The birth of a business is much like the birth of a child. Sometimes there is a great deal of planning and sacrifice, sometimes there isn’t. Conception of either entity can occur either within or outside the confines of a partnership. Both the child and the business are given a great deal of attention, especially during the first few years of growth. The partnership may last for the life of the child (or the business), and it may not. If we were to take an honest look at the core reasons for the demise of relationships, both in business and familial scenarios, we would find that most of the time the split was due to personality conflicts. Now, for the purposes of this series of articles we would not presume to dictate methods of choosing a person to have a child with, however we can offer some guidelines on choosing a business partner. In this and the next article we will provide a list of partner ‘types‘ that start up business owners will want to avoid. See if you can pick out the ones you have had experience with – hopefully from a distance.
The Crisis Magnet
We have all known a Crisis Magnet. Somehow bad luck just seems to follow them around. The day of the finance meeting with the bank happens to be the same day their spouse is having dental surgery. They can’t go and meet a new client because their car is in the shop. They need to take more money out of the company because they can’t pay their legal bills. Avoiding the Crisis Magnet is easily done through word of mouth. ask mutual acquaintances about the party in question. Have an honest conversation with the candidate about their life, priorities and work ethic. If they are in fact a Crisis Magnet, the signs will pop up. Remember, it is not in the standard partnership contract to provide babysitting or therapy services to each other.
The Absentee
The Absentee may be the single most frustrating type of business partner there is. They never show up to anything. There are never any signs of them performing tasks for the betterment of the business. In fact, all they do is collect their share of the profits. The best way to avoid the Absentee is through the operating agreement. Have clear guidelines on vacation time such as how much per annum, how often, and when vacation should be taken – as in not during a busy season. Depending on what kind of business you have, it may be helpful to set concrete times to collaborate, exchange information etc.
The Big Wig
The Big Wig shows up at every meeting, cocktail reception, conference and tradeshow with a pocketful of gold embossed business cards proclaiming their title of CEO or Director. Within three minutes of being in a room everyone knows their title and status as the CEO of their own company – even if the assets of the business add up to less than a single one of those ridiculous business cards. The Big Wig expects special treatment, loves anything flashy and expensive but never ever does any work unless it will get them the teeniest bit of fame. Successful businesses are built on much more than titles, in fact having a title pins one down to one set of responsibilities. Avoid those who appear big headed and selfish. Make sure they can walk the walk as well as talk the talk.
The Big Spender
The Big Spender is closely related to the Big Wig, but frighteningly irresponsible in the finance department. They cannot seem to do their job without the best office equipment, the latest technological gadgets and the biggest paycheck. Client meetings are lavish affairs in expensive restaurants with $100 bottles of champagne. They like to say things like “you can’t make money without spending money” or “they are in the palm of my hand! Their contract will pay for it all!”. In the meantime you need to keep the company afloat while the Big Spender spends all the cash. When you are choosing a partner you will want to match your style of fiscal responsibility with theirs. Someone who is used to living a luxurious lifestyle may not be willing to compromise in a business situation. Financially conservative should be their middle name.
In part two of this series we will continue with our look at types of business partners to avoid. We will cover such personalities as the Dreamer, the Know-It-All and the Employee. Stay tuned!
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