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Is a business partner a recipe for disaster?

Thinking about finding a local partner



2:07 am on Jun 26, 2005 (gmt 0)

10+ Year Member

I've got my hands full with several different online projects, on top of my day job. My day job is in an unrelated industry, one which I am not very interested in. Eventually I would like to drop the day job once (if) the other projects become profitable and stabilize.

As I said, I have my hands full with several projects. It just seems that I either lose interest in them before completion, or I get overwhelmed by them and they sit on the shelf uncompleted. The few that I do complete tend to sit there without any kind of promotion or link building, and thusly rot into nothing.

I've had a few different business partners over the years, but those relationships tended to erode rather quickly for a variety of reasons. Either one of us was doing all the work, or we would constantly clash over the direction of a project, etc. I've not even talked to another soul IRL about a project in almost two years.

My skills are focused more on the back end operations, and I know if I could find a partner with complimenting graphics and basic design skills we could make some exciting projects. I'm just afraid to put an ad in the local paper looking for a business partner because I'm afraid I'll end up regretting it.

Have any of you partnered up with a complete stranger who had a complimenting skillset? Did it work out? What problems have you run into? What kind of paperwork agreements did you make before you partnered up?


2:05 am on Jun 27, 2005 (gmt 0)

10+ Year Member

I have a couple of partnership operations going. One of them is a three-person partnership. I provide the basic design skills and business ideas, then "Dave" provides the business, legal, and accounting skills, and "Sheila" provides the backend programming.

This partnership started out initially between myself and "Dave". We've been good friends for a few years, seem to see things in the same way, and developed a strong trust in each other. With "Dave" being a business-minded person, and me with my ideas, we needed a third-person to provide the programming work.

We looked for someone who not only had programming skills, but also shared an interest in the same niche that this website was focusing on. We had to monitor several message boards, and it took about 18 months until we found someone that matched.

We approached "Sheila" with the idea, and she was open to it. We offered to pay all of the costs up until the website was able to earn more money than its recurring expenses. At which point, we split the profits three ways. The fact that "Sheila" was already well versed in this particular niche, helped because she could easily see that this website idea would work.

There was no paperwork, no written agreements, and no formal corporation formed. It was all based on trust. I think it worked out, because we offered to pay all the costs, up until the website became profitable. In addition, "Sheila" did not work on this full time, she did it on her spare time. Hence, there was very little risk for her.

Since then, this website has been running for three years, and it continues to provide us with an abundance of money each month. Even more, we designed it in such a way that it is 100% user-maintained. Hence, we just leave it alone, and let our users maintain it. We just sit back and count the money. This was also a key selling-point for "Sheila", because no way would she want to maintain this regularly.

So, I think those are some of the reasons why this partnership worked, without signatures and formalities, even though it took a long time to develop.

In terms of finding a business partner, I would suggest going to your town's Chamber of Commerce, and joining. Membership fees are usually $100 to $200 a year. Anyone can join, even non-business owners. Then, attend their monthly luncheons and mixers, and mingle with people. These meetings are filled with entrepreneurial types, eager to make some money.


2:25 am on Jun 27, 2005 (gmt 0)

10+ Year Member

It's very encouraging to hear about your success with such a setup. I've run into too many horror stories (including my own) about how these things can fail, but I guess it ultimately depends on who you partner up with.

Unfortunately I don't have any acquaintances with an interest in this type of thing. I considered hanging around one of the colleges in the area or putting up fliers, but I'm afraid I would run into a lot of "interested" people rather than serious people.

Joining the chamber of commerce sounds like a great idea -- I wasn't aware you could do so if you weren't at least a DBA. I'll definitely look into that.


11:41 am on Jun 28, 2005 (gmt 0)

WebmasterWorld Senior Member essex_boy is a WebmasterWorld Top Contributor of All Time 10+ Year Member

I wouldnt go into a partnership with any friends or relatives, itll end in tears.

Make sure you have it all worked on paper before you start though.


5:48 pm on Jun 28, 2005 (gmt 0)

10+ Year Member

yes... if you take on a partner... heed some advice, screw them over before they can you... partners are great until money gets involved... stick with associates--- just some advice


2:16 pm on Jul 20, 2005 (gmt 0)

10+ Year Member

My niece has a new business on the web and asked me to go in as a minor partner but I felt it wouldn't work with family. I agree keep family and business seperate.
But I have good business and organisation skills and a bit of design experience and the main thing money burning a hole in my pocket to back an idea.
I have a real entrepreneurial drive to be successful but have been banging my head against a wall for the past couple of years trying to come up with a business idea.
I have no idea how to tie up with people who no doubt are sitting there with a great idea but no money or clue how to go forward. There's an idea a site teaming people up!


11:33 pm on Jul 20, 2005 (gmt 0)

WebmasterWorld Administrator incredibill is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

I found subcontractors worked best for me.

If you can send someone a LOT of work they may be willing to give you a "wholesale" rate and you just mark up their labor to the client.

You need to have them sign and agreement to spell out the terms of what the subcontractors can and cannot do with your clients, particularly quoting additional work, prices, discussing the terms of your relationship with the client, or doing any work directly for your clients for up to 12 months after the severance of your relationship.


6:53 am on Jul 21, 2005 (gmt 0)

10+ Year Member

I suppose it all depends if you want a partner in the business to share skills and/or costs, Or you want to keep sole charge of the business yourself, in which case you subcontract the required work as above.


2:39 am on Jul 23, 2005 (gmt 0)

10+ Year Member

i still have it paining , when i hear or think of a partner again.

It is human to trust partners for their capabilities and performance issues, and to an extent, you can adjust and allow work slakness also, but till an extent.

I think its better to either have a 'project based partner' or a worker.

I dont think i am looking for a partner for my business in this life. it pains ...


3:08 am on Jul 23, 2005 (gmt 0)

WebmasterWorld Administrator rogerd is a WebmasterWorld Top Contributor of All Time 10+ Year Member

I've been involved in multiple ventures with a variety of partners, fellow owners, etc. Some have been great, some less so.

The key lesson I've learned is to never assume that a person will be a great partner based on pre-partnership discussions. I've had multiple situations where individuals had the right skill set and seeming willingness to work, but flamed out early in the game.

I'd avoid partnerships if possible, unless you are confident that the individual is bringing key skills to the table that you lack, and that they would make a good long-term partner. Even then, structure their ownership and compensation in a way that grants them their stake only as they achieve milestones. It really works...


5:57 am on Jul 23, 2005 (gmt 0)

10+ Year Member

i had been a partner with a great friend at one time, one of the closest friends i ever had, till date. a very talented young girl who was just too good at work.

one fine day - she decided to marry some nice guy , left the country .. and to hell with the partnership!

cool man....


6:25 am on Jul 23, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

I'd think you would be better off either hiring an associate or contracting the work. That leaves you free to decide the direction of your business. You could also also make it known that creativity would be rewarded. Now you have someone doing the work that needs to be done, and possibly providing input, while at the same time neither of you is really tied to the other.

<short story>
I met the fellow I work with at a local event, and at that time began selling him my own unique products. As time went on I was able to convince him that his current webmaster was falling short, so I migrated into that position. That was 2 years ago. Now I'm the full-time webmaster and my own unique products are no longer made or sold. I'm not a partner, nor am I an associate. I'm just a friend who happens to know a bit about computers, web sites (thanks to WW), and programming. He's the luckiest guy on the block, and I'm happy most of the time.
</short story>


8:57 pm on Jul 25, 2005 (gmt 0)

10+ Year Member

I have lived this lesson, and the only reason I donít regret it because Iíve learned from it.

What makes partnerships impossible is the ever-evolving nature of the people involved. All people change no matter who they are - friends, relatives, strangers, etc. Even if a partnership starts well, it is only a matter of time untilÖ.. ka-boom!

Just as you said:

It just seems that I either lose interest in them before completion, or I get overwhelmed by them and they sit on the shelf uncompleted.

Successful businesses are based on creative thought, execution, desire, and tremendous motivation. Those are all very powerful things that simply cannot co-exist across the plain of human interaction for any sustained period of time.

Iím sorry guys/girls. I think I just got a little mushy ;)


5:49 am on Jul 26, 2005 (gmt 0)

I agree with Grandpa, outsourcing is the next best thing you can do.


7:06 am on Aug 9, 2005 (gmt 0)

10+ Year Member

It has been experienced that too much time is spent to solve on partnership problems and structure, it diverts the focus from your business and overall dissolving partnership is also much expensive and emotionally painful.

It's better to make a distant relationship much stronger through "outsourcing" as Frost & Sullivan IT Consulting Analyst Jarad Carleton states ďOutsourcing is a continuous process where a conducive environment having a free-flow of information between the home office and offshore staff is critical to avoid cost overruns and project delays,".


11:49 am on Aug 9, 2005 (gmt 0)

10+ Year Member

I agree with what most people are saying, however:

- overseas outsourcing can be tricky if the person you're hiring does not fulfill time or development issues. They can 'disappear' easier than someone who is more local to you when you most need them and leave you in a tight situation.

- partnering with someone whom you may rely on heavily to provide for what you are lacking can also be tricky, as per human reasons above mentioned as well as professional; in the beginning they may also be heavily reliant on you, but depending which course the relationship and project takes, that dependency may change.

In saying that, if you do require other people to help you out on projects, take the risk but keep your eyes open.


3:42 am on Aug 10, 2005 (gmt 0)

WebmasterWorld Administrator webwork is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

Sounds like a good time to make some detailed lists, including lists of assumptions.


12:37 pm on Aug 10, 2005 (gmt 0)

10+ Year Member

outsourcing - stuck in one right now that's doing really well, but I do all the work. Not cool.

Agreed though that partners do give you an interest back in a stale project.

If you don't have the spending cash for the designer maybe sell a post-sandbox site or two. (I'd avoid work-for-trade of existing site as that doesn't seem to work either).


12:40 pm on Aug 11, 2005 (gmt 0)

10+ Year Member

Stender wrote: "I have no idea how to tie up with people who no doubt are sitting there with a great idea but no money or clue how to go forward. There's an idea a site teaming people up!"

Well there is a website already doing this. I guess I can't mention the name because I wouldn't wish to go against the Posting Guidelines, but if you simply type "business partners" into Google UK you'll have it come up at the top.


5:15 pm on Aug 21, 2005 (gmt 0)

10+ Year Member

I appreciate all the feedback on this thread. It is not often you hear stories about partnerships that you can really relate to. I have been in three partnerships over the past 5 years. Two stole cash from me (the business). And all three stole my development time!

I second those who say to outsource. Or hire into positions. I am growing my business as an individual. Second step is to gather a network of "helpers". Now I have (all are freelancers), 2 artists, 2 programmers, 1 photographer, 4 sales, and LOTS of advisors. Once I have the cash, I will hire into positions in areas that I lack expertise.

If you must partner, I would definately recommend what rogerd said: structure milestones and ownership/compensation based on that. Talk a good talk, doesn't mean walk a good walk. And you walk if they bok or miss deadlines.


3:05 am on Aug 25, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

Work backwards from the point where the partnership breaks up.


12:52 pm on Aug 25, 2005 (gmt 0)

10+ Year Member

It's better to try searching a distant partner and making the relationship much stronger on advance when you presume that partnership is going to break up in near future.


4:12 pm on Aug 29, 2005 (gmt 0)

10+ Year Member

read Rich Dad Poor Dad, E-myth by Michael Gerber .. or Rich Dad's Guide to Investing... this will give you some good tips on how to build ur business right...

my tip: partnerships rarely work.... the only time they work is if both partners can bring the same cash, same effort and level of intelligence to the table...

many times if you decide to go into a partnership you will feel like you are doing all/most of the work and meanwhile u are splitting profits 50/50.. The problem with partnership is trying to quantify how much each partner should get but that can get into a huge b$tch fight....


4:27 pm on Aug 29, 2005 (gmt 0)

10+ Year Member

i guess i am one of the lucky few...

i am in a partnership (3 people) for 5 years. We complement each other very well, one does the accounting/content writing, one does the technical stuff/(programming) and i read webmasterworld ;)

We never had a major problem in all those years, the weired thing is i never spoken to my partners on the phone once, never mind seeing them in person (both are in the states (one michigan one colorado) and i am from austria.

we communicate exclusively via messenger and our project management discussion forum...

...as i said maybe i am one of the lucky few



4:35 pm on Aug 29, 2005 (gmt 0)

10+ Year Member

wow i would go nuts... do you use skype at all?


4:49 pm on Aug 29, 2005 (gmt 0)

WebmasterWorld Senior Member jane_doe is a WebmasterWorld Top Contributor of All Time 10+ Year Member

I would agree not to have a partner, especially a friend. I tried this initially and it just didn't work out. Everyone but me is always so bossy I find other people all hard to work with. :)

I hire contractors now and it has worked out much better. I get to make all of the decisions and keep all of the profits.


5:00 pm on Aug 29, 2005 (gmt 0)

10+ Year Member

yep thats the way to go...


7:06 am on Sep 5, 2005 (gmt 0)

10+ Year Member

I'm just about to hire someone to help me (I've been working Saturdays and Sundays for months but I am still behind with work schedules because I'm tired). What all of you said has been of great help to me, but I've come to the conclusion that the perfect solution does not exist.
I have excellent relationship with my clients so I am not afraid that someone will 'steal' them. What confuses me though is organizing the work for the other person.
I am used to do everything by myslef: from meeting the customers to the coding and graphics and I am not doing any marketing: I've even let my site fall down in search engines' pages because I couldn't take more work.
I would appreciate if you had some suggestions regarding the first impact with the staff.
I've know this person for some years: she has come for a stage two years ago after taking a web design course where she hadn't learned anything (the program was awful), but she is clever and eager to learn.



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