THE EXCITEMENT OF A NEW VENTURE
Terry and James had known each of for years from professional associations. They had great mutual respect for each other’s professionalism and reputations. They even had occasion to collaborate on a big project for nonprofit board, so they knew they could have a productive and enjoyable working relationship.
Because they got along so well, they were very enthusiastic about their decision to join forces officially and become a partnership. They met regularly for lunch to decide on how they would position their services and expand their markets; there were no disagreements and they very much felt that they had a shared vision for their new business. However both had failed business partnerships in their past, and were determined to avoid the pain, expense, and drama that were so fresh in their minds.
Because they had each owned their own business with similar types of clients and for a similar length of time, they had been working on the assumption that their business were of roughly equal size and value, and that they would be 50/50 partners to start.
When the agenda turned to financials, they were both surprised to learn that there was actually quite a disparity in recurring revenue. Although the prospective partner with higher income was open to “being equal” the other partner knew this could lead to resentment over time. We helped them work through and Owners' Equity Matrix that had each partner value the respective contributions of revenue, time, contacts, expertise, and skills so they could rethink their equity split and come up with a figure that they would both be comfortable with in the long term.
From the joint compatibility assessment, they discovered new information about each other’s preferred style of working, behavior, and motivations. They learned that Terry liked to decide quickly and James like to take his time on big decisions. Our discussions of the implications of this lead them to agree that James would take on certain responsibilities to make key recommendations on items like software and real estate, but that he would be accountable to a timetable agreed to by Terry.
In the facilitation, we engaged them in a round of scenario testing with regard to how each would exit the business in a range of best and worst cases. They agreed that in the bloom of a new business it would be easy to put off thinking about the end. They left the facilitation armed not only with agreement to how they would handle different situations, but also the peace of mind that they had considered as many outcomes as possible that contemplated security for each other and their families.