How to Avoid the Pitfalls of Partnership
You don't want to grow your business but lose a friend
A good collaboration pushes the boundaries of both partners.
-- Neil Blumenthal, founder of Warby Parker
The idea of partnership with a friend and business colleague — someone you’ve never done business with and very much want to keep as a friend — can feel daunting.
Think of the things that can go wrong: monetary loss, potential friendship loss, even your original business loss. However, I recently dove in anyway, and I'm not only 100 percent comfortable with this new alliance; I'm thrilled.
Here's a look at why.
Katie Wafer and I met through the Cherry Creek Chamber of Commerce and quickly became friends and then equally quickly realized how cohesive our businesses are. And Katie is impressive. She has a positive spirit, she has a successful, growing business. I knew, instinctively, that we would do something business-wise in our futures.
For 13 years, I've owned a small business, and while I love it all even more today than I did when we first launched, it is not without its challenges. At the end of the day, being an owner means the financial success of that business falls solely on your shoulders, and that can sometimes be a lonely place to be.
I realized as Katie and I continued sharing ideas and respective challenges about our individual businesses that our passion for the industry and our management styles matched and synced with ease. We share ideas, bounce hard decisions off of one another for a second opinion and push one another. It is exciting, and it's fun.
There are always questions and scenarios you have to run through in your mind when considering a partnership. Katie and I have both experienced collaborations and partnerships in the past that didn't end up working out; however, neither of us would ever let previous so-called "failures" make us jaded or stop us from moving forward. Those experiences make you smarter and more aware about how to change things or design them in a better way the next time.
Katie and I had many discussions together about the vision for our partnership and what it might look like. We discussed everything: employees, marketing ideas, standard operating procedures, how to handle money and what we thought our strengths and weaknesses were. Furthermore, the Katie-Amy partnership today means having someone equally invested in the outcome of the success of the enterprise.
For me, it's all one giant learning experience, and I think it is comforting to have discussed everything, laid it all out on the table and have it done. Having these conversations ahead of time should be exciting and a priority for both partners. If someone is hesitant, that's your first red flag that it might not be a good fit.
Since we had some experiences that didn't work out in both our respective business pasts, we talked through what went wrong and what we think could have been done differently. We then both discussed everything separately with our respective families and close friends, and I ran it by my mentors.
Everyone thought it was a brilliant idea, but they offered the standard warnings for any partnership: What's the exit plan look like? What if someone wants out? What does transfer of ownership look like? Who's responsible for what?
It's also important to have a strong team around you. Accountants keep an eye on and do all of the bean counting. Lawyers walk you through and prepare your operating agreement.
. Also, at this stage in my career, I am not locked into any certain outcome. I am good at changing and adapting when and where needed. The company is growing, and we are enjoying being in the moment and serving our employees and clients. The future is very bright.
Amy Dickerson and Katie Wafer