Partnering A Deal – Why And Why Not
Why would you go in with somebody on a deal? One obvious reason, you don't have enough money by yourself, or you don't have a good enough vehicle to see your money grow the way you want it to… but there’s much more than that. All of us have in one sense or another the capacity to do something by ourselves. If you partner, what you’re choosing to do is join forces to make something happen which wouldn't happen by yourself, or wouldn't happen easily by yourself.
So you partner…
√ To share the risk.
√ To pool your resources, strengths, contacts, experience and perspectives
with someone else.
√ To capitalize on the effect of synergy, when the whole really is bigger
than the sum of the parts.
√ Often two heads together are better than one.
√ To share the work.
√ To capitalize on your strength and those of your partner or partners.
Perhaps one partner is more comfortable, or more adept, at taking the
active or operating partner role, while the other is better in a more passive
position. You can combine your complementary needs and attributes. If
two of you both do the same thing, it’s probably not a good partnership
fit. You have nothing to offer each other except one-upmanship,
competition, or knowing that either one of you could do it yourself.
√ To maximize the outcome while minimizing time spent. This may mean
you are able to accomplish more individual projects or deals as a result of
partnering. To build future relationships. Perhaps one of the reasons for
partnering on a small deal is so that when something larger comes along
you've already set up the mechanism to be able to participate. It’s
networking for long-term results.
√ To ally yourself in a venture with someone who has had more experience,
or has more expertise, so it is an educational experience for you.
Remember, there are no perfect answers. I did know a couple of ladies as a matter of fact who partnered on renovating a home just because they wanted a play toy and they had a lot of money. So they partnered for an adventure. People can partner for many different reasons.
But, is partnering a good idea? You may have heard horror stories. Why not partner with someone? What are the benefits of not partnering?
√ To keep a bigger percentage of the profit.
√ To remain in control of all of the decision making.
√ To avoid the added time and pressure of managing a relationship as well
as the project.
Personality conflicts do occur.
To avoid conflict, you may want to avoid getting sucked into other people’s problems, both legal and financial.
To keep it simple. Simple is always good, and all of us know that sometimes it is hard to work with other people.
The main reason you do partner with someone is to make things happen that couldn't happen without the partnership. You've decided to take the risk in order to do something more, or better, or different, so you'll need to structure it to get the rewards you think you deserve.
The Right Perspective For Partnering - Chapter C