Partnerships Can Work if You Work at Them

If you told 100 successful entrepreneurs you were starting a business and asked them if you should seek a partner, at least 90 would give an immediate no. That advice is sound. It is usually better to go solo, but not always. 

I have an equity partner of 20 years in one of my businesses and it pleases me to say our relationship has been excellent. Dean Neese and I were friends going into the restaurant business. The good news is we're still friends. 

Three years ago I was leaving by air charter for Des Moines to do a television commercial for our restaurant group. Dean and I also had an appointment with the local business magazine, which had asked for an interview the next time I was in town. While the pilot, producer, cameraman, and I were taking off—our instrument panel warned us our nose wheel had not fully retracted. After flying over the tower to let them take a look, they suggested we begin an emergency procedure to move the nose wheel manually. No luck. At the tower's request, we circled the airport for 10 minutes, our nose wheel stuck at 45 degrees. When the fire trucks were in position we made an emergency landing. 

Our fears were correct. No nose wheel. We skidded to a safe stop and ran like hell for fear of fire. It turned out well, however. We jumped on another plane and maintained our schedule. 

A couple of hours later, during our interview with the magazine, Dean told the reporter that she was talking to us on the day our business partnership came closest to dissolving because of my crash landing. That's not the way to become a sole proprietor. The experience made it clear there are worse things than partnerships. 

One of the questions the reporter asked was, "How have you guys managed to remain not only partners, but friends, for more than 15 years?" Dean quipped "Distance." Indeed, our 280 mile separation has helped. But there are other ingredients, too. 

Our partnership has flourished for many reasons, including: 

1. Distance, as referred to above. We don't get in each other's way as often. 
2. Non-competing interests. We're each responsible for different areas of the business, and while we do collaborate, Dean is location and operations oriented and I'm responsible for finance, administration, and planning. We seldom overlap. 
3. Consistent success. We haven't had to deal with financial trauma, one of the foremost ways partnerships get into trouble. 
4. Separation of finances and management. After almost 10 years of examining and researching franchising as a business concept, I acquired operating rights for a new Mexican fast food chain, Taco John's. I chose to operate the outlets in Des Moines, Iowa. Because I was 280 miles away in Sioux Falls, South Dakota, and for financial reasons, I invited Dean to be my partner. Dean had lived in the Des Moines area all his life and knew the city well.
   Importantly, I wasn't seeking management assistance from my partner. One of the most frequent reasons for partnership distress occurs when someone becomes a partner for both financial and management reasons. Seldom does the same person fill both of these needs effectively. Clear emphasis should be on one or the other. 
5. We share similar values. We both have well-defined ethical boundaries. We treat each other, and our associates, honestly and fairly. 
6. Neither of us has ever been an employee of the company. We've been able to avoid many of the conflicts created by salary disagreements, fringe packages, etc. 
7. Our plans are in writing. The preparation of an annual strategic plan has been critical to the success of our partnership. We have agreed on our priorities and deadlines, know what we intend to accomplish, and who is responsible. Executing from a plan relieves potential partnership pain. And when disagreements do arise, the strategic plan often holds the key to effective and friendly resolution. 
8. We deal with futuristic needs proactively. We are highly sensitive to discussing and resolving major issues before they hit crisis proportion. Fundamentally important areas like our cross-purchase agreement, funding in the case of disability or death, and succession planning are prime candidates for creating disagreement and are continually discussed. 

Partnerships can and do work. There are occasions when bringing in a partner can add considerable value to the entrepreneurial effort. Be cautious, however. A partner must be secured for the right reasons, or you'll be sorry. And notice I've used partner in singular form only. Rarely will a partnership of more than two survive intact.