Making the transition from running your own business to a partnership can be tricky, but it’s a move made by many entrepreneurs looking to grow. What matters is how both parties handle the change.
Christian Borkowski, co-founder of Primewealth, now ThePrimeAdvisoryGroup, knows what’s it’s like to make this transition – he’s done it twice. But as Borkowski points out, there’s more to it than shaking hands.
Primewealth was formed in October 2007 through the merger of Borkowski’s accountancy firm and a financial planning operation run by Guy Wall.
Peter Gooden then came on board to complete the all-round financial offering.
The Sydney-based business, which now employs 22 staff, is aiming to record around $4.25 million in revenue in 2011-12. Primewealth also ranked sixth in this year’s StartupSmart Top 50.
But it’s taken awhile for the business to get where it is today. Borkowski says making the transition from solo operator proved to be more challenging than he thought.
“I’ve been sole trading since the early 90s. The person I merged with had run a business for about 12 years,” Borkowski says.
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“With the initial merger, I merged with a financial planner. That one was reasonably seamless. It was more of a challenge when we did the next merge nine months later.”
“The founder (Peter Gooden) has a similar background to myself. He’s a chartered accountant with financial planning qualifications. We had to find a way of [combining our] services.”
After several frustrating months, the partners decided to discard all existing systems, essentially starting from scratch.
“We threw out all of my processes and all of his, and looked for a set of systems and processes as if we were starting a brand-new business. We really did go with something fairly brand-new,” Borkowski says.
The move proved to be a victory for the business rather than a setback, as a “brand-new” business model meant a multitude of new ideas.
This included a rebranding exercise, with the business renamed ThePrimeAdvisoryGroup in May 2011.
“One way we engage with our clients each time we do a piece of work is give them a fixed price upfront, so there’s an element of no surprises,” Borkowski says.
“We also started asking for a 50% deposit at the commencement, and the balance on completion. It turned out to be a great decision in terms of our cashflow.”
“Quite often when you do accounting work with clients, you get 90% of the way through and they don’t give you the last 10% to actually finish. When they’ve paid half the money, the problem goes away.”
Borkowski says while the merger was initially somewhat stressful, it taught him how to be a better business partner.
“With sole trading, you do everything your way. A partnership is all about give and take,” he says.
“When you’re married, you can achieve certain things in your life you can’t as a single person. That’s a good analogy for business as well.”
“When you know you’ve got a good team around you and a good infrastructure and the ability to service a larger client, you’re then far more comfortable pitching for the work.”
“When you’re a sole trader, you’re a bit fearful that you won’t be able to handle the work if you win it.”