Building Profitable Partnerships

To partner, or not to partner? This can be a provocative and wrenching question for coaches, inviting us to explore compatibility, competency and viability. As there are limits to growing a business as a solopreneur, partnership as a growth strategy is worth exploring. Leveraging collaborative partnerships can accelerate the desired results: financial strength, satisfaction, inspiration, impact. Of course the stories of partnerships gone wrong are all too common, with disagreements over money, the distribution of work, partners’ relationships with debt or the best path forward, to name a few conflicts. Ineffective partnerships can be a huge distraction to your work, wasting time, money and resources, and perhaps tarnishing the reputations of the partners and the business.

The Key Question

While it is tempting to start looking for potential partners, it is critical to first examine your relationship with your business in its current form. The key question to ask is, “How will entering a partnership elevate my business?” What does entering into a partnership get you? If you do not yet have an answer, it is premature to search for or respond to an overture from a prospective partner. Without clarity, how will you know if creating a partnership is the most effective strategy to achieve your business goals? What criteria will you use to evaluate a potential partnership? Armed with clarity, you can quickly determine whether a potential partnership is worth your time to pursue or if it is time to release it.

Exploring New Territory

In partnership, you and your partner form a new entity, separate from either one of you. Think of it in terms of geography: You are natives of separate countries, working to settle and thrive in a new, third country. While it’s tempting to dive into the details of the business arrangements, it is helpful to check alignment with your potential partner. Learning more about him or her personally is critical if your businesses and your future work are to be entwined. The Partnership Discussion Template, available here, helps you prepare for these exploratory discussions. You can offer the template to potential partners to accelerate and deepen the conversation. With clarity, both parties can assess the alignment, along with any gaps in expectations and needs. If there is sufficient common ground, exploration can progress to a deeper level.

Building Your Partnership

While aligned passion is a critical factor, it is not the only predictor for success. The Pillars of Partnership© system helps coaches assess how a specific partnership can build on solid principles to support profitable growth. From this level of specificity, you can discern which partnerships are aligned with your visions for business growth and release those that do not.

Four pillars form a strong foundation for an effective and satisfying partnership: Mission, Chemistry, Strengths and Gaps, and Operating Structure. To create the strongest alignment, explore the pillars in the following sequence:

Pillar I: Mission

What will you be committed to as partners?

The mission is the glue that holds partners together and anchors planning. The importance of this step cannot be overemphasized. Surprisingly, often this aspect of the partnership is glossed over or passed by entirely. Drill down to probe your visions of how this passion translates into a viable business model will look. Peel back the layers to ensure there is alignment around the details of how your mission will come alive. Do you have a clear path to services or products people are willing to pay for? Is it clear how the business will generate profits sufficient to meet the needs of both partners?

Pillar II: Chemistry

How will you work together?

It is common for two people to explore a working relationship because they feel a connection and are very comfortable with one another. Chemistry is important, as partners will likely spend a lot of time working and collaborating in an arrangement that binds them. If they have no experience actually working together, however, they could discover blind spots. Perhaps they have talked about their preferred work styles, their work personalities and their values. Different information can emerge when they experience one another in a work setting, particularly in stressful situations or conflicts. A pilot project may be prudent before making a long-term commitment to partnership if the potential partners do not have experience working together.

Pillar III: Strengths and Gaps

What roles are needed? Who will fill them?

It feels great to connect with people who are like us; however, the broader the combined skill set that resides in the partnership, the greater the capacity. An analysis of partner strengths provides a clear picture of the roles that could be filled by the partners and where additional help is needed. Just because someone can fill a role doesn’t mean that he should or that he is willing to commit to the role. It is critical that the partners reach agreement on a coherent plan that details central roles and the authority associated with each role prior to formalizing the partnership. It’s far better to check assumptions and identify deal breakers regarding roles and authority prior to forming the partnership than after.

Pillar IV: Operating Structure

What is the best legal structure to support your partnership?

Clarity from the exploration of the first three pillars informs discussion for this fourth pillar. Many people start their discussions with this pillar and build backwards. “Let’s start a company!” they declare with excitement. They become embroiled in the mechanics of all that is involved in establishing a legal partnership while bypassing the examination of the first three pillars completely. There is a continuum of structures to consider; at one end is a formal legal partnership in a new entity and, at the other, separate but allied individuals. The decision to pursue a strong or a loose connection is best made after clarity about mission, chemistry, and strengths and gaps has been deepened.

Using the Pillars of Partnership©, coaches can find and align with others who share their passion and expectations for partnership. Those who embrace partnership as a strategy to elevate their business can minimize risk by assessing partnership opportunities and vetting partners to yield a strong return on investment for their time, their cash and their emotions.