WHEN A PARTNERSHIP SOURS

If you’re going to be an entrepreneur, chances are you’re going to form strategic collaborations with individuals who will become your business partners. No one wishes for anything else worse than a cohesive, mutually-beneficial business relationship, but no mature entrepreneur can avoid the possibility that even in the best of circumstances, regardless of what you do, or don’t, there will be disputes.

Better it is then to have a well-drafted partnership agreement in place, advises a senior in-house attorney and Lauric’s legal strategist- before the lack of one leads into uncharted waters, resulting in a free-for-all situation for all parties.

 

How then, if you’re in a tempest, the partnership’s heading toward certain disaster and you don’t have an agreement?

Evaluate, he advises. Evaluate what the differences really are and if they can be settled. Complex, sometimes obscure issues inevitably surface in all partnerships and will naturally create stress but if business partners evaluate the source of these conflicts and decide to work it out, a stronger partnership can be forged.

Don’t’ be afraid to ask yourselves the sensitive questions.
“What do I/we really want?”
“What is happening in this partnership that has resulted in this?”
“How are those matters affecting the business?”
“What is really happening?”

You might have an answer that points to family dynamics- an issue which has, he agrees, complications beyond the purpose of business itself. But if the issue is about having too much debt or that profit numbers aren’t high enough, or even realizing that your current business model doesn’t work, change the business plan. Adapt accordingly. There might not be a need to break the ship apart. Of course, if your partner is stealing from you or conducting illegal activities via your partnership, then terminate it, no questions asked.

So now both of you decide you’ll work it out. What then?

Check your own risk/reward tolerance level, the principal strategist suggests. “That’s what each partner should do. Assess the risks and rewards associated with your own business and do it frequently to make sure that they’re in check,” which means periodic assessments of your partnership, “especially the partnership agreement.” It also means frequent re-assessments and ongoing, honest communication between the partners. “It’s like any relationship. Over time both parties have to reassess their relationship, like how decisions are made, who makes the decisions, that sort of thing.”

But what about those who decide that they’ll break the ship after all?

What usually happens is either a partner buyout or a sellout to a third party. If a partner buyout is being discussed then it would be required to determine which of the partners has the most passion for the business. Alternately, a partner who is facing an immediate cash need will want to cash out of the business. Decisions will have to be made before a new agreement is drawn up.

“Find a good attorney,” the legal strategist emphasizes. Not your family friend or your uncle. You’ll need someone who is an expert in business law and a good one will help you to dissolute the partnership because by the time you reach this stage, the dominant question will be the actual valuation of the business and it is extremely crucial that both parties have their independent valuations or they agree (at least) on an independent business valuation expert to determine the value of the business.

Terminating a business partnership is never a champagne moment, the principal strategist admits, and more often than not, the collapse tends to haunt all parties throughout the rest of their business voyage, which is why he believes that however serious the issues are, however daunting the skirmishes are, if individuals protect themselves on the onset, they will be better prepared to resolve these issues through good communication and effective negotiation skills. 

MY BIGGEST MISTAKE WAS...

People are the best thing about business. But they can also be the worst, says emphatically the Principal Strategist of Lauric Strategy+ Marketing, who has come to work today in a bright blue polo tee-shirt and cream-colored slacks matched with Teva flip-flops.

He looks just like your average guy- in weekend wear, not the businessman and entrepreneur at the office the first day of the work week. Far from the typical image of a successful businessman he seems to be, yet, his personal ventures have grown to include companies located across continents and, in recent years, are seeing triple-digit growth.

To him, people are generally on two sides of the bell curve. They can either provide you with the greatest victories and profits but they can also cause you to suffer your biggest losses- and whilst he doesn’t go into detail what really transpired, he is candid about his entrepreneurial journey having had its fair share of mistakes- and some of the lowest moments of his business career were a result of him placing trust in the wrong person.

No industry, no one, is immune, he insists.

The media and entertainment company was making a directional transit towards content development and production which included substantial plans for motion-capture technology, then one of the newest technological developments in global media production. His research was thorough, he had met with representatives of the technology companies at a tech convention in Las Vegas and he even had the space mapped out for the equipment, now all he needed was a supplier.

There are many out there who will, with an arsenal of collaterals, material and impressive demonstrations portray the best of themselves to you. If you’re not listening carefully, if your company is at a phase eager for business development and you make a hasty decision, you just might find yourself paying for a very, very expensive lesson, and the cost of such a blunder is greater than the dollar factor. Even if you are convinced that such a cost is payment ‘for your business education with those mistakes’, it is, as he puts it, impractical advice for an entrepreneur.

Listen, he stresses, listen hard to those whom you intend to work with. Listen to candidates in the interview room. Listen to individuals whom you plan to form partnerships with. Listen to those whom you will invest in, and whom may be your prospective investors. Listen to everyone who will be a part of your business- and make it a strong attribute in your manner of business. Take the time to know those whom you are doing business with and be slower to act.

 

“Absorb as much information as you can.” He smiles. “Read, listen and learn as much as you can about what it is you will be doing. Information diminishes risk. You will be better equipped to make critical decisions.”



HOW TO CHOOSE A STRATEGY CONSULTANT: Separating the Wheat from the Chaff

There’s a saying that you get what you pay for. There’s also the often-too-late realization that sometimes you have ended up paying way more for what you really got. Making a decision to hire a strategy consultant sounds easy. But it’s important to make sure you choose a strategy consultant that is right for the job. Because whether they might be master builders, business coaches, advisors or futurists, the task of separating the wheat from the chaff rests on your shoulders. So, who’s the wheat, and who’s the chaff?

 

A strategy consultant is, basically, someone who works with business owners to devise and develop a strategy that is capable of achieving the stated goals of the business. And here lies the tricky part. How do you define what capability really is? How do you know whether he or she has the expertise for what your business needs at this very juncture?

Five penetrating questions are sufficient to provide a general guideline for you to assess the consultant.

1. What is the real specialization of the consultant?
2. Has the consultant walked in your shoes- or is at least willing to try?
3. Does the consultant have a solution-focused mentality?
4. Are the solutions the consultant suggests pragmatic ones?
5. Does the consultant prove his ability to adapt?

Not everyone who calls themselves a business coach is truly able to coach you on the intricacies of running a business, in the same way that not every consultant who replicates a generalized marketing strategy to you has a proven specialization in the very industry of your business. Yet that is a catalytic element. Success requires a business strategy that has been tailored to meet the nuances of your industry, your marketplace and your business itself. A consultant needs to be a specialist in your industry, whether retail, technology, food, logistics, manufacturing, property or media & entertainment, to capitalize on his experience and firsthand knowledge about the unique challenges you face to bring maximum value to your business.

 

Better yet, if he has been in your shoes- and has walked in it. The best consultants are those who, firstly, can define what their business is and who they are. Someone who describes herself to have multiple professional interests and is at once a business coach, a consultant, a researcher and a futurist is way too much of a generalist to engage in your business. If your consultant has had personal experience what it means to build a business, to drive change and implement strategy and if he has direct knowledge of the real-world competitors, obstacles, opportunities and challenges your industry faces, you will likely receive practical recommendations for business success.

 

The consultant might not be Leonardo Da Vinci or Nikola Tesla- scientists passionate about finding and creating solutions to the real-world problems of their day and also futurists- but he has to formulate effective strategies that address your barriers to growth. Qualitative and quantitative analysis provide a critical depth of understanding of your industry but the consultant would have to be assessed on his skills in creating solutions for your business challenges. Merely obsessing about being able to charge you sizeable consultancy rates for telephone conversations does not take into consideration the fact that the solution to business meetings lies beyond a telephone or a mobile but includes global conferencing, video conferencing, emails, mobile chat platforms and it too disregards the information that the prospective client owns a tablet, a high-speed data connection and Skype.

 

Of course, solutions are of no use either if it lacks pragmatism. A suggested solution that appears to wish you well in your business but then is discovered to be impractical in its implementation to solve your business’ challenges and obstacles will mean that you have unfortunately paid good money for chaff.

 

That is why good consultants are present throughout the implementation process. Because good consultants who have firsthand knowledge, who have walked in your shoes and who are passionate about finding and creating solutions are convinced that with every business lies a situation that contains distinctive opportunities and what was successful for a similar client might need to be adapted in order to be appropriate for you.

 

There’s just one more thing that differentiates a good strategy consultant from a mediocre one. A good one is not illogically defensive and he will adopt a scientific, non-theoretical approach towards every predicament, which means that there is a continuous stream of cold, calculative self-assessment towards the very solutions that he will be presenting to you.