I recently formed a partnership with a friend to launch Way More Living, a website designed to help people turn the second half of their lives into the best years yet. We’re just getting started, but we’re aiming to make it as valuable a resource for seniors as my previous site, BusinessKnowHow, became for small business owners.
My original plan was to start the website on my own, and I had been thinking about it for quite a while. Being a content strategist—and a senior myself—coming up with content ideas for the site was easy. But the tech side of building a website isn’t something I’m good at or enjoy. So, the project remained simmering on a back burner.
Then, my friend, who owned an IT and web development company for many years, mentioned that he was thinking of doing something similar in his spare time. It didn’t take us long to decide that teaming up on a senior site might be a smart thing to do.
Should You Start a Partnership?
Embarking on a business partnership is a big step, full of potential—but also risk. Will the collaboration thrive, or will it falter? Will you and your partner share a clear vision and work seamlessly together, or will differences lead to conflict?
Like anyone starting a business, our thoughts were focused on launching the business and making it successful. But both of us had been in business on our own long enough to know that dreams don’t always work out.
And we also knew that, from a legal and tax standpoint, we wouldn’t be seen as two sole proprietors working on a project together. In the eyes of the law, we would be seen as a multi-owner business. So we needed to start out by formalizing our arrangement. We also needed to lay out ground rules for how we’d move forward and what would happen if things didn’t go as planned.
Here are some of the things we considered as we thought about forming a partnership, along with the steps we took to get things right from the very beginning. I believe our thought process and the steps we took to set things up properly will be helpful for others considering starting a business with a friend.
Benefits of a Partnership
The first thing we did was consider how we might benefit by joining forces. We quickly saw a number of important ways we could benefit by partnering up. Among them:
Lowered startup expenses
For us, a big benefit of working as partners was lower startup costs. When it comes to launching a content website, two big expenses are web development and content creation. Our combined skill sets let us avoid those costs. Sweat equity plus a small amount of cash to cover things like domain hosting, email marketing, and other services and maintenance-related costs were about all we needed to get started.
Shared Workload
This was another big benefit for both of us. Starting and running a business involves a lot of work—the kind of behind-the-scenes stuff that people don’t think about if they’ve never run a business. Sharing that workload gets things done more quickly and reduces the tasks and stress of doing it all on your own.
Accountability
Another huge benefit of having a partner is motivation and accountability.
When you’re thinking about starting a business on your own, it’s easy to put off doing time-consuming or difficult tasks. “Tomorrow” easily turns into next week or next month, or “when I get to it.”
But when you are working with a partner, you have someone other than yourself to help plan, set goals, discuss issues with, and keep you on track.
Support
Starting a business on your own can be a lonely endeavor. While there are organizations such as the Small Business Development Center or SCORE that offer free counseling and mentorship, as a solopreneur, you’re still pretty much on your own when it comes to mulling over day-to-day decisions and problems. In a partnership, you can turn to each other for support.
Different Perspectives
When you’re running a business on your own – especially if you don’t have any employees – the only perspective you have on all phases of your business is your own. You see the world (or more specifically your audience or customers) through your own eyes. That can affect the kind of content you produce, the products you offer, and even the audience you target.
Having a partner can help you see things through another set of eyes and someone else’s years of experience. It can help with business operations, marketing and more.
Having that additional perspective can help you broaden your reach, or maybe narrow it to a more specific niche. It can help with advertising and SEO, too. Do you carry luggage or suitcases to the airport? Buy slacks or pants?
Disadvantages of Partnerships
There are plenty of disadvantages of partnerships, too. Search the web, and you quickly get a list of problems like disagreements and conflict, shared responsibility for losses, and loss of autonomy. Before you start a partnership, talk to an attorney so you know the ramifications the choice can have for your business and your personal finances.
Besides the frequently cited disadvantages of partnership, we discovered some that no one really talks about. Actually, a better phrase than “disadvantages” for those things would be time-consuming annoyances.
Things like forming the business, getting the DBA, opening a bank account for a partnership, and setting up other necessary accounts to run an online business are all a bit more complicated for partnerships than for a business owned by one person. “Simple” things like control of the domain name, website hosting and other site accounts become less simple too when multiple people are involved in a business.
Putting the Ground Rules in Place
Both of us had been in business on our own long enough to be aware of problems that can arise in business. So knew we needed to agree on how we’d operate before we moved ahead with the project.
Here, for anyone who’s thinking of starting a business with a friend or an acquaintance, are the steps we took to get off to a good start.
Discussed Our Hopes, Goals, and Intentions
For a partnership to work, the partners need to have an honest discussion of their concept for the business. So, we talked about who (the audience) we both wanted to help and how we’d like to do that. We discussed how much time and money we each wanted to put into the business and get out of it. And we talked about potential revenue and timelines. And how we wanted to run the business from a legal standpoint.
Formalizing the Partnership
Once we had that discussion, we were pretty sure we could work well together. But “pretty sure” isn’t a way to run a business. So, we knew that we needed to formalize the agreement to protect each of our interests in case there should be problems in the future. We drew up a formal partnership agreement to document how the partnership would work, and what should be done if things didn’t work out.
In a partnership agreement, the sections on what to do if a partnership doesn’t work out are as important as all the sections on how the partnership is structured.
The reason is that it lets each partner know in advance exactly what to expect if the partnership breaks up. Knowing that reduces the possibility of ugly fights and lawsuits over who’s doing what, who should get how much money, or even what to do if a partner just stops being active, becomes incapacitated or dies.
Up and Running
Once we got the foundation of our new business partnership in place, we started the Waymoreliving.com and launched it recently. We’re adding content weekly. Check it out, and if you find it helpful to you, sign up for our newsletter and pass our URL along to any of your friends or family who could benefit from the site.