Dear Aunty B,
Several years ago I finally succumbed to the pleas of my wife (now ex anyway) to take on a business partner to try and reduce my hours.
I followed Biz-101, picking someone with complementary skills, industry knowledge and good contacts. It was all going well until a gigantic bust up at our last board meeting.
I told my business partner that I wanted to reinvest our profit and didn’t forsee taking money out of the business for at least three years.
But she wants a return straight away (she is young and lives the high life). She feels we should compromise while I feel like telling her to rack off. Who is right?
You obviously missed large parts of Biz-101.
Take the Corporate Truth or Dare session, which is aimed at sussing out the REAL intentions of potential business partners:
- What would you spend money on first? A new telephone system or a pair of cute Jimmy Choo stilettos?
- What is more important? Upgrading the website or upgrading the furniture?
- What makes you cry? Not meeting budget or your puppy chewing the strap of your new Gucci handbag?
- What would you rather do? Book the back room at a local pub for an offsite on the weekend or book a week long strategy meeting at Byron Bay to talk about the BIG picture?
- What makes your heart warm? Reinvesting in the business or buying a sexy black BMW convertible? (maybe skip that last question…)
Rowan, you are now heading for yet another costly divorce.
Here is what you need to do next time around.
- Ask the RIGHT questions before you go into business. You obviously have an emotionally low IQ. To make matters worse you can’t tell a Jimmy Choo from a ShooBiz. So take along an experienced colleague who might give you some perspective on the true motivations and personality of your business partner.
- Discuss at length the shared vision and then incorporate it into a legally binding document (although make sure the lawyers don’t bog this down in mind-altering mumbo jumbo detail). Make sure you have a dividend policy.
- Have a disputes resolution mechanism that includes mediation.
- Have an exit strategy. Make sure you have rules on how the business is to be valued and how people can be bought out.
Of course Rowan, you could always sit down with Greedy She Devil and point out the obvious: It is better to have a good time for a long time than a great time for a short time.
Geoff Black writes: Doesn’t it depend on how good is the good and how great is the great???
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