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Dealing With Irreconcilable Differences

 
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By Sarah Schafer
Washington Post Staff Writer
Sunday, June 27, 1999; Page H6

Do you promise to honor and love him, for better and for worse, in sickness and in health, for richer and for poorer, till death -- or acquisition -- do you part?

Business partnerships often are compared with marriages, and for good reason, say many who have entered into entrepreneurial matrimony. There's courtship, dating, the wedding and often divorce. Business partnerships even have the euphemistic buy-sell agreement that serves as the equivalent of a prenuptial contract.

But despite the similarities, fledgling and veteran businesspeople alike often fail to weigh the pros and cons of entering a business partnership as carefully as they would those of a marriage.

That's a mistake, said Peter Wylie, a Washington psychologist who has counseled business couples for almost 20 years. Entrepreneurs, he said, are go-it-alone types.

"I don't think entrepreneurs make good partners," he said. "They basically want to run the show on their own [and] they're not good sharers."

Carlton Lewis, president and chief executive of DevCorp in Washington, has been a client of Wylie's since the 1980s, three companies ago.

"I'm not a troubled soul," Lewis said defensively, "but I think, especially in start-up efforts where it's so easy to get caught up in the thrill of a deal, you need to make sure everyone's" in sync.

Recently, when Lewis considered bringing in two acquaintances as partners in his consulting firm, he first brought them to Wylie for a group session.

"This was a bit uncomfortable for me," said David Connelly, who became Lewis's partner and now works in DevCorp's Westford, Mass., office. "I like the concept, but the reality of being honest and open . . . is a little bit threatening."

The third person did not become a partner. "Through this process, it's my belief he got some insight and some better understanding into what Carl and I wanted to do and realized it wasn't what he needed right now," Connelly said.

Wylie first met individually with the three potential partners, getting to know them a little so he could make the group session more effective. He asked them about their attitudes toward investing, for example, and how they viewed the others' fiscal behavior.

Nothing was too personal. "Carlton is black and I'm white," Connelly said. "Peter made a point of talking to us individually, how we felt about it, if that were a problem, which I guess I felt like a lot of people would have tried to shy away from."

In Lewis's experience, however, big issues have not been the problem with partners. "It's the little things," he said. One partner from a previous venture was not a morning person, for example. "I'd be in the office at the crack of dawn," Lewis said. "By the time he was gearing up, I was gearing down."

Even people who have worked together in an office environment can find themselves not at all suited for partnership.

Rich McElaney described his first partnership experience with a former supervisor as "the most intense, unpleasant exercise I've ever gone through."

So unpleasant, in fact, that McElaney moved 3,000 miles away from his last company to start his new one, Micromarketing, in Chantilly. McElaney's started his former company, a mass-marketing mailing company similar to Micromarketing, with a supervisor from a large firm where he had worked for several years, until the company decided to get out of the information services business, thereby eliminating both men's positions.

McElaney and his boss decided to continue working for their clients on their own and formed a new company, along with a third person who took a stake of less than 5 percent. But it soon became clear that two sales personalities did not mix. "There were control issues," McElaney said. Making matters worse, McElaney said, his partner and the minority investor were neighbors.

The final blow came, McElaney said, when the two reached an agreement with a customer stating they would not deal with any other customers in the same industry, effectively killing two deals McElaney had been working to secure.

Instead of fighting, he said, McElaney decided to activate his buy-sell agreement, an exit strategy partners design that acts as a type of prenuptial agreement. Under the terms, the partners could either dissolve the corporation and divide the assets, one could buy out the others, or they could sell it to a third party. They chose option two.

Buy-sell agreements often prevent battles over who brought what to the table, and while some may think it is pessimistic to start a partnership with a plan for divorce in place, many who have activated such agreements say they are a must.

After all, said Lewis, "Sometimes things don't work out. How you dissolve can be as important as how you get together."

Before You Pick That Partner


Many things can strain a partnership, and it's difficult to predict which partners will thrive and which will split. Peter Wylie, a Washington psychologist who counsels business partners, offers this advice for those considering an entrepreneurial duo:

Pick a project to work on together that falls short of a legal partnership. As silly as it sounds, even playing tennis with someone for a year or more can give you insights into how he or she deals with stress. "I can't mask my personality with them, they know it all," said Wylie of his tennis partners.

Pay attention to how your potential partner deals with his or her family. Also, be honest with each other about personal problems -- such as a separation or family illness -- that could bring added tension to a business partnership.

Decide what you are willing to give. "There is a natural tendency to overestimate your own contribution to the well-being of the [company] and underestimate the contribution of a partner," Wylie said. This happens regardless of how much people are actually working. If you already have pet peeves about each other's work habits, you might want to reconsider a business partnership.

Ask yourselves if you would be better off alone. Choosing to find a partner because you're afraid to go it alone "is very understandable," Wylie said. But, he added, many entrepreneurs "are not good sharers." Make sure fear is not your only motivating factor.

© 1999 The Washington Post Company

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