To partner, or not to partner.
I’ve been wanting to publish this one for the longest time. However, I chicken out from posting it every time because to me, it is very raw. It is the kind of detail we don’t talk about. But that’s just the thing: we should be sharing the good, bad and ugly of our entrepreneurial experiences. So here goes.
“A partner ship is a sinking ship.” He told me. I sat across my accountant at his dark brown, wooden desk. His tone was as dramatic as it sounds. I had just told him that I would be taking in a business partner in order to afford buying into the business venture of my dreams.
“It’s a no brainer”, I naively told him. My potential business partner was willing and able to fund the R200 000 I needed as a cash deposit for the business in exchange for his 25% shares. My part of the deal was to run the business 100% and to pay the additional amount monthly for a given few years making up my 75%. I was 25 and literally had nothing to my name to lose. I just knew I would make this work and come up with the monthly instalment. I completely ignored the fact that our current business partnership in an aesthetic clinic was in fact not working. I was doing my best to suppress my gut feeling that this was a very, very bad idea.
Debts were piling up as we made use of financing to do an extravagant revamp, at a ripe 25 years old I was struggling to manage the older crowed that rented from us. I felt as if I was doing all the work managing the business and booking clients we both benefited from. I, however did not express this to him. My attitude was one of “I’ve got this” and I was hell bent on showing him and others that I did.
This person was a Dr looking for opportunities within the beauty industry in the the form of advanced aesthetics. I allowed myself to be pressured into taking out a personal loan and an over draught. Read again. I allowed it, he not once placed an ultimatum across my path. I ignored my gut in an attempt to keep up with him. My reasoning was that his medical degree made him clever, business savvy and ethical. I was very wrong and very naive. We were both young, starting out and way to ambitious for our own good. The fact that he had a medical degree, did not necessarily qualify him to successfully run a business or to be a good, fair business partner.
The situation ended badly. I ended up walking out of the clinic with nothing other than legal fees in order to get out of a toxic situation. I had to take on additional financing in order to buy him out of the big business venture only three months in. As a result it took my new venture almost four years to show the kind of profitability I could benefit from and live off. In addition, He closed the clinic down without giving notice, since we had both signed surity on the lease, I was responsible for paying my share of the lease until tenants were found only eight months later. I continued working multiple jobs and business ventures in order to live while I licked my bruises and started over – with debt.
My misfortune was not only on him. He too lost from this partnership as I had not been open about how I felt or about what I was financially capable of.
Regardless of how things can be different in a partnership, because of my experience I now too sing that a partnership is a sinking ship. I personally will not be making use of a business partner anywhere in the near future. What I hope to gain from this post however is not to make you totally negative towards a business partner (ok, maybe a little) BUT to take in consideration what I did learn from my sinking partnership:
- Communication is everything. Even when its awkward.
- Follow your gut.
- Read the fine print and have an escape route for if things do go south.
- Stick your pride in your pocket. There is no place for egos in a partnership.
- Manage the expectations of both partners and how to meet them.
- Take accountability for your part in everything you do. Shake it off and move forward.
There you have it. I ripped the plaster off on this one and can only hope that sharing this brutal truth may have made an impact on you and a decision regarding a potentially toxic partnership. Do you have your own experience of a partnership? Share it with me.