Posted by Once upon a time…
…two cat lovers, Chris and Jessica, started filming their cats Marmalade, a male ginger tabby, and his black long-haired adopted brother Cole and putting the videos on YouTube and other social media sites.
People loved Cole and Marmalade and their audience grew, earning them enough money to fund their efforts to rescue and rehome cats all over their city.
Then one day Chris entered into a contract with two online marketers who promised to take the Cole and Marmalade social media channels to new heights and make even more money for Chris and Jessica and their rescue work. The new partnership was called the Cole and Marmalade Network.
All seemed well for awhile, until it wasn’t well at all.
Now Chris has accused the two marketers of trying to steal the business out from under him by ‘firing’ both Chris and Jessica from the business.
The marketers have physically seized control of all media channels as well as Chris and Jessica’s cell phones, computers, cameras and video footage, and filed suit against Chris and Jessica, who have filed a countersuit.
The Fans Take Action
When fans learned that Chris and Jessica’s content were allegedly stolen from them, they did two things:
First they unsubscribed in droves from Cole and Marmalade’s social media accounts in protest.
Second, they started threatening the 2 online marketers with harm. Since the lawsuits were a matter of public record, it wasn’t difficult for fans to find the names, addresses and telephone numbers of the two marketers. (I’m simply reporting what happened and absolutely NOT condoning the actions of these passionate but somewhat misguided fans.)
This second bit should give any marketer pause. If you do something that appears to go against popular icons (in this case, Cole, Marmalade and their humans) you might keep in mind that you could be making yourself a target of wrath.
And it just gets messier from there.
I’m not here to say who is right or wrong, but rather to point out a couple things you want to be aware of should you ever partner with someone else in any capacity, whether you’re the online marketer partnering with a content creator, or the content creator partnering with an online marketer, or any partnership you might enter into.
Chris and Jessica indisputably started this business themselves. It was 100% theirs. But there came a time when they thought partnering with two people who were savvier about online promotion and marketing could help propel their business and their cause to a higher level. That’s totally understandable and can sometimes be a smart move.
A HUGE Mistake?
However, in my opinion they made a foolish mistake in giving each of the two marketers a 33.3% share of the business, while retaining only 33% for themselves. This made them minority partners in their own business. They could be outvoted or forced out, and indeed this seems to be what happened.
I’m no lawyer, but if you start a business and then take on a partner, you might want to consider retaining 50% or higher stake in your own business.
A Better Move
And upon further consideration, you have to wonder why Chris and Jessica felt the need for partners at all. Why not hire experts to help them? It would have cost far less than 66.6% of their business, and they could have fired the experts any time they liked.
I suspect the marketers talked a very good game and convinced Chris and Jessica this partnership would allow them to focus all of their efforts on creating content and helping the stray cats, the two things Chris and Jessica were passionate about, while leaving all the marketing to the marketers.
I understand the desire to hand over 100% control of the things you don’t like doing in your business, but it’s never a good idea to hand over 100% of anything in your own business, ever.
Why is This Important to You and Me?
This story captured my attention for two reasons – one, I love the two cats, Cole and Marmalade, and I remember watching their videos in the past (I somehow lost touch with their YouTube channel in the last couple of years.)
Second, it sent chills down my spine realizing that one bad partnering mistake could result in losing my business and ending up in endless court battles to try to get it back.
And the entire debacle could then be aired out in public on the internet.
Thus, I’ve turned to the experts to find 7.5 things to think about BEFORE you ever partner with anyone on anything (that sounds extreme, but so is losing everything you’ve worked for.)
The entire concept of partnering is to add skills to your business that you alone cannot provide. In this example, a content creator partnering with an online marketer could make sense, if for some reason the content creator can’t simply outsource the marketing portion of the work and oversee it himself.
7.5 Things to Consider BEFORE Business Partnering
Make sure partnering is worth it. Does partnering bring more benefits than not partnering? That is, will you, your brand, your product or cause be in a better position because you partner than it would be if you didn’t partner, and instead outsourced?
Don’t rush in. Are you sure you want to do this? Is someone pressuring you to make this partnership? Enthusiasm has its place, but a thoughtful business plan with each partner’s commitment clearly outlined is needed here. Review the positives and negatives before signing anything.
Choose the right partner. If their goals, values or morals don’t match yours, or if they have a different vision of what’s going to happen, then this isn’t going to work.
Have a signed agreement. Every detail should be spelled out and signed by all parties. It really is best to have a lawyer for this. Make sure you have a clearly defined exit strategy in your agreement that allows either partner to buy out the other without destroying the business.
Include a non-compete agreement. Done correctly, this will prevent one partner from taking clients, assets or confidential information from the business to use in another business.
Each partner should bring their complimentary strengths. It might not make sense for two course creators to create a partnership (they could simply joint venture together) because they both bring the same strengths to the table. But if one partner creates courses and the other does all of the marketing, then they are using their complimentary strengths to build something bigger than either of them could build alone.
Consider a limited partnership. If you’re backing a business financially but not making a hands-on commitment, then a limited partnership could allow you to reap the financial rewards without being liable for actions of the general partner.
Egos should be left at the door. If one of the partners feels more important than the other, the business is likely to suffer. And if there is a lack of trust in each other, there will be second-guessing, suspicion and serious problems with communication and direction.
I don’t want to make partnerships seem like a scary thing to always be avoided. There are times when a partnership can be your best avenue to growing your business exponentially while taking some of the responsibility and time commitments off your shoulders.
Here are 7.5 Reasons to Consider a Partnership:
Two heads can indeed be better than one. Having a great partner can multiply ideas and business experience. Together the two of you can find better ideas and solutions as you build on each other’s strengths. In a great partnership, one plus one does indeed equal three.
Double your resources. One partner has the products, the other has the contacts and customers. One partner has the experience, the other partner has the fledgling business. One partner could be in the shop making the product while the other partner is out pounding the streets and making the sales. If you only have half of the puzzle pieces, it can be easier to find someone with the other half rather than trying to build those pieces yourself.
Double your strengths. You have an eye for detail, your partner can see the big picture. No one is great at everything, but everyone is great at something. Finding someone who fills in your own gaps can be a real blessing for your business.
Together you can take great risks and reap greater rewards. Alone you might not have the assets or the mindset to take a leap of faith. But working together, you can figure out how to get it done and rely on each other to leave your personal comfort zones and expand your business.
Partners can tell you when you’re being an idiot. Sometimes we get a ‘great’ idea that is about to spell disaster. A partner can reign you in at these moments and let you know you’re not seeing the entire picture.
Having a partner is more fun. Assuming you enjoy each other’s company, business is a lot more fun when you can share it with someone else. You’re facing challenges together, which makes everything less scary and more exhilarating.
You can take a break. There are times in business when you need a break from the customers or even from the business. If you’re going solo, there is no one to pick up the slack. But with a partner, you can take a day off or let your partner deal with the customers while you work on other things.
Your partner is a source of emotional support. You won’t hear many people talk about this one but having the right partner can make all the difference when you hit milestones, both good and bad. When a customer goes full on crazy and trolls your social media accounts looking for blood, you’ve got someone right there to help you through it. And when you land that big account you’ve been working on for weeks, or you see your latest launch go to a large six figures, you’ve got someone to jump and scream with happiness with you.
A Few Quick Partnership Q and A’s:
What is the difference between a joint venture and partnership?
The members of a joint venture have teamed together for a particular purpose or project. Once that purpose or project ends, so does the joint venture.
The members of a partnership have joined together to run a business together, usually intending to be together for as long as they own the business.
What are examples of possible IM partnerships?
- One person is great at making content and another is great at driving traffic to that content. The content creator focuses on content, the partner drives traffic, sets up sales funnels and does the general marketing.
- One person is an expert in a niche (any marketable niche) and the other person is great at marketing. The expert creates a product or course and the marketer sets us the sales funnel and drives traffic. (You can do this repeatedly with experts who know nothing about online marketing.)
- Two people with very similar businesses and audiences, who enjoy working together, decide to combine forces, lists, brands and so forth. Two heads working together can often come up with more and better ideas than two people on their own. And they can take turns taking time off while the other one minds the business.
- A software engineer and a marketer. The engineer makes something new, like a social network, and the marketer grows the user base.
Can you give examples of great partnerships?
A few of the more famous partnerships are:
- Steve Jobs and Steve Wozniak of Apple
- Mike Krieger and Kevin Systrom of Instagram
- Elizabeth Cutler and Julie Rice of Soul Cycle
- Larry Page and Sergey Brin of Google
- Richard and Maurice McDonald of McDonald’s
If I’m going to partner with someone, should I have a lawyer?
Yes.
While you can take a standard partnership agreement and modify it to suit your needs, ideally you want legal representation. Imagine if your company grows to become worth millions… you’ll be glad you set things up correctly in the beginning.
If money is an issue, try doing a Google search for ‘affordable legal services’ and you’ll likely find several options.
What typically goes into a partnership agreement?
- The name of the partnership
- Each partner’s contributions
- Allocation of profits, losses, and draws
- Definition of each partner’s authority and decision-making ability
- Management guidelines
- Procedures for admitting new partners
- What happens if a partner withdraws or dies
- Dispute resolution
What should I ask my potential business partner?
Ask anything and everything you want to know. This is no time to be shy.
Here are seven questions to get you started:
- What is your vision for our company? (And is it the same as yours)
- What are your strengths and weaknesses? (And do they compliment yours)
- How much money will we each contribute to the business?
- How much time can you dedicate to the business?
- How will you handle conflict or trying circumstances?
- Will you agree to put everything in writing?
What’s your exit strategy? (If they have to leave, will they want you to buy them out? Or would they prefer to sell their interest to a third party?)