Do you really need a Business Partner?
2023/06/05 6:00 AM
I have had many partners over the past 20+ years… some good and some horrendous. I have spoken on many investor tele-summits and wanted to recap a few main points for you in case you missed out……and hopefully I can help you avoid all the yucky stuff.So many entrepreneurs assume that business will be easier if there is a partner to share the “burden” with. What they fail to look at, is the reasons they are hoping someone will be there for them. All things considered, it sounds fun to have a partner right?
So the BIG question to ask yourself, is “Why are you looking for a partner rather than an employee?”
- Are you hoping to have a partner in crime to toss ideas around with?
- Are you looking for someone who is better at something that you think you are?
- Are you looking for someone to keep you company?
- Or, are you looking for a financial partner?
The bottom line, is that partners usually take a portion of the business…..and keep it forever. Sometimes we can easily fill the “void” with an employee who will happily do their JOB and not expect any shares in exchange. This is actually the ideal choice for a company unless they are seeking capital. Having a slew of employees will get you the relief you are looking for at a much lower overall “end game” cost.
But, if you do need someone to invest in your company to bring in more working capital – and you are giving up some equity (most likely) – one major piece of advice I can offer is to be sure to have it VEST over time (possibly quarterly) and do not give it all up at once to make the deal seem more attractive. I lost a big portion of my handbag company to a “partner” who got 20% up front and then quit a year later and then I had no shares left to get a new partner. This left me in a very difficult position. You want to be sure to make them earn it each quarter. A good attorney can help you structure a deal like this. In my opinion, any rational investor will be proud that you are taking care of yourself in the deal. If you think about it from their point of view, if you let them walk all over you, that doesn’t bode well for how you run your company and make decisions. Don’t be afraid to stand up for yourself.
A good attorney will also advise you to have a very clear working agreement, and that the investor/partner has specific goals to hit before getting their vesting shares each quarter. They can be any kind of goals – financial, developmental, creative etc… it obviously all depends on the company needs. If you are not sure of each personas exact duties and how that will play out over time, your agreement can state that the goals can be
re-accessed each quarter or every 6 months and duties reassigned. You might find that someone becomes proficient at something new and needs a new job…..everything is up for negotiation. Just be sure to be clear on what constitutes enough to earn the shares.
re-accessed each quarter or every 6 months and duties reassigned. You might find that someone becomes proficient at something new and needs a new job…..everything is up for negotiation. Just be sure to be clear on what constitutes enough to earn the shares.
The most important thing you can do for yourself in making a deal like this, is to have a lawyer who represents you separately from your business. Your trusted “company” lawyer will not (legally and morally cannot as far as I understand) have YOUR best interest at heart. They are required to make the best deal for the company. I cannot stress how important this one step is. Your own attorney will see to your best interests and make sure a fair deal is worked out.
One last thought: If you have a trademark and it is currently in the name of the (your) company, I suggest re-filing the Trademark and reassign it to your own personal name BEFORE doing anything and then license it to the company. This way you can retain the rights to the Trademark. If the company owns it and you get ousted, or end up closing it, the Trademark may possibly never be able to be used by you again. This is just some extra protection that I strongly advise – again, not an attorney and you can ask yours – just my opinion since I lost the rights to my own name, I want to help you protect yours.
For more thoughts you can read this next blog on How Investors can ruin your business.
Love to know your thoughts on partners – please share with me below.
Related posts
There are 2 comments
Lorea S. says:Sarah,
I have a biz friend that is dealing the ins and outs of a “partnership” and for some of the exact reasons you listed. This is some really good advise that you gave and I’m going to forward this to her…..I learned a lot for myself as well even though I don’t have and really do try to steer away from partnerships if at all possible. Thanks!
Leave a comment
Want to express your opinion?
Leave a reply!
Leave a Reply
Testimonials
Your program is already helping me sooo much.. and I finally feel like there is a light at the end o… Read more
Shiksona Beauty
"20px" /> the website looks great. I am so… 
I LOVE working with Sarah! The best business decision I’ve made recently is joining Sarah's Retail Revolution program to learn how to gain exposure and grow revenue for my handmade business, Shawn Sargent Designs. Sarah is that guiding and supportive voice in your head – and literally on the calls every week, which is an invaluable part of the program. Within three months of working with her, her expertise helped me land Real Simple's Holiday issue as my first magazine feature, which provided a huge boost in our Q4 sales and gave us national exposure! She also takes a personal interest in our products and growth. Recently she introduced me to a rep that got my products onto The Grommet and is connecting me to revenue streams I couldn’t have reached so quickly on my own. Sarah helps push limits in a positive way, and her ongoing support gives me confidence and momentum to grow my business and reach new goals. Working with Sarah is amazing, and I’m excited for what’s ahead! — Shawn Sargent, Shawn Sargent Designs ![]()
![]()
#sarahshawconsulting #entreprenette #beyourownboss #femaleentrepenuer #femaleentrepenuerlifestyle #womaninbusiness #bossbabe #productresearch #productdevelopment #mistakeshappen #smallbizcoach #businessgoals #businessstrategy #growyourbusiness #businessplanning #momsinbusiness #mompenuers #solopenuer #entrepenuerwoman #businessbuilding #coachingbusiness #businesstraining #leadership #femalebusinesscoach #onlinebusinesscoach #leadersinheels #ceoofmylife #thehustleisreal #confidencecoach #productcoach
Are you thinking of getting your products into magazines?![]()
Good idea!![]()
![]()
That is a fast track to getting more credibility for your brand really quickly. ⭐️![]()
![]()
I have been in Instyle over 6 times and I want to teach you how to get into magazines too!![]()
![]()
Check out this video and book a call on this link with me so I can share how to do it.![]()
sarahshawconsulting.com/sarahshaw/![]()
![]()
❤️ Sarah![]()
![]()
#sarahshawconsulting #entreprenette #beyourownboss #femaleentrepenuer #femaleentrepenuerlifestyle #womaninbusiness #bossbabe #productresearch #ProductDevelopment #mistakeshappen #smallbizcoach #businessgoals #businessstrategy #growyourbusiness #businessplanning #momsinbusiness #mompenuers #solopenuer #entrepenuerwoman #businessbuilding #coachingbusiness #businesstraining #leadership #femalebusinesscoach #onlinebusinesscoach #leadersinheels #ceoofmylife #thehustleisreal #confidencecoach #productcoach
The truth is, stores are inundated with requests from other vendors trying to get their products on shelves. To stand out and have success, you need to have a plan in place. That’s why I created my FREE Masterclass on how to get your products into boutiques with ease – so you can develop a strategy for success when it comes to selling your products wholesale.![]()
![]()
In this free masterclass, I’ll walk you through all the steps needed to create a successful wholesale strategy. From crafting an effective email pitch that will grab store owners’ attention, to understanding the types of stores that will be interested in carrying your product, I’ll share all my tips and tricks for success![]()
![]()
You’ll also learn how to turn one store into multiple stores by leveraging key relationships. And I’ll show you how to scale your effort without increasing your workload using my time tested strategies that I used to sell over $8 million dollars of my own products. With these strategies in hand, you can quickly grow your business and increase sales through wholesale!![]()
![]()
What are you waiting for? Sign up now for my Free Masterclass today and start taking steps towards achieving the success you deserve!![]()
![]()
Check out my free training here: sarahshawconsulting.com/sarahshaw/![]()
![]()
Xoxo![]()
Sarah![]()
![]()
#sarahshawconsulting #entreprenette #beyourownboss #femaleentrepenuer #femaleentrepenuerlifestyle #womaninbusiness #bossbabe #productresearch #productdevelopment #mistakeshappen #smallbizcoach #businessgoals #businessstrategy #growyourbusiness #businessplanning #momsinbusiness #mompenuers #solopenuer #entrepenuerwoman #businessbuilding #coachingbusiness #businesstraining #leadership #femalebusinesscoach #onlinebusinesscoach #leadersinheels #ceoofmylife #thehustleisreal #confidencecoach #productcoach
Sarah has always been so knowledgeable and has helped me so much in growing my business and getting my Daybooks out into the world. She most recently helped me prepare for the NY Now Gift Show which turned out to be a great opportunity to gain more exposure and make connections that I know will help me take my business to the next level. She is the real deal. She knows her stuff and is so dedicated to supporting women in business.![]()
- Noelle Van![]()
![]()
#sarahshawconsulting #entreprenette #beyourownboss #femaleentrepenuer #femaleentrepenuerlifestyle #womaninbusiness #bossbabe #productresearch #ProductDevelopment #mistakeshappen #smallbizcoach #businessgoals #businessstrategy #growyourbusiness #businessplanning #momsinbusiness #mompenuers #solopenuer #entrepenuerwoman #businessbuilding #coachingbusiness #businesstraining #leadership #femalebusinesscoach #onlinebusinesscoach #leadersinheels #ceoofmylife #thehustleisreal #confidencecoach #productcoach
Magazine editors are always looking for the next HOT thing. It’s your job to keep them looking at your products. Use different subject lines to entice them to open your emails. Share different ways to use your products, wear them, share how they smell or how they improve your skin etc..![]()
![]()
For more info click here to learn more about working with Sarah![]()
sarahshawconsulting.com/sarahshaw/![]()
![]()
#sarahshawconsulting #entreprenette #beyourownboss #femaleentrepenuer #femaleentrepenuerlifestyle #womaninbusiness #bossbabe #productresearch #productdevelopment #mistakeshappen #smallbizcoach #businessgoals #businessstrategy #growyourbusiness #businessplanning #momsinbusiness #mompenuers #solopenuer #entrepenuerwoman #businessbuilding #coachingbusiness #businesstraining #leadership #femalebusinesscoach #onlinebusinesscoach #leadersinheels #ceoofmylife
