Choose Your Business Partners Wisely

Stupid Business Story:

My business was booming and I needed to spend more time away from the office, working on additional marketing and joint venture promotion and deals. My Operation Manager had a small ownership in the company and wanted more. So we worked out a deal where he could continue to buy in at a lower cost. He still kept his same salary, but would now get a percentage of the company as well. I figured that he’d be paying even more attention to the business since he was a partner.

Boy, was I wrong! When the economy was booming, it covered a lot of other problems. When the economy turned down, I came back to working more in the office and that’s when I found a mess. He had hired friends who really didn’t do much work, paid them outrageous salary amounts and benefits plus he rarely was in the office. He missed vital appointments. In fact, I found out the joke was that the office that he was usually at was a corner bar, at least after noon.

Worst of all, I found out that he had signed a contract that ended up costing our company over $150,000. I had never seen the contract and certainly never approved it. But even though he was a minority partner, he had the right to make a contract that I, as his partner, had to honor.

The company survived, but there were some tough times. The best check I wrote was the one that bought him out.

Lesson From the Story:

Think long and hard before you make anyone a partner in your business. Do they have something they bring to the table that no one else can do? Can you hire the skill instead of giving away your precious equity? A bad partnership can destroy a business.

Thanks To:

Anonymous

Do you have a business story you’d like to share? It can be your own story or someone else’s. You can include your name or be anonymous. Please go to http://www.smartbusinessstupidbusinessonline.com/stupidbizstories and post the story. If your story is used, we’ll send you a book and a whole lot of thanks!