PARTNERSHIP

This week, we are going to look at a topic that is very contentious among most people in business: Partnership. We shall look at Partnership as a way of starting a business or raising finance for one.

Most time people have great business ideas, but they don’t have the necessary capital to transform these ideas into a business venture. And because of this, the person who is so exuberant and passionate about the idea he wants to bring to reality is always quick to jump into partnership with anyone around who offers financial help with the hope that they will work things out later.

Going by records, partnership is one dangerous form of business to just jump into. There are many sad stories that people who have blindly gone into it can tell, and the causes of most of these tales of woes are issues that can be easily avoided.

The first question to ask is ‘is it even scriptural to go into partnership?’ People are usually on the quick to say that the Bible says ‘we should not be unequally yoked with unbelievers’. But note that the Bible does not say we should not be yoked at all with people.

This means that when you decide that you are entering a business partnership with someone, the kind of considerations you take into cognizance before going into a marriage partnership are the same considerations you will need to note before going into the partnership. This is because, in a legal sense, the two of you in the partnership have become one with equal responsibility for your individual actions. This means that if your partner takes an action in the name of the partnership, he is acting on your behalf as well.

ISSUES IN PARTNERSHIP

The problem these days is that many people jump into partnership with unequal footing. Granted that you are the one with the idea, and the other person the one with the money, in that instance who has controlling power?

Here are some issues you need to resolve before going into partnership with anybody:

1. Under what terms or condition do you come together?
2. Who is in charge of management?
3. Who takes decisions?
4. What are the processes for taking decisions?
5. Can the financial partner come in and dictate terms?
6. Can you employ your relatives? Can you employ yours or his wife? Can he just bring a cousin who has been out of job for a while and dump him or her on you for employment?
7. If he dies, what happens to his part in the business?
8. If, while starting the partnership you both were singles, then you both get married and become one with your wives, how does that affect your relationship?
9. Will you, as a managing partner, earn the kind of salary you would have given to an outsider if you were to employ him to run the business?
10. What are the values you both are bringing to the table?
11. How much interference are you going to allow?

These are some of the unresolved issues that have wrecked havocs in partnership relationships. Yet, you may discover that there are things you want to do, but which you are not able to do all by yourself. There is value in other people being added to you.

Remember we talked about the safety that exists in counsel; it’s the same thing with partnership. There are values that different people with different skills can bring to the table. But most times, we don’t bother to do the due diligence of taking care of all the details that can become contentious in future before we jump into a venture.

What are the core values on which the partnership will be based? If you are both Christians, are you going to agree to use the business for evangelism or not? What are you going to do with your resources? Are you going to pay tithe? Are you going to give to the work of God? If both of you go to different churches, whose church will you pay tithe to? How much would you sow into one church as opposed to the other? What’s the maximum seed you can sow from the business in any given calendar year?

What kind of teachings are you going to adopt in running the business? Are you willing to be accountable to each other or choose an outsider as an arbitrator between the two of you, so that if there is any issue you go to the person you have both appointed to arbitrate? Will the person be your pastor or his pastor? Whose relative, his or yours?

These are some of the things you need to discuss and resolve together. Let me share with you the words of Harvey Firestone of Firestone Tires, he says:

If the organizers of a corporation cannot agree at the beginning, there is small chance that they will afterward.

A lot of us tend to say that we will solve the problem as we go along. No. Things usually get more complex when money starts flowing in. It easier to ask every question, every thought, and anything that crosses your mind and be open with each other when you are still at level zero. So deal with every area contention as they come now.

The fact that someone has the money and you the skill does not make you a lesser partner in the business. Most people tend to trade off their skills for the person who has the money by making him a higher partner. Then they later despise him when they realize that they are the ones doing most of the work.

It is important to note that while the skilled partner is the operator who does the work, without the money of the financial partner, the work cannot be done. Therefore, it is necessary that you respect one another and value what each of you is bringing to the table.

Now to the person who has the money, if you are about to go into a partnership with any person, never take advantage of him because he has no money. He is down because he has the skill and desire to bring something to pass, but which he doesn’t have the money to do, and in most cases, most people who have the skills are willing to lick your boot just to get the money to go ahead with it. But a year later, when the business is running smoothly, they look back and begin to feel cheated.

The financial partner will be in the right in such cases because they both agreed to the terms of the partnership, but in your own interest, you should be fair in all situations. You need your partner to always be in a positive state of mind, so that he can give his best to the business. The point is, if he is not happy and he is able to make enough money from it, he can pull out and go to start all over on his own, and if he is good enough, he will succeed again.

I remember a business friend of mine, who was into window blinds. He had a good business going, and could have waited a little longer to re-invest the profit from the business to make it grow. Alternatively, he could have gone to any of the banks to obtain a short-term facility to build the business, but there was a man who had a lot of money and who offered to buy into the business by giving him the financial resources he needed. Guess what he did…?

See you next week.

QUESTION & ANSWER

QUESTION 1: I listened to you speak on partnership, but I want to know how I can practically apply these principles?

ANSWER: Partnership is a very practical issue. Before venturing into it as a means of business, you need to take some practical approaches.

First, if you decide to do a particular business and you find a partner you will like to work with, it is important that you go through every process of identifying all the details. Set a time aside for yourself; write out both your short-term and long-term vision for the business. Write out all your expectations as well as all other issues to be covered in the partnership; the way you want the relationship to be between you and your partner, write them all out on your own independent of your partner.

Then tell your partner to do the same. Let him make a list of all the issues that are important to him: the things he would like to incorporate into the business, the basis of your relationship, etc. Then take time to run through every item that is listed in each person’s blueprint one at a time, when you finish with that, you will discover that you have some things in common, otherwise you have no basis for the partnership in the first place.

As a result of this you will find out that there are things your partner desires that are not important to you, and that there are things you desire that are not important to your partner, discuss all of these and don’t consider any of them unimportant. For every point of disagreement on yours and his side come to an agreement that is acceptable to both of you. Write it in your memorandum of agreement; get an arbitrator to witness it, and that becomes the document that will form the basis of your partnership.

Having defined a lot of things at the beginning, you will find out that it’s a lot easier to run together. Don’t be embarrassed about anything, don’t try to impress your partner, ask the most stupid questions. It is always easier to deal with all issues at the beginning. Consider all the parties that may be involved around you and the kind of influence they may have on your relationship. Think about every imaginable thing, and at the end of the day come to an agreement. Good luck.

QUESTION 2: Are there any spiritual implications for pulling out of a Partnership?

ANSWER: While I liken business partnership to a marital partnership, there are spiritual implications for pulling out of a marriage, because the Bible does not encourage divorce. But the Bible does not mention any predetermined method of exiting a marriage. However, in your terms of agreement in partnership, you can decide in advance the situation that may necessitate one party pulling out of the partnership. There is no spiritual implication to it.

The Bible says you should not be unequally yoked, which means that the only requirement for going into a partnership is to ensure that both of you are of like faith, so that your considerations will be similar. That is why the Bible talks about unequal yoke. It’s talking about spiritual yoking. But if you then decide to separate from a partnership, as long as you’ve fulfilled all the legal issues and you are at peace with one another you can pull out of the partnership.

Question 3: My financial partner who has a 60% shares in our venture always insists on having his way in major issues that affect the operations of the company. Though I am the operating manager because of my technical skills, my partner, who is a domineering man, always interferes in the affairs of the company. He wants us to employ his candidates and do some other things his own way. Do you advise me to pull out of this partnership, or do I stay put and begin to exercise my authority the more?

ANSWER: This is one of the problems you face when you did not detail the terms of your relationship at the beginning, issues like who to employ or who not to employ. What you need at this point is not to quit but to have an honest and open conversation with your partner. It seems to me that you’ve never even voiced out your feelings to him yet. Sit him down and make him realize your contributions and value to the company. Even though he is the majority shareholder, which gives him majority power, but because you are the technical partner, you are also empowered. And the operator in most cases can even be more powerful than the financial partner because he controls the day-to-day activities of the business.

So you have to recognize your authority in terms of the responsibility you hold and exercise it. Tell him the likely consequence of his undue interference in your day-to-day activities, and the detrimental effects of hiring unqualified family members to work in the company.

Don’t be quick to jump out of what you worked for, sit and discuss things together. If, after discussing these with him, you are not able to agree on a solution, then you can start discussing pulling out. You may try to buy him out of the company. But seek peace first, and if that fails, you can then consider the alternative.