Ask CJ: Good communication key to good partnership
Christine J. Davis
"Two heads are better than one." That's a phrase we have all heard when it comes to finding the solution to a problem. What about when it comes to owning and running a business? Are two heads better than one?
When it comes to starting or running a business, there are so many factors to consider that it can make your head spin. A successful business isn't just about having a needed product or service. It isn't just about having the ability to market and sell your product or service. Nor is it just about having the drive and temperament to be an entrepreneur. It's all those things and it might not just be you making those decisions. Many businesses are owned and managed by two or more individuals. This can be advantageous and successful if done right.
Not everyone has the ability or desire to own and operate a business without partners. Financial constraints alone can prevent someone from maintaining sole ownership of a company. Having one or more partners not only eases that burden, but it also opens up the business to having leadership that possesses a variety of talents and strengths. Matt Benson, a corporate attorney with Cook, Little, Rosenblatt & Manson of Manchester, cited these reasons as some of the major advantages of taking on partners in a business venture.
Benson shared a laundry list of considerations for those contemplating starting a business with one or more partners; however, what he kept coming back to was communication. "Free and open communication" is at the top of his list for a successful partnership. If you have good communication, you can avoid a lot of potential conflict. Benson also stressed the importance of having your basic business goals in alignment. Are you looking to create a lifestyle business or are you looking to grow with an eye toward selling the business? Do your goals, philosophies and business ethics match up? Are your individual strengths complementary, and is there respect for the value that each person brings to the table?
Not surprisingly, the comparison to a marriage was brought up and it makes sense. You will be spending a lot of time together and making decisions together that affect your personal and financial well-being. Open communication as you go through the good and the tough times together is critical. If you can't do that while maintaining mutual respect, you may be headed for divorce. Even a fantastic partnership eventually will come to an end (retirement, death, disability, etc.) and being prepared for an exit is essential. Having buyout documents with transfer restrictions decided upon before they are needed can avoid conflict not only between leadership but for their families as well.
I spoke with David Lahme and Sam Biddle, partners at Tradeport USA in Somersworth, to get their perspective. Lahme and Biddle went into business together almost 10 years ago and cited numerous reasons why a partnership has worked well for them. Combining funds and their complementary strengths were seen as highly instrumental in their success. Lahme said they have the same goals for the business, which is one of Benson's basic foundation pieces for a good partnership. Lahme also feels comfortable that he can be away from the business and know it will continue to run smoothly with Biddle at the helm.
Biddle shared his thoughts and added that trust is a key component to a successful partnership. Each partner has individual responsibilities, with Biddle handling operations while Lahme focuses on sales and financials. Biddle said he values having someone to bounce ideas off and admitted, "If I had to do everything, I wouldn't have a life."
Having a well thought out business plan and laying out the ground rules at the outset are also a part of Tradeport USA's continued success. Over the years, they have amended their LLC and are now adding a buy/sell agreement.
Not to be dismissed is having the support of a business partner. According to Lahme, "It is easier to jump off a crevasse with someone else." That certainly gives new meaning to the phrase, "till death do us part."
Christine J. Davis works for the N.H. Division of Economic Development as a resource specialist serving businesses in Rockingham and Strafford counties. Her role is to provide support for businesses so they can remain viable and growing entities in the community. She can be reached by e-mail at Christine.Davis@dred.state.nh.us Davis lives in Exeter with her two daughters. When not performing her work or parenting duties, she can be found volunteering with her girls for the Chamber Children's Fund, hitting the gym, or spending time with friends and family.
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