Partnership advice from small business owners

There are many factors that must be considered when operating a business with others. We asked some of our clients to share their partnership advice for small business entrepreneurs who are considering business co-ownership. Here’s what they had to say!

Jane Lin of Urban Field Studio

Jane and her business partners provide a full range of urban design services, including strategy, design, conceptual architecture, and urban design education and communications.

Why did you decide to go into business with other people?

Two or three is better than one! It is good to share responsibility. You can do more as a team. And, it makes life outside of the business more flexible, since we can cover each other when we go on vacation.

What do you love about owning a business with others?

I really like collaborating with my partners. I learn a lot from them. They are not just business partners but mentors. I feel that I contribute to something bigger than just myself when I work as a team. We all contribute energy, knowledge, encouragement, skill, support, and friendship to each other.

What is most challenging about co-owning a business?

Distributing responsibilities is a challenge that requires daily tending. But, that’s what running a business is all about!

How do you deal with this challenge?

TALK. Say exactly what you feel and state what you want. For tougher moments it’s good to have a third partner who can hear you both out. And, when you don’t get your way, have a good attitude about getting what you desire next time and understanding that it’s for the long haul.

What advice would you give to entrepreneurs considering a business partnership?

Think of your potential business partner like a travel partner. Use a similar filter as the one you apply when you are choosing a travel buddy. This is a long journey. You are going to get lost. Can you handle being stuck somewhere with this person? Will they help you figure out what you’re going to do next? Will you choose the same path forward?

Write a partnership agreement. The biggest deal of all is the partnership agreement. It’s like wedding vows and a pre-nup (but not as romantic). The value of your business is maintaining a strong relationship between you and your partner every day. If that is strong, your relationship with your customers will also be strong.

What do you wish you had done differently?

There is not that much I would do differently, but I do need to remind myself to give props to my partners as much as possible. I want to practice gratefulness in what they do everyday. And, I want to make sure we are connected as much as reasonable.

Shamita Dhar of Coyote Coast Youth & Family Counseling

Shamita and her business partners co-own a counseling business that provides therapeutic support services to teens and families experiencing emotional, behavioral and substance-related difficulties.

Why did you decide to go into business with other people?

Being a part of a team is extremely rewarding. We each have important strengths, which compliment one another and support a balanced approach when making important business decisions.

What do you love about owning a business with others?

I like the security of knowing that if one of us is having an off day, there are two others dotting “I”s and crossing “T”s. Building a business is filled with opportunities for both successes and failures. It certainly feels better experiencing either case when one is not alone.

What is most challenging about co-owning a business?

It is inevitable that tension will build when one or more partners fails to pull their weight or during periods when a partner experiences a crisis of confidence or some ambivalence about the work.

How do you deal with these challenges?

With solid agreements, direct communication and healthy boundaries—without these, we can end up feeling misused and mistreated. Fairness is essential for a working partnership.

What advice would you give to entrepreneurs considering a business partnership?

Talk through every possibility and establish a solid partnership agreement, no matter how close you may be. In fact, the closer you are, it is even more imperative to outline clear and specific agreements about how to work within the partnership and exit the partnership.

Deborah Bowes of Feldenkrais Center for Movement Awareness

Deborah co-owns the longest established Feldenkrais Center in the Bay Area offering individual sessions, classes and related wellness services.

Deborah’s partnership advice for other small business owners:

Make a plan. It is important to plan for the changes that the future inevitably brings. Not only to decide what will happen, but design a process for working through change.

Communicate openly. Good communication skills are essential, as well as being able to have difficult conversations and still be friends, and work through different goals and values. There will be times when you want to go in a different direction than your partner. If you want the business to grow and develop, you have to accept the difference and see how you can make it work for everyone. Then you can be happy to be in business.

Trust is essential. You have to trust each other; you must trust that your partner will be honest, and fair. You may not be best friends but you both must consider each other’s needs and want the best outcome for both of you.

Are you thinking about going into business with someone else? Check out these three important steps when considering a business partnership or joint venture. If you currently co-own a business, what partnership advice have you received that has made a difference? What words of wisdom would you want to share with others about business co-ownership?

Business Exit… have you thought about it?

Many tech entrepreneurs think about their business exit from day one. Acquisition is central to their business model. But most small business owners don’t think about it… they are too busy getting into business! An exit plan should be a part of every entrepreneur’s business planning process — though this is the least understood part of the business plan, and often ignored.

Don’t wait. Think about a business exit now.

No matter how successful you are in business and how much you love our work, you should think about what will happen to your business when you no longer actively manage or run it. At some point down the road—a couple of years or decades from now—you will leave your businesses (or your businesses will leave you). Personal circumstances might change or burn-out could happen. You may be ready to pursue a new endeavor or want to retire. Or someone could approach you about buying your business.

Business exit options

You may not be able to predict your business’ success, your future interests, or the direction of the marketplace. But you can start thinking about the business exit options that could be a good fit for you.

There are a variety of ways to exit your business. You could pass it to a family member, partner, employee or other business stakeholder. You could sell it to an outsider. You could liquidate it and sell the assets, or you could file for bankruptcy.

How will you figure out what is best for you and your business?

Envisioning the future

We encourage you to think about the future of your business and what it might look like when you are not at the helm.

Is your goal to create a legacy business that will last forever?
Do you ultimately want to pass the business on to a family member?
When you are ready to stop running the business, do you hope to sell it?
Would you want the business taken over by an employee(s), partner or other internal stakeholder or would you want to sell to an outside party?

The vision for your business will change as your business develops and circumstances change, but thinking about your business’ trajectory, including your exit, is a key part of strategic planning and business growth. (If you are in a business partnership, it is important that you have an ownership agreement, from the beginning, that spells out what will happen if one or more partners wants to exit the business.)

Planning your transition

When you are ready to think seriously about transitioning away from your business, you need a business exit plan. Just as a good business plan is an important part of business start-up, a good exit plan is key to a smooth transition away from the business.

We help our clients through the transition planning process. This includes identifying or clarifying your motivations and goals, assessing the current strengths and weaknesses of the business, and creating a role transition or business sale timeline with clear benchmarks. We then help business owners stay accountable to their plan.

Our goal is to help small business owners feel ready for their next steps, with a feasible and straightforward plan to guide them through their transition. Learn more about our ownership transition consulting services.

Taking Action

At Paul Terry & Associates we help small business owners build successful and sustainable enterprises. Our consulting process is focused on clear assessments, careful advice and taking action. Central to our approach is business action planning.

Your passion and a strong vision for your enterprise launched you into small business ownership but a great idea alone won’t make you a successful business owner. You must turn your initial ideas into realistic goals with a specific plan for action.

Whether you are an emerging entrepreneur or an experienced business owner entrenched in the complexities of running a business, business action planning can help you identify measurable goals and create specific steps to reach your desired outcomes.

Every area of your business – customer/client relations, marketing and sales, business operations, ownership expansion, and your eventual exit from the business – can benefit from action planning. So how do you begin?

DEFINE YOUR GOAL

Put it in writing. Writing down exactly where you are today and where you want to be in the future will force you to think concretely. Taking the time to write down your goals may spark some new ideas, too.

Be S.M.A.R.T. – that is, specific, measurable, achievable, realistic and timely/time-bound. You need to be able to clearly state what you want to achieve and your goal needs to be concrete and doable. Initially, steer clear of goals that might take you three to five years to achieve. Once you get comfortable with the action planning process, you can use it to tackle bigger, longer-term goals. For now, stay focused on something you can attain within a year’s time, or even less.

SET YOUR ACTION STEPS

Take it one step at a time. You are much more likely to attain your goal when you identify specific steps to reach it. Each step needs a realistic deadline and an estimate of how much it will cost you—not just in dollars but in your time and other resources.

GET SUPPORT

Everyone needs someone to lean on. Trusted advisors and people in your business support network are essential during this process. They can be a sounding board while you create your plan and they can keep you accountable once you have a plan… every step of the way.

USE YOUR PLAN

Long and pretty it ain’t. A business action plan isn’t a fancy document—it’s a usable one. It needs to be accessible and referred to frequently. It might help to set reminders on your calendar to review it so that you can stay on track and make adjustments if necessary.

Still feeling daunted by action planning? We support clients through the action planning process every day –helping them create goals relevant to their current stage of business, identify specific action steps, and stay on track. How can we help you?

Step in, step up, step out: learning to lead

In the first years of life we learn to roll over and then crawl, we learn to toddle and then walk, and we learn to mumble, repeat sounds and then talk. We develop new skills by watching, listening and practicing, by falling down and getting up… over and over. As we grow, we build our strength, self-confidence, skills and understanding about other people and ourselves.

Becoming the leader of a business can be a similar process. We step into the role (sometimes before we are ready) and we step up to the opportunity (even if we stumble along the way). Finally, we learn to step out of day-to-day management and into a leadership role. We develop the personal perspective and skills to take our businesses to the next level.

TIMING IS EVERYTHING
Your business will have different needs at different times. As a new start-up or a home-based business, you need to figure out what you are doing, convince others to buy from you, and close the sale. As you expand, you can go after more clients and customers and adjust your services and products to fit the market. As your businesses matures, you as the owner need to mature as well. You need to know when it is time to step away from the day-to-day running of the business and bring in additional support. This becomes a leadership opportunity.

LETTING GO
Giving up control over certain aspects of your business is one of the hardest things to do as a business owner. Yet it is essential if you want to grow your business. To be successful, your time needs to be spent on the future of your business, not just the day-to-day needs.

GETTING READY
But how do you recognize the gaps that you need to fill? How to define the complexity of your business and bring your business skills into alignment? How do you know you are ready to hire people and train them to operate the business the way that you have proven is successful?

As a small businesses owner, you may be forced to make quick decisions, reacting to opportunities as they appear instead of strategically setting your course. And, you may have to make things up as you go along, essentially “building the plane as you fly it”. Yet when it comes to hiring people, good preparation is key. It is critical to to first ask yourself why you need help, what type of person or skill set is best suited for the job, and how you will train, direct and assess new hires so that you can incorporate them smoothly into your business.

JUMPING IN
Here are six important tips to consider when planning to hire employees and step into a position of leadership.

1. Understand the financial impact
Before jumping into a hiring process, you need to be able to afford it. Financial costs and revenues forecasting comes first. Hiring the right person comes second.

2. Look for people who complement your skill sets
It is important to hire people who can do the type of work that is important to the business but that you don’t do well. Do you struggle to track your expenditures or manage your budget? Bring in someone with strong money management skills. Do you love making the product but shy away from reaching out to potential customers? Hire someone with great people skills and a sales or marketing background.

3. Spend time on training and then get out of the way
You might be eager to get a new person working as soon as possible but it’s important to put energy into training so the new hire not only understands how to do things the right way but also understands why it’s important to do them that way. Once a new person is trained, it’s time to get out of the way. The business is your “baby” and you may have been responsible for all tasks until now. But the only way a new hire can be motivated, loyal to the business and successful, is if you let him or her own some of the work, too.

4. Set the right tone and others will follow
You, as the owner, set the business culture. If you are motivated and happy in your role, if you are transparent, open, consistent and fair, then others will follow your lead. As the owner, you must be a good communicator and in particular, you must communicate your vision and goals with the people who work for you. Without clear business goals, it’s easy for everyone to get lost in the details and lose sight of the big picture. You all need to be on the same page.

5. Continually take the pulse of your team
A good leader takes time to give clear directions, solicit feedback and listen to suggestions. By scheduling regular check-ins, team meetings and performance reviews with your employees, you create a productive space for communicating goals, addressing concerns and answering questions. Your employees can then feel confident that they know what is expected of them, and you can feel free to give them the space they need to do their jobs well. How you communicate with your employees (and how your employees communicate with each other) makes all the difference!

6. Get help through the process
You don’t have to figure it all out on your own. We help small business clients all the time to assess their needs, make the right hires, create training programs to build strong teams, and implement better management systems. Your support network of advisers and other small business owners can be a guide or sounding board as you develop leadership skills and systems for better management.

It is important to invest time, money and attention in your people. They are key to your business success!

Planning for Business Success

Many people start small businesses and many seem to fail. Risks always exist in business.

You can reduce those risks if you set aside time to plan in advance. This means defining your business offerings, doing specific market research, recognizing the essential management skills you need, and projecting realistic financial expectations… in short, you can reduce risks when you write and use a business plan.

Small business owners often say they don’t have time to write a business plan. There is too much to do and they want to get on with running the business. (Or, they may be intimidated by the planning process or simply be procrastinating.)

It’s true that some small businesses start without planning and do very well. However, once a business is launched and things get complicated, it can be confusing to figure out next steps. A good business plan helps sort out your options and can help you focus.

Business experts disagree about the importance of writing a business plan. Though some research has found that writing a plan greatly increases the chances that a person actually goes into business, there are business school professors out there, like Steve Blank, who say that real entrepreneurs don’t write business plans.

Although it may not sound like it, I actually agree with Blank’s approach. In his Lean LaunchPad classes, he’s pushing students to constantly talk to people and test their theories as they plan. A hands-on, real world approach is central to how I teach entrepreneurship, too. You cannot write a business plan in a vacuum and expect it to serve you well. You must get out there, connect with people, and constantly test your assumptions.

Writing, implementing and maintaining a business plan is hard work. Planning means learning to take the pulse of your business — over and over again. You have to be open to new ideas and be willing to learn from your mistakes. There is a reward for all that hard work, though. You end up with an operational management tool, a marketing plan, financial projections, and a means of communicating your business to others.

The primary purpose for writing a plan, though, is for the process itself. It forces you to be objective and critical, identifying weaknesses, challenges and opportunities and setting benchmarks to track progress. Doing research, talking to people, and analyzing your operation will give you confidence to continue with the business.

It’s really important that the plan reflects your unique owner perspective. The plan is a foundation from which each owner’s business judgment, personal feelings and intuition are measured. You should write it in such a way that you can use it, in a format that is easy to update. To be truly useful, a business plan should be a dynamic document — current, accessible and appropriate for the business. Don’t spend a lot of time making a pretty document unless a formal plan is needed to present to a bank or other investor. It doesn’t have to be perfect looking; the key is that it is useful for you and your business.

A business plan doesn’t guarantee success but it can help prevent serious mistakes. It is a great way to stay attentive to the important details of your business, to industry trends and competitors, and to new directions and business growth. A good business plan will help you maintain profitability, acknowledge and minimize potential risks, and develop confidence for future opportunities.

So how do you find the time to write a business plan? As Tim Berry says, “You don’t. You are always planning. Your plan is never done but your planning process is your key to good management.”

So, write that plan (or revisit your old one). It will be well worth your effort!

Yoga and Small Business Week

May 20, 2013
Entrepreneurship Training, Events & Community
PTA
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It was San Francisco Small Business Week this past week and the city was full of entrepreneurial energy.

With Renaissance’s Lisa Kirvin at Flavors of San Francisco

At the kick-off celebration, Flavors of San Francisco, last Monday the Cityview Room of the Metreon was filled with great food from over 30 San Francisco restaurants and catering companies. The room was packed with small business owners and supporters. I got a chance to connect and catch up with Mark Quinn from SBA, Gwen Kaplan of Ace Mailing, PTA Associates Ken Stram and Monika Hudson, and Lisa Kirvin from Renaissance Entrepreneurship Center.

On Wednesday, as part of the Small Business Conference at San Francisco State, I gave a workshop on Business Planning 101+ to a crowd of about 100 people. Things got off to a rocky start. (There always has to be a tech problem, right?) The PowerPoint presentation wouldn’t work so I got everyone on their feet for a little yoga… and a chance to get to know each other. Then, with a some help from the SBW tech staff and Renaissance’s Executive Director Sharon Miller, we got back on track.

Back on track after technical difficulties

I focused my talk on the basics of business planning and eight critical success factors for a small business launch (more on that soon). I also shared student stories from Renaissance Entrepreneurship Center’s 14-week business planning class, including Neil Gottlieb of Three Twins Ice Cream, Judi Henderson-Townsend of Mannequin Madness, Zel Anders of Tomboy Tailors and Lori Shannon of See Jane Run.

The room was full of people with small business ideas eager to take their business concepts to the next level. It was fun to share stories and help motivate them to take the leap of faith into small business ownership. The point is to s-t-r-e-t-c-h, focus, and make it happen!

Do you have what it takes?

A display of pies from new business Desperation Bakehouse

Do you have what it takes to start your own small business? There are so many things to address when thinking about starting a business for the first time. You will be your own most important and first employee, so an objective analysis of your strengths and weaknesses is essential.

Are you someone who:
…can launch something on your own?
…is a self-starter and takes initiative?
…can make good decisions when there are many options?
…has the necessary physical and emotional stamina to be self-employed?
…can plan and organize new and existing information well?
…has a positive attitude and a passion for being in business?
…has good support from family and friends?

Do you have a business or business idea that you want to develop?
Do you know what business you want to start? Do you know how to assess whether or not an idea is viable for you and the marketplace?

The best business for you is going to be the business where you have:
…a strong passion and a sustaining interest in the product or service.
…some of the skills needed to provide the service or build the product.
…some previous and related work experience.
…researched the potential for this type of enterprise.
…worked for someone who is doing something similar to what you would like to provide.
…some understanding of what the customer or client expects from this type of business.
…confidence that this product or service is wanted or needed in the marketplace and can attract clients/customers.

Not all of the above conditions need to be in place before you start exploring self-employment. But these are issues that will be key for long-term success!

Radical Aging – One Step at a Time

July 25, 2011
Profiles
PTA
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We are all aging…some with grace and patience and others without notice, care or attention. It seems like everyone I know, I see at the “gym” or out and exercising in some way. The streets in SF are full of bicyclists (another story later); there are runners all over Potrero Hill (our hood); the exercise equipment is in full use and diets and focus on healthy band local foods is prolific (See last blog re eating locally).

My dear friend, John of 30+ years really believes in radical aging and exercise. He is 70 and has been doing this since I met him years ago in Vancouver. He is someone who is on a mission to prove a point. To age and age well, we must be a radical in what we do; in how we live and most specifically, how we plan and exercise. I plan to go to a movie in about 2-3 hours or perhaps look ahead for one month and buy theater tickets. John and his hiking buddy Brian spend weeks together and plan for months to look for glaciers to cross, mountains to conquer and/or trails to hike, backpack and conquer – for days and weeks at a time.

John is now on an amazing journey. He is biking from Whitehorse in the Yukon to Victoria in British Columbia – solo. The journey is 2350 kilometers or about 1800 miles. He is alone without a support truck or cell phone. He is on this journey for the personal challenge and to raise money for Parkinson’s research. (If you want to know more about his journey check out his Facebook page updated by his daughter every 2-3 days when he finds a pay phone and calls in with an update – after 100 miles riding per day.)

So how are we doing? Do we age with grace and attention to detail or only notice our bodies when we are sick? Do we quit bad habits when the “hacking” gets to us or because it is essential we exercise to live well…now while we can? An old Buddhist saying comes to mind: when sitting, just sit; when walking, just walk. Above all, do not wobble”.

Can we take action for ourselves and our businesses? Are we better managers and owners if we plan and take action? Can we set up systems, support groups or get consulting help when we need to take action. I hope your next steps are solid and well placed. If there is a radical step to take in your near future, plan well, create systems to support yourself and then go for it. Don’t forget to call in and if you need help, ask for it. Habits are formed one step at a time…Here we go…take that first step. The next one is so much easier. Radical – one step at a time! Not THAT hard…right? So, when you are walking or running, just do that and see what happens.