Pick Partners
You have to decide who you want your business partners to be, if anyone.
Some say, “don’t do business with friends or family,” which makes sense because all the stress in business could harm personal relationships. Conversely, who else can you trust with money and important decisions if not your family or friends? There is no right answer to this dilemma. Whether or not you choose to partner with family and friends, the best bet is to have partners with great track records, and preferably deep pockets, and/or extensive skills to bring to the table.
One way to avoid having family and friends as business associates is to be part of a network where you will get exposure to potential partners for business deals. You may discover prospective partners when doing the informal personal network building that is necessary for your marketing and other business purposes.
There are many ways to expose yourself so you can meet the right types of people to try to partner with for your new business: join associations, groups, Chambers of Commerce, country clubs, gyms in affluent areas, on-line special interest groups, and so on.
If possible, partners should have many personal references, and you should feel a sense of compatibility and trust. The longer you’ve known someone, the more qualified you are to consider them for a partnership.
If you can finance your small company without partners, then you can keep all the profits for yourself, as long as you can handle all the risk yourself. If you have the confidence required to succeed, then the risk is lower than it would be otherwise.
Also, take into consideration whether you’d prefer to own half of a business or a whole business half the size. Realistically, you want to own more than 51% of any company that you operate because owning more than half of a business leaves you with final control over the decisions, unless you have special covenants that specify otherwise in your shareholder operating agreement.
Of course, you still need to have the self-confidence that we mentioned in the first chapter, or you are better off working for someone else. In that case, your bosses are likely to dictate how much, if any, stock you will get. They will avoid letting you get to 51%, to say the least.
