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Business Partners ... Who needs them?

Frankjxx

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Sep 28, 2007
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Having had several business(s) and usually flying solo, My question is what has been your experience with having partners in business(s) or real estate deals?

Being a (s) type person and wanting to do everything in the past I have a new motto =

Deligate or stagnate! My mentor always advised me to stay away from partners and if I had to have them make sure they were silent partners. Team players were OK as long as you were in control. Today as I see more & more opportunity I'm thinking the only way to grow will be to have partners. Just wanted to throw this out there and see others experiences????



Thanks

Frank J
 

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MJ DeMarco

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Frank,

Speed++ because this is a great topic.

My experience with partners is to AVOID them at all costs, unless they are silent and investor only.

My first partnership experience was a horrific experience. I did all the work and the partners had all the excuses "My baby is sick", "I'm working overtime at my regular job" blah blah .... in my experience, the partners became an obstruction to my success whereas they should have added a synergy.

Conversely, if your partner is money only, it could open up some opportunities that weren't available.

The answer obviously is highly dependent on the partner agreement and what each partner brings to the table.
 

reipro

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I agree this is a tough topic. You need to decide what that person brings to the table. If you do not have synergy and the sum ads up to more than 2 you are better off alone. We have had partners that we have done spefic deals with it was a one time deal and then we both had the choice to do another or pass.
 

Russ H

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Les Gee has a great story about this.

He started the REST (retire early success training) workshops to teach folks what he'd learned about playing cashflow, and how to apply it to the real world.

Thing is, he also tried different modes of play: Team Players, the "Lone Wolf", the "Saver", etc.

What he found-- to his surprise-- was that team players completely BLEW AWAY everyone else in getting out of the rat race.

All the time.

Les had been a lone wolf for years. But based on this, he started to look at partners.

Now that's practically all he does.

And his financials have grown exponentially as a result.

Here's the best insight I can pass on:

Play cashflow with lots of people. You will eventually find players who you really get along with and have a playing style that is complimentary to yours (it is absolutely *amazing* how much you can learn about someone by playing cashflow with them a few times).

If I were looking for partners, I'd proabably have an active Cashflow group that played every week or so. And I'd choose my partners from that group.

-Russ H.
 

Rawr

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I think Mark Cuban is the only guy I know who has actually admitted that his biz benefited from having a partner (his very first one, since he was all go go go and his partner took care of details)

Everyone else tells horror stories!
 

Peter2

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If having a partner was good, God would have one. :smx3:
 

yveskleinsky

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lol! ...The quality of partner you have is based on the quality of person you partner with. I have had several partnerships that didn't work out- and all for obvious reasons. WildAmbitions and I have partnered up with the cabin rentals/ownership and what a breath of fresh air! She has the exact opposite skills I do, (detail oriented, loves tax strategy and is awesome with technology) and the common thread is real estate and a love of cabins and vacationers. Perfect pair!

My last partner was an alcoholic and was super lazy.

My partner before that was quite possibly mentally ill, verbally abusive, controlling and as it turns out had a nasty coke (and nasty girl) habit. You can see why that didn't work out. lol.

My mistakes in the past with partnering with people has been because I thought that I could somehow overcompensate for their shortcomings. Nope. No matter how good your idea or project is, if you are partnered up with a person you don't trust you won't get far. In addition, you can partner with an awesome person but if their ideas of running a business are different than yours that won't work either. A partner should be someone you can run a two-legged race with, not someone who wants to be dragged (or carried)across the finish line!
 

Russ H

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Peter2 said:
If having a partner was good, God would have one.
Diane Kennedy said:
Who says she doesn't?

Peter2, want to bet that Russ deletes both our posts?
Actually, Diane, my response was going to be that God does have partners.

Lots of 'em

-Russ H.
 

Russ H

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Ethereal partnerships aside, I think partners are good for some people and bad for others.

Marriage is a good example.

Not everyone wants a spouse. This is not a good, or a bad, thing.

It just is.

Sharon and I look on our marriage-- and our business dealings-- very much as a partnership. We each bring something to the party- and we compliment each other in lots of ways.

Some of our friends have said, "OMG, you two are exactly alike!"

And others just laugh at how different we are.

Funny thing is, they're both right.

That's what makes us good partners.

Hard thing about any partnership is making sure the partners can change in the same direction-- or at least be OK with one partner who changes when the other does not.

Too many partnerships are based on infatuation-- seeing something in someone that is not really accurate. Your heart sees a romanticized version of the person.

Once the infatuation wears off, you see them as they really are.

THAT is often when the doo-doo hits the fan.

My experience: With any partnership, live together before you get married.

Share an office for at least a year with a potential business partner before you are actually real partners. Do your business, and have them do theirs. Share, and grow.

But don't sign or commit to anything as partners.

This has saved my butt so many times, it's not funny.

Both in business, and in love.

-Russ H.
 

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Jason_MI

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Jul 25, 2007
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I've never done well with partner(s). Everything always ended up being this big committee-group-think followed by the miring of fears. It has never worked.

On the other hand, I have a large number of RE 'partners', if that's what you want to call them....perhaps contacts is a better word. People I can call and say "Rob, I have a 4/2 that needs work for 30K....are you interested?" Yes or no. Have coffee, look at the house sign the papers or not, and we're done until next time. That works.
 

lucas

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Oct 7, 2007
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I think the critical issue is that if you have more than one person trying to work together, at least one person in the group needs to have leadership ability and the willingness to use it.

Without proper leadership, a group effort is destined to have problems. If you aren't a leader yourself, you either need to partner with a leader and take direction from him/her, or work by yourself, or do something to increase your leadership ability.
 
T

TheGreatBear

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There is something called a Pig's Payoff. I don't remember the details, but supposedly, in a hierarchy, there are some people who will do most of the work, and some that will do no work and "piggyback" on the work of others. Since if no one does any work, no one benefits, the big pig(supposedly more capable) will do more work due to his conscience or capabilities etc. But the small pigs get to piggyback, if it works they laugh, congratulate and split the spoils. If it fails, they clamour for change and shift the responsibility. Though that is more of a bureaucracy than a business :).
 

jimculler

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Sep 14, 2007
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Great thread.

I will never partner with anyone again. A while back I had a partnership that didnt work out. I did it because he had the cash and credit, and I had knowledge, experience, and drive.

Unfortunately we never discussed the fact that he wouldnt want to do any work associated with the business, and I never really screened his work ethic.
 

SteveO

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But the small pigs get to piggyback, if it works they laugh, congratulate and split the spoils. If it fails, they clamour for change and shift the responsibility.
Unfortuantely, I have seen this before. As a result, I pick my partners very carefully and evaluate what they bring to the table under a microscope. They must be driven and have proven results.

Jason's observation is more along the lines of an investor which usually has borders that are better defined.
 

AroundTheWorld

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bump for the power of the partner.

We just started a new one this week..... a marriage made in business heaven. ;)

We are building off each other's strengths. Our strength in knowledge. His strength in internet/web stuff. Together, we are creating something that is much greater then the sum of the parts.
 

GoldenEggs

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Sep 4, 2007
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Thanks for bumping this thread!!

I was talking about this subject with a friend of mine last night. We were on resident hall student government together for 4 years in college and for only 1 year, did we have an incredible group. Everything flowed like honey and we created so many programs. I was able to have professors volunteer their time to provide extra tutoring to the students on a weekly basis and we co-hosted a Pacfic Coast regional conference to encourage and foster student leadership from over 40 colleges and universities. And even though we did not agree 100% on everything, we still supported one another's efforts and worked to find common ground. It was the most synergistic working relationship I have ever experienced. It was beautiful.

Unforunately, I have not been able to recreate the experience.
 

SoBayJim

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Mar 31, 2008
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I'm all for partners when they compliment each other. I'm current engaged with three business partners in a new venture. We each bring unique talents, backgrounds and perspective to the table. I focus on the finance and business structure issues, we have a person devoted to development of new relationships and product delivery, the core of the company is our creative talent and the last has an operational focus to keep us all working toward common goals by managing the deadlines and tasks.

For us it seems to be working, I'll tell you more when we sign our first contract and put the money in the bank.
 

fanocks2003

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Mar 31, 2008
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Having had several business(s) and usually flying solo, My question is what has been your experience with having partners in business(s) or real estate deals?

Being a (s) type person and wanting to do everything in the past I have a new motto =

Deligate or stagnate! My mentor always advised me to stay away from partners and if I had to have them make sure they were silent partners. Team players were OK as long as you were in control. Today as I see more & more opportunity I'm thinking the only way to grow will be to have partners. Just wanted to throw this out there and see others experiences????



Thanks

Frank J
Outsource tasks to companies who is experts in their field. In financial matters I would rather stick with lenders if possible (banks or private lenders). That way I am in control.

If I where forced to take a financial partner with owner interest, then he would preferably be a silent one and with a smaller equity stake. I would occupy the Chairman position (in order not to lose control of the company).
 

Dejan M

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Mar 9, 2008
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Here´s a good article: How to pick the right business partner http://www.davidalison.com/2008/04/startup-101-how-to-pick-right-business.html

This isn´t easy. If you find the right partners you are definitely at least 100% better off than without them. But you must be careful what to look for - check the above article.

Of course ... you can make a million dollars alone. But if there are two partners that does not mean that each gets 500.000. More likely is that there will be 3, 4 or even 5 million to split. A good partner can be the best asset you can have.
 

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kimberland

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Jul 25, 2007
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I haven't had a lot of luck with partners,
either the partners didn't work out
or the projects didn't work out.

One thing I've learned is to set expectations
and to figure out AT THE START
what to do if a partner wants out.

I also think that partners should be responsible
for their own sections of the business building universe.
For example:
With blogging, one person is responsible for content,
the other for tech support and marketing.

There's no share-share,
there is a clear leader for each task.
 

AroundTheWorld

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There's no share-share,
there is a clear leader for each task.
Agreed!! For a few different reasons.

1) share-share leads to an administrative AND accountability nightmare. This is how things fall through the cracks. "I thought you were going to do that." "oh, I thought you did it."

2) you are missing out of the opportunity for true synergy. If I am doing task 'a' and you are equally capable of doing task 'a' then why are you my partner? How are we complimenting each other? How are we leveraging the partnership? We aren't.

Which makes more sense?

A graphic designer partnering with a graphic designer?
or
A graphic designer partnering with a marketing specialist?

Which partnership will make waves?
 

kurtyordy

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Aug 28, 2007
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I haven't had a lot of luck with partners,
either the partners didn't work out
or the projects didn't work out.

One thing I've learned is to set expectations
and to figure out AT THE START
what to do if a partner wants out.

I also think that partners should be responsible
for their own sections of the business building universe.
For example:
With blogging, one person is responsible for content,
the other for tech support and marketing.
Also needs addressed before you start is what happens if marketing guy is not performing, what is content guys recourse besides:bgh:. Because trust me from experience, that only is satisfying for so long.
 

fanocks2003

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Mar 31, 2008
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Agreed!! For a few different reasons.

1) share-share leads to an administrative AND accountability nightmare. This is how things fall through the cracks. "I thought you were going to do that." "oh, I thought you did it."

2) you are missing out of the opportunity for true synergy. If I am doing task 'a' and you are equally capable of doing task 'a' then why are you my partner? How are we complimenting each other? How are we leveraging the partnership? We aren't.

Which makes more sense?

A graphic designer partnering with a graphic designer?
or
A graphic designer partnering with a marketing specialist?

Which partnership will make waves?
Agree as well. Different parts coming together is good. Different responsible parts coming together is golden. There is basicly 5 parts in a business that needs to be covered: Finance, Communication (marketing/sales/customer service), Project management, Legal and Product/service development (product design, product import/export, product FAQ's etc).

So you basicly need 5 partners or 5 very good managers at each position to build a great company. Code of Honor is the keyword here. Not only do the different managers have to do their tasks and do them good (and with a high degree of responsibility). They also need to function as a team.

Building a team is always the responsibility of the project manager (I usually title the PM as COO, Chief Operating Officer. The COO always takes over the CEO position from me when the company is ready for it and I will step up to Chairman position).
 

Ready2bfamous

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I think in business, some may need partners while others may not. If you are doing the partnerships. You should have clear expectations and boundaries. Or it won't be a good thing for either partner.
 

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