Business Partners ~ The Key to Success

 

By Brian Madigan LL.B.


Many entrepreneurs and small business owners frequently search for the key to success. The answer is often quite simple: get the right business partners.

There are two types of partners:

1) external, outside partners, and
2) internal, inside partners.

The first type is easy. Most people get this. These are arrangements with suppliers, creditors and customers. These are merchandising groups, franchisors, and even competitors. Here, the advantage is to structure a business alliance to your advantage.

The second type of partner is a true partner. This is someone on the inside who shares in the risks and rewards in the business with you. This is someone who is just as worried as you about "meeting payroll".

The advantage with a good partner is not only that you allocate the risks, you can strategically improve the business because each of you will have different skill sets. You will concentrate and specialize in some aspect of the business you enjoy. Similarly, the partner will have other and different interests.

The essential component is the ability to delegate and specialize that makes partnerships attractive. However, you can appreciate that the wrong partner could be a disaster. In the vast majority of cases, good partners will make a valuable and beneficial contribution to the business.

Actually, finding the right partners in any small business is the key to success, and allows a small business to grow into a medium sized business.

Most small businesses can divide their operations into three separate activities:

1) sales,
2) production, and
3) administration.

It's difficult to find someone who is equally good at all three. Typically, the salesman will be a disaster when it comes to administration. And, the person who loves accounting, human resources and dealing with government agencies will not likely be good at sales.

Production is exactly what your particular business is all about. So, whether you are a lawyer, accountant, doctor, hairdresser, baker, travel consultant, or manufacturer, something in your organization needs to be produced so that you can make money. It's not sales, and it's not administration, that is important here.

However, let's not underestimate the significant contribution of sales and administration to the overall success of the business. There are lawyers in law firms that do nothing more than bring in work. There are others that handle the files, and still others who oversee the entire law firm.

So, some advice for a small business that wants to grow: find some good partners, delegate, and specialize.

And, you will soon find that your small business has become a big business.

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Royal LePage Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com