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Partnerships

Essential Elements of Working with a Business Partner

When Bryan Burkhart and Sonu Panda launched their New York-based subscription floral service H.Bloom in 2010, they spent every working moment together.

Paul Andruss

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“We went to the flower market at the crack of dawn, interviewed every type of potential hire and drove a ZipCar around Manhattan to figure out how to scale deliveries,” says Burkhart, CEO. “We needed to learn the ins and outs of the business together so we could set the direction of the company together.”

As the business took off, though, the founders realized they also needed to work independently on various tasks so they could build the company on multiple fronts simultaneously. Today, Panda runs the day-to-day operations, directing engineers, buyers and managers of H.Bloom’s five regional markets; Burkhart focuses mainly on sales, marketing and investor relations.

“We have a clear division of labour and discrete roles and responsibilities,” Burkhart says. “[Panda] does much of the work that is gruelling and detail-oriented, things that I find extremely painful but are integral to our success. But we had a very honest discussion upfront about how we would think about splitting up the workload and making sure we were both OK with it.”

Having a co-founder is great when it comes to sharing the grunt work, holding late-night planning sessions and perpetuating a sense of camaraderie. But once a business is up and running, it can be complicated to determine who should do what, who shouldn’t do what and where the buck stops.

Divvying up duties is important to avoid duplicating efforts, to work more effectively and to play to each founder’s talents. “You need to look at the experience, strengths and styles of each partner and apply them to the needs of the company,” says Joni Fedders, president of Aileron, a Tipp City, Ohio-based non-profit that mentors private businesses.

Divvy It Up

There’s a clear delineation of responsibilities for Jonas Falk, CEO of Chicago-based healthful school-lunch provider OrganicLife, and his business partner, Justin Rolls. “I hadn’t filed tax returns in five years, but Justin has paid his taxes quarterly since he was 18 years old,” Falk says.

“He’s very paperwork- and detail-oriented, and I can’t stand paperwork; I like to focus on the creative things. But each of us having different strengths is what makes our business successful.”

Also important in deciding who does what are lifestyle differences, say Kirsten Lambert and Joan Ripple, founders of Hingham, Beantown Bedding, which makes biodegradable, compostable bed linens.

“Kirsten is a night person, and I’m a morning person,” Ripple says. “But it’s a positive thing, because she can do follow-ups in the evening on things that may be urgent, and I can do the same in the morning. Embracing our differences brings depth and perspective to the business.”

Flexibility is key, even when duties are clearly defined. At times dividing lines must be blurred for the good of the company. For example, partners should be prepared to work their personal connections when necessary, regardless of whether the task at hand falls under their purview.

“Sometimes our duties are based on the function, but sometimes it’s the relationship that matters, and you both have to know it’s OK to cross over when situations like that arise,” says Ripple, who stepped aside from her typical functions when an influential advisor felt more comfortable working with Lambert, with whom there was a previous relationship.

There may be times when founders reach an impasse on a task no one wants to tackle. Fedders suggests compromising on a rotation – i.e., “You take it this year, I’ll take it next year.” If you and your co-founder absolutely can’t agree to share the undesirable jobs, consider enlisting outside help.

Ripple has turned to others for functions ranging from web design to merchandising and sustainability. “Don’t be afraid to outsource where there are gaps in knowledge,” she says. “When we wrestle with something, getting help from an outside expert is definitely worth it.”

Make It Official

Even though job descriptions may seem obvious, Fedders says it’s a good idea to officially clarify individual responsibilities among all involved, particularly in high-level areas of operation. “Instead of just saying, ‘Is sales your responsibility or my responsibility?’ go deeper and ask if that person is also responsible for the selling structure, compensation and new client acquisition,” she says. “The greater the clarification, the better off you are.”

She recommends utilising common organisational tools, such as a good, old-fashioned org chart. “Just get it down on paper in some form,” she says. “‘Here are the areas of responsibility you’re taking; here are the ones I’m taking,’ and then include a breakdown of all tasks that fall under those categories.”

Even after responsibilities have been decided upon, Fedders suggests revisiting them regularly. “There’s a different leadership style needed when you’re going through a start-up phase vs. when you’re more in a growth stage,” she says. “As you grow and add people on, responsibilities are divvied up more. So revisiting those areas and responsibilities on a fairly frequent basis, especially when you’re in high growth, is critical.”

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What PayPal’s Rocky Beginnings Can Teach You About Start-up Success

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Keep Communicating

It’s also essential to connect regularly – not just for accountability, but so each founder has a complete picture of how the business is evolving. In an expanding company, though, individual workloads can make that harder than it sounds.

When H.Bloom launched, Burkhart and Panda had plenty of time to talk shop. But that changed when they expanded into Washington, D.C. “He was so focused on keeping the lights on in New York and I was so focused on trying to turn the lights on in Washington that we lost that connection,” Burkhart says. “We weren’t communicating as frequently, and therefore we weren’t on the same page about direction anymore.”

The two resolved to schedule quality meeting time together every week – breakfast, dinner or sometime in between. Other entrepreneurs would do well to follow their lead, Aileron’s Fedders says. “When you have your own individual responsibilities, that constant communication takes time, energy and effort, but that’s what it takes to stay strong together,” she says. “If you don’t, it can wreak havoc on your organisation.”

A common thread among successful partnerships is that they’re based on shared core values about the business and a mutual conviction that its success trumps everything else.

“We both care a lot about food and everything that goes into it, and serving people – and those shared beliefs are what lets each of us trust the other and his judgment to do his own work,” OrganicLife’s Falk says. “Stuff comes up 100 times a day, every day. If you have to spend any time wondering what your partner is doing or bickering about who’s doing what, you’re never going to have a business.”

Adds H.Bloom’s Burkhart: “Even if we run into disagreements, we know we both care so deeply about what we’re doing that at the end of the day, we trust one another to go off to our separate roles and responsibilities and make it happen better than anybody else we know.”

The Deciding Factor

Working with a co-founder comes with challenges. Whether it’s dividing responsibilities, agreeing on a pace for expansion or plotting other strategies, decision-making is surely near the top of the list. “Decision-making obviously becomes slower in a partnership, because now you have someone else you have to run the decision by,” says Joni Fedders, president of business consultancy Aileron.

“That complicates things, because we all have different perspectives, different expectations and different styles.”

When hashing out who should and shouldn’t handle certain responsibilities, it can be helpful to create a framework of core values and principles for co-founders to consider when making decisions. “The more you can clarify these,” Fedders says, “the better it helps your decision-making process.”

Sample questions might include:

  • What are our goals and objectives?
  • What is our strategic plan?
  • How do we define our values?
  • What is our company culture?
  • How do we expect behaviours to work?

Paula Andruss is a freelance writer and editor who has contributed to hundreds of articles to national consumer, business and custom magazines and websites, including Woman’s Day, USA Today, Entrepreneur, Parents, Parenting and more.

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The Foundations Of Growth

How Jurie Venter has focused on working with the right partners and doing thorough market research to achieve business success.

Introstat

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Vital stats

  • Player: Jurie Venter
  • Company: umAfrika Gaming Technology
  • Est: 2014
  • About: umAfrika is the provider of Gaming Products and Services to South Africa and all other countries in Sub-Sahara Africa and the Indian Ocean Islands.

Three years ago, umAfrika Gaming Technology co-founder, Jurie Venter split from an international company to start a more locally focused business. umAfrika bought a going concern in the South African gaming market. It was a great opportunity with one big catch: They had to launch with an ageing international infrastructure.

Look for opportunities

Although leaving a large international brand and all the support it offers can be daunting, Jurie understood his goals, and how he aimed to get there.

“Although there was a shift from an international focus to a local one, the foundation of the business stayed the same, with the added benefit that we now had local shareholders and could service local businesses.”

Related: Listen And Learn: Why Podcasts Aren’t Just For Start-up Founders

Jurie knew he could build a strong business because he had done thorough research into the South African market. The international market was similar enough to South Africa to prove the concept, and research revealed the local market was large enough to offer a great opportunity.

The Lesson: Make sure there is a need for your offering. By international standards, South Africa is a relatively small market. Jurie and his team needed to ensure there was a large enough local market before they invested in support, staff or infrastructure.

Partner for success

“It’s very important to work with the right partners,” says Jurie. “Focus on developing long-term relationships wherever you can. You want a partner that is reliable and has the right tools to help and enhance your business. I want to know that whenever I pick up the phone to a supplier, there is always someone on the other side who can help me.”

What’s the secret to building such great partnerships?

“Be honest and open in your business and partner with companies that are honest and open with you,” says Jurie.

“For example, we have an excellent partnership with Introstat, which had been building momentum for a few years — long before we created our own independent business. What’s been phenomenal is how we’ve grown together. When they first came onto our radar they only supplied printers. Over the years Introstat has grown into the areas that we needed to grow and enhance our business. We’ve been able to walk this path together.”

The Lesson: As a start-up or SME, you will often work with service providers who are also on a growth path. Work together — with the right relationship and support, you’ll actually grow together. This can work in a number of ways. Your support allows your suppliers to grow and extend their product and service offerings, which then helps you to expand, or in other cases, clients expand overseas and can take you with them. Partner with a business that you can develop a close relationship with, someone who is reliable and has your best interest at heart. The best way to do this is to ensure your values are aligned. Relationships and support are the foundations of business. Build these with your suppliers and your clients — look at business holistically.

Related: The 10 Best New-Age Business Ideas You Haven’t Heard About Yet

What Introstat can do for you:

  • Years of ICT sector experience brought forward to help you grow your business
  • As an HP Platinum Partner Introstat has access to the full range of HP products from Hardware, Software, Networking  to HP Financing and leasing options
  • Through its consulting expertise, Introstat determines the finest solution for your business
  • Introstat has a team of qualified engineers  that can service and maintain your printer fleet and ICT environment nationwide
  • Offers both onsite and remote technical support
  • Provides services within IT Security, Managed Print, Networking, Server/Storage, Cloud, Hosting, VOIP and IoT Connectivity
  • Introstat is a Premium supplier of PCs, laptops, printers, ink and toner with a national distribution infrastructure
  • A BBBEE level 1 company.

Let Introstat show you the new HP A3 Multifunctional range, the most secure printing devices in the world.

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Partnerships

What To Do When Partnerships Go Bad… Very Bad

What do you when the honeymoon is over and you discover that you’ve gone into business with a snake?

Alan Knott-Craig

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Q: My business partner is trying to screw me out of my business. I approached him a month ago to say I wanted to chase a different path, and sell my minority stake. It’s worth R1 million, but the shareholder agreement says that if I resign he has a call option to buy the shares for nil. His response to my request to exit was that he would exercise his option and pay me nil. What should I do? Should I stay? Should I walk away from the shares with no money? Should I fight for what he owes me? I’m not happy in the company, but I can’t bring myself to write-off the value of my shareholding. — Anonymous

Know who you’re partnering with

I have bad news for you. You’ve lost your money. Kaput. Gone. Minority shareholdings in unlisted companies are worthless, unless you’re in bed with honourable people.

If your majority shareholder is a crook, you’re screwed. You can’t sell to someone else, and a crook won’t do a fair deal to buy you out. If you stay, you’re delaying the inevitable.

You will be screwed. Rather leave now than later. Rather be happy than hang onto the promise of a pot of gold that never materialises.

Focus on creating new wealth

You’re an entrepreneur, so you have the instinct to fight. To never give up. To persevere. This is one of those times where your instinct is wrong. If you fight, you’ll end up in the mud with a pig. Pigs love the mud. He’ll enjoy it, you won’t. Worst of all, you’ll invest energy in trying to regain what you had rather than creating new wealth.

It’s a bit like trying to win back the girlfriend who cheated on you, rather than going out and finding a new girl. Rather find a new girl.

Don’t seek revenge or short term satisfaction

Once you’ve accepted that staying is not an option, and nor is fighting, the next reaction is revenge. “Damn it, I’m going to punch him in the head!” Short-term satisfaction. Long-term, it makes you look bad. And maybe you go to jail.

The best outcome you can hope for is that your story gets traction in your industry/circle of friends/town before his story. Believe me, he has already told everyone he knows that you’re unethical and screwed him. That’s what crooks do.

Related: 7 Ways To Quickly Spot The Wrong Partner (And 3 Tips To Get It Right)

Good luck fighting the war of whispers. Rather don’t. It’s bad energy. Who cares what people think. The people who care don’t matter, the people who matter don’t care.

Let your reputation define your achievements

In the end your reputation will be defined by your life’s achievements, not by the words of a crook. If you are a nothing, no one will care about his words. If you make it big, no one will care about his words.

If you want revenge, be successful. Success is the ultimate revenge. The rule for partners is this: Make it easy for them to screw you early. That way you don’t waste a whole lot of time with the wrong partners.

Whatever happens, remember this: Life is an adventure. It’s your choice how you describe your story. Is it a sad drama (‘Oh woe is me’), or is it a funny story with some speed-bumps and a happy ending? Frame your story as the latter. You hit a speed-bump, not fun. But not the end. The truth is that business is rough and tumble. So toughen up.

Don’t lose faith in your abilities

This is where it’s useful to have a loving spouse. With him or her at your back you can withstand anything. Whatever happens, don’t lose your self-belief. You have the magic.

You’ve had a bad experience in business. So what? You trusted someone. That’s not such a bad thing. You just got a bit unlucky that he was a crook. Next time lucky. But there is no next time if you lose your self-belief.

Winston Churchill lost all his savings to financial con-men in 1929. He said he was faced with two choices: Fight to get back what he lost, or make more money. He decided to make more money. Keep moving forward. Don’t look backwards.

PS: The best way to deal with a crook is to play dead. Cut him loose. Don’t engage at all. Just play dead.

Related: 5 Things to Do Before Saying ‘I Do’ to a Business Partner

Listen to this

Alan’s audible book Be a Hero: Make Life an Adventure is now available on amazon.com and Audible.com

Read by Alan himself, Be a Hero is a collection of stories on how to make your life an adventure but also changing your mind-set and tackling adversity.

Ask Alan
Do you have a burning start-up question? Email: alan@herotel.com


Read ‘Be A Hero’ today

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Make Absa Your First Business Partner

Thinking of starting your own business? We’ll help you think further with a start-up plan, funding, payroll guidance and Enterprise and Supplier Development solutions for your business.

Absa

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Thinking of starting your own business? We’ll help you think further with a start-up plan, funding, payroll guidance and Enterprise and Supplier Development solutions for your business.

Firstly, consider opening an Absa Business Banking Account by choosing from our range of tailored transactional account options online. You’ll be able to make and receive payments through multiple channels that make your banking as hassle-free as possible with our cash handling solutions and merchant services.

Plus, if you are a new business owner you can open any of the business accounts we offer online, register your new company with the Companies and Intellectual Property Commission (CIPC) and get a South African Revenue Service (SARS) tax number in one go.

Related: Business Partners Limited Explain What It Takes To Have The X (Fundable) Factor

A business plan is also essential for every entrepreneur, as it forms the roadmap of how your business will achieve its goals and should include its operational, financial and marketing strategies. Our team of experts will always be available to give you all the assistance you need with your business plan.

Once you’ve drafted a comprehensive business plan and you are ready to venture into the world of business, your next step is to register your business as mentioned. SwiftReg assists with checking existing company names and registering your company’s name, B-BBEE certificates, clearance certificates and more.

We also offer advice to franchisees, whether you’re thinking about buying a franchise or want to turn your existing business into a franchise network. And, if it’s funding you need, we’ll work with you to find the right solution. Our business funding solutions cater for start-ups and existing small, medium and micro enterprises (SMEs) with working capital or expansion finance needs.

Related: 10 Questions to Ask Before Committing to a Business Partner

Lastly, when you need help moving your fully-formed business plan in the right direction, you can visit any of our Enterprise Development Centres across South Africa to build and grow it from inception until maturity through unlocking access to financing, markets and business development support services.

For more information or to open an Absa Business Banking Account online, visit our website.

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