Our mission is to provide the setting for discussing the "undiscussable." Where or who can you go to for confidential, honest feedback to assist you in minimizing your personal "Worry List"?

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