To partner or not to partner. That is the question ... and it can mean a variety of different things. If you are an individual proprietor, at some point you may decide to find a partner to share some of your workload with, as well as to bring new business to the table. In many ways, this is a great idea. When you add another mind to the mix, you will typically be given new ideas, have someone to bounce your own ideas off of, receive help with paperwork and phone calls, and have backup when you are sick or out of town. These are all very positive aspects of having a business partner.

 

Plan ahead

The idea of taking on a partner, however, should not be taken lightly - nor should you rush into such an arrangement. Partnerships take a great deal of planning, and it's extremely important that you know your potential partner very well.

It's also imperative that you base the partnership on more than just liking the person. I suggest making a simple, but detailed, pros and cons list prior to entering into any type of partnership agreement. There should be 20 pros and 20 cons. Even if you can't easily think of 20 solid cons, forcing your brain to go in the direction of "how might this partnership be negative?" might surprise you.

The first few pros and cons are usually fairly obvious. When you get closer to number 20, the task will be more difficult.

While the items further down on your list may seem almost irrelevant, they might shed light on something you would have otherwise neglected to consider. The list can also help in the future, once you are well into the partnership. Looking back at it might help you remember why you decided to work with her, or him, in the first place. Just don't leave it out where they could ever find it!

 

Knowledge is power

While the list is a good foundation for your decision, you should know your potential partner for more than a few days or weeks before going down this path. The only good exception to this rule is if someone you know and trust has made the recommendation. And don't forget: You need to turn the microscope on yourself as well. Just because your potential partner has passed every test, that doesn't mean you are ready to work with another person. Does the idea of having someone else to be accountable to terrify you or empower you? Do you enjoy meetings to discuss your business? Do you prefer to be alone, or do you thrive on brainstorming and networking? If you just need someone to do the extra work you cannot do, it might be best to hire an hourly employee.

 

Ask questions

So, back to the question ... to partner or not to partner. When you're on your own, this may mean more than simply partnering with one other person. Instead, you might be looking at the prospect of going to work for an established firm or agency. This arrangement can also be a very positive one, but should receive your careful consideration before taking a plunge.

Quite often, when you are working for an agency or firm, compensation will be commissions based on your sales. There are many variations on this. You might start with a draw, which is where you are given a weekly or monthly salary, which will need to be paid back. As soon as you begin earning actual commissions, the firm or agency will draw from those commissions to retrieve any monies they have paid to you. This can work very well, if you are successful at selling and generating your own commissions, but it can just as easily backfire.

Always be cautious and know exactly what the terms of your compensation are prior to entering into any kind of agreement. Whether you are being offered a draw, a base salary plus commission, or straight commission, know the details inside and out. Is there a cap on the commissions you can earn? What happens to your business if you leave the agency? What about the clients you had before you started at the agency? Your best bet is to have an attorney look at the contract prior to signing.

Having a partner or working for an agency or firm can bring new life to your business. This is often a very positive and rewarding experience. Just be sure to always exercise caution. Not everyone has your best interest in mind, so make sure you're diligent that you do.

 

Reach Carst at amycarst@hotmail.com.

Register or login for access to this item and much more

All Employee Benefit Adviser content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access