Comments on: Scared of forming a partnership? You should be if you don’t follow this advice

By: Rob Pitingolo

Rob Pitingolo — Fri, 11 Jul 2008 01:58:34 +0000

Hi Pam! Awesome comparison of business partnerships to dating/marriage. It really got me thinking… statistically, something like 50% of marriages today will end in divorce, so maybe it is easy to understand why so many partnerships are disasters? Especially if these partnerships are more like people “rushing into marriage” than people going the traditional courtship route? Hopefully more people start thinking about business relationships in these frameworks. Great work!

By: Andy Pels

Andy Pels — Wed, 09 Jul 2008 14:40:41 +0000

I still want to stick it out as sole proprietor (once I even get that far), but great advice like this makes it easier to consider the possibility of carefully partnering up where it makes sense. By the way Red Road Construction is an awesome name.

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Hi Andy!

Yes, I was humbled by the success of the partnership after my initial reservations. When you have just the right mix of people, it can be a very good business situation. And an alternative is always forming a strong working partnership without the legal structure, where possible. This is often the best of both worlds in a service business, like my consulting work I did in the past.

As for the name, I am so glad you like it! The partners and my husband gave me the honors of coming up with the company name. I asked them all about their feelings about work, and what they ultimately wanted to contribute to the communities they worked in. Everyone came back with a strong sense of connection with family, and building infrastructure on the long-neglected reservations. Many elders are forced to bounce along on muddy and potholed roads on their way to Dr. appointments. And communities in general are fragmented by youth addicted to drugs like Meth and alcohol (who are often joined by parents and even grandparents, which is the ultimate horror).

The term “red road” has special significance in Native communities since it means “walking the good path,” living a clean life, in harmony with others and mother earth. This term is something elders can relate to, and speaks to the “end result” that my husband and his partners wanted to accomplish. The fact that the work they do is road grading and paving in Arizona gives a little play on words. They are, indeed, digging in red dirt to build roads.

And on a practical side, my husbands partners do not speak Navajo, so I didn’t want to come up with a term they could not pronounce. There isn’t a name much easier than “red road,” is there? Kind of has a Romper Room roll to the tongue.

You know that I am a branding nerd, so to hear you like the name means a lot! I am really happy with it.

Thanks!

-Pam

By: Alexandra Gibson

Alexandra Gibson — Tue, 08 Jul 2008 14:52:03 +0000

Great advice in this post. I also recently read Paul Hawken’s Growing A Business. In the book he gives really sage advice about the most important characteristic in a partner being unfaltering honesty. From personal experience, I can attest to this. I would take extreme honesty over intelligence any day.

By: Mitchell York

Mitchell York — Tue, 08 Jul 2008 00:33:18 +0000

Excellent advice as always Pam! My advice about partnerships is to realize at the outset that they will end. It’s nothing personal–it is just a fact that people and companies enter into partnerships to shore up a weakness or take advantage of an opportunity. They do it for properly selfish reasons. Eventually the partnership outlives its usefulness. So considering a partnership a marriage is the first mistake…it’s a rental. Thinking of it that way and acting accordingly will save a lot of litigation down the road.

By: Holly Hoffman

Holly Hoffman — Mon, 07 Jul 2008 23:27:08 +0000

I asked an associate to consider coming on as a partner in my start-up. Before solidifying the deal, though, we are both working through a set of questions from the E-Myth by Michael Gerber. There’s a chapter in which he discusses your primary aim, which encompasses not just your business, but your lifestyle as well. I recommend going through those questions with your potential partner first.

By: Nathan Bowers

Nathan Bowers — Mon, 07 Jul 2008 22:27:18 +0000

My accountant recommends: “With any partnership, whether business or marriage, assume you’ll get divorced and plan accordingly.”

What you’re looking for when forming a partnership is eliminating uncertainty. Lawyer will know pretty much everything that can go wrong and will help you cover the angles.

Example: What happens if your partner dies? Odds are you don’t want to all of a sudden be partners with their spouse, so you need a buy/sell agreement. What happens if the partnership is on good terms, but a party wants out for whatever reason? etc.

Partnerships get complicated. In The Bootstrappers’ Bible Seth Godin recommends avoiding partnerships because one person inevitably ends up pulling more weight. If at all possible, keep full ownership and work with people as needed on a work for hire or even barter basis.