Partnerships help small business think bigger
To succeed in business, you just have to be brilliant at one thing. In many cases it’s a skill, such as art, coding, engineering or hairstyling. But that one brilliant attribute can also be a personality trait or a business process, such as product development, selling, customer engagement, or leading people.
No business will be successful unless it is at least adequate, and preferably superb, in all these other categories — not to mention finance, planning, marketing and recruiting. But I see too many entrepreneurs trying to do all these things themselves, when they should be doubling down on what they’re best at and leveraging the rest.
In my perfect vision of entrepreneurial Canada, half of all businesses would disappear. They wouldn’t fail; they would just merge with similarly minded companies to gain the critical mass to get better, fast, at all the tasks they’re ignoring or undervaluing.
Suddenly, a creative carpenter would team up with another contractor who has better selling skills. Now the carpenter can spend more time doing her best work, while her partner worries about next month’s contracts. A struggling tech startup might ally itself with a business-services company that has many clients with technological needs but doesn’t know how to write code.
Great products don’t sell themselves. Producers need distributors, marketers need products they can believe in, operations experts need innovators or networkers. And, of course, visionary entrepreneurs need people who can keep them focused.
Business schools, incubators and business-training programs should shift their focus from turning out individual entrepreneurs to creating entrepreneurial teams. It’s a new mindset. Instead of obsessing about what me-too product to supply, entrepreneurs could make their first priority finding complementary and compatible partners. In twos, threes and fours, these entrepreneurial teams would then pool their skills and experience to devise winning product-service hybrids.
One partner might see the opportunity to create a new product, another might know a better way to distribute it and a third might provide the logistics expertise or industry connections to get the business producing revenues in half the time. Business started by teams tend to have more unique product offerings and the ability to execute faster.
All this additional horsepower is still no guarantee the company will succeed. But partnerships will help companies succeed or fail faster — both useful outcomes. Many companies started by individual entrepreneurs plod along, never quite failing but never getting better, either. Partners are less likely to tolerate business limbo and will be quicker to try to fix things, and less wedded to the concept if it doesn’t prove out. At that point, the partners are free to try something different, or seek other opportunities with new partners. But they will likely have spent less time and money than if they had been struggling alone and they’ll be smarter contributors to their next team.
Of course, building a productive partnership takes effort. First, you have to rigorously examine and understand your unique skills and needs. What kind of work do you most want to do? What other qualifications do you bring to a team? You also have to be able to admit your weaknesses. Maybe you know nothing about manufacturing, or you couldn’t organize a shelf of DVDs. Knowing yourself thoroughly is the first step to finding the right partners.
Put potential partners through the same scrutiny you applied to yourself. What are their unique abilities? What are their secondary contributions? How open, honest and accountable do you think they’ll be? Get to know them at work, at school, at leisure, with family — in multiple situations that allow you to make an intelligent assessment of their abilities and character.
Before any partners have invested significant time or money, you need a partnership agreement that sets out expectations and responsibilities. Each partner should have independent legal advice before signing. Decide who will do what, how these inputs will be measured, who has the right to make what decisions, how profits and losses will be shared, and what happens when partners disagree. The time to agree on these things is while you are still friends.
Even if you’re not looking for leverage now, think about what a partner might do for you. What holes plugged, what opportunities opened? Partners could be consultants, troubleshooters, part-timers, or even friends. Rugged individualism has its limits. What could you accomplish if you could spend more time doing what you do best?