Pick the right business partner for your own success

This week, we will continue our discussion on how some employers may contribute to high levels of unemployment in Botswana. Setting up any business is costly and so can easily run into hundreds of thousands of Pula – money needs to be spent on buildings, water and power connections, computers, vehicles… The list is endless. And that’s before the business makes any money! And even when the business is up and running, day- to- day costs, such as wages, water, power and telephone bills, fuel, and rent have to be met. So, for these reasons, many aspiring entrepreneurs might not have the financial resources at their disposal to cover such costs. Hence, they may decide to enter into a partnership with another person so that they can share the workload and costs and so make the business viable.

Also, each partner can specialise, or focus their time and effort, on one aspect of the business. For example, on a farm one partner can raise broiler chickens whilst the other can keep the records and accounts and market the birds. This means that the workload for each partner is lighter if it is shared between them as in the Setswana proverb: Kgetse ya tsie e kgonwa ke go tshwaraganelwa. Running a business on one’s own is hard work, just like harvesting a bag of honey alone from a hive in a tree where one has to be very careful lest one gets stung by the bees, but sharing the burden makes it so much easier!

However, in Botswana partnerships often fail even if the business is doing well. For example, disagreements may occur between the partners over even trivial matters. Also, for a successful partnership to thrive, the partners must learn to compromise. Put simply, they must learn to reduce their demands or change their opinion concerning matters relating to their business. For example, one partner may wish to increase the selling price of chickens by P10, but the other partner does not wish to increase the price because she feels that doing so might make their chickens now too expensive for consumers to buy. But if they are willing to compromise they could perhaps agree on a price increase of P5 per bird. But if each partner wishes to dominate, or outdo, the other, then they may be too proud to compromise and therefore they may not come to any agreement. Each partner wants to dictate to the other the way forward. There will now be an impasse and, if not resolved, the partnership may break up. Partners may also be jealous of each other not wanting the other to benefit more from the partnership. And many Batswana have admitted to me that this is, sadly, too often true. I am reminded of the Setswana proverb: Poo tse pedi mo sakeng… Putting this into context, partners in a business may be likened to two bulls in a kraal where each one will want to dominate the other thus causing strife and conflict. Now to resolve such a problem, each partner should communicate in a constructive way concerning matters in which they may have differing opinions. They also have to be good listeners – let each have his say as in the Setswana proverb: Mmualabe a bua la gagwe… And finally, there has to be mutual trust between the partners. Each partner has to trust that the other partner is doing his job properly and is not likely to steal, cheat or lie. In other words, each partner must be honest with the other. I know a good friend who is a partner with a local lady in a business in Botswana. Initially, there was trust between them but after a time he suspected a problem with the keeping of the company’s accounts. And his suspicion was well founded. He found out over a period of several months that the records of income received and the amount deposited into the company’s bank account did not match up. So, he came to the conclusion that the lady was depositing some of the money into her own personal bank account. But that was not all! After setting up the business, my friend used to give another business partner P1 000 a month to pay the company’s water bills. However, he found out later that the bills were never paid. And he also once gave the same person money to pay for some machinery for the company, but that person used the cash to build a home in her village. In the late 1990s, a close family friend and fellow church member approached me about starting up a publishing business. At the time, I was a teacher and also a freelance author who had written travel articles and contributed to some secondary school textbooks. We then became partners and agreed to publish a magazine called New Era which would focus mainly on political, social and environmental issues in southern Africa. My partner, who was a smooth talker, then asked me to contribute money to the business so as to publish the first issue of the magazine. He then promised to refund me the money from the income received from the sales of the first few issues. I agreed, and contributed some P100 000 from my savings and the first issue was published. So far, so good. But things did not pan out as I had expected. My partner decided to rent office space for the company right from the start of operations. But with little money in the bank, I questioned him about this since I knew that his house had two spare rooms which could easily be converted into offices. And in so doing, we would not have to pay rent thus saving the business thousands of Pula each month! But he gave me no answer and I was now becoming very uneasy about the direction in which the company was going.

My partner also hired a number of people without consulting me. And I felt that they did not have enough experience to carry out their duties effectively and efficiently. We then published the second issue of the magazine, and although the magazine was selling, my partner never told me exactly how much money we were making. I then asked him to pay me back the money owed to me. He agreed and gave me a cheque which bounced. Meanwhile, hundreds of copies of the third issue were stacked up on the floor of a warehouse in Francistown. We were then told that the copies would not be released until they were paid for. But, to my surprise, there was no money! So, the magazines gathered dust and were never sold. And a current affairs magazine quickly becomes out of date and so cannot be sold, even after a short time. So, that was the end of the magazine! My partner then moved down to Pretoria for some six months in order to ‘ raise money’ but whilst there he only paid one month’s rent to the landlord who also complained to me that some items were missing from the house. And to make matters worse, one of our employees decided, with the help of a teller in a local bank, to defraud me of P22 000! My partner then moved to Zambia in the search for more money. The last time that I saw him was in 2004, and since then I have never heard from him. And, of course, my long- promised cheque has never materialised. This was a bitter experience for me! But I had learnt something about human character in the school of hard knocks! Before entering into a partnership, partners should first sign a Deed of Partnership – that was something that we never did. This is a legal document which should be drawn up by a lawyer and then signed by all the partners. The document should give details such as the amount of money to be invested by each partner, the role of each partner in the business, and how the partnership can be ended or new partners introduced. Also, having a person you know well as a partner does not necessarily guarantee success for the business! As I found out too late, the opposite might, sadly, be true. The problem here is that we can so easily trust a person if that person is a relative, or even a church member! And so, we may assume wrongly, to our great cost, that the person is honest and trustworthy. So, it pays to do your homework first before committing yourself to a business partnership!

And also look out for any red flags. If you go to the beach in Durban, South Africa, you may, on some days, notice a red flag flying there. The flag is used as a sign of danger and you will not be allowed to swim in the ocean for as long as the flag is flying; the reason given might be that man- hungry sharks have been seen close to shore looking for their next meal which could be you! Similarly, look out for warning signs that might be seen in the behaviour of your partner- to- be. For example, if he is a reckless, carefree spender and has many debts, then this might be a sign to you that if you partner with him the company’s records will be in shambles and losses might occur resulting in the folding up of the business and throwing the partners and their employees out of work. So, stop and do not proceed with forming a partnership with him!