A partnership is a formal arrangement by two or more parties to manage and operate a business and share its profits.
There are various ways to describe partnerships: general, limited, limited liability, pass through, silent, etc. I’m using “Partners” broadly: People who are contractually or otherwise engaged together in a business undertaking.
Preference
Based on our formative career experiences and our personal inclinations, some of us prefer to operate alone, while others feel more comfortable sharing an undertaking. That inclination can shift over time. Having worked both ways, I feel a little smile in my heart when I see people navigating positive partnerships.
I’ve had excellent partners—law partners, international business partners, partners in raising capital and operating a business in Russia, a partner in flipping real estate properties, and a partner in a tech company. Naturally, I’ve also had disappointing relationships that didn’t meet my expectations of partnering. Maybe they felt likewise…
Duration
Entering – Think of a couple’s engagement party—fun! At the outset of a partnership, when hopes are high or during good times, it’s easy to be a happy, even magnanimous partner.
Salvaging – The true test of a partnership comes when things get hard. Particularly during times of financial pressure, we might not conduct ourselves as we otherwise would. During partnership stress, we can try to summon our best traits and allow for others’ strengths and weaknesses – and ours as well.
Ending – From The Pinball Theory of Business & Life:
If neither party jumps into finger-pointing or self-protection mode but treats each other with respect as real partners, magic can happen—instead of a business disaster, ruined careers, and reputations.
Or, it can be time to end it.
A Decent Unwinding
Even good and solid partnerships sometimes must unwind. Times, things, and people change—often unexpectedly and not necessarily through anyone’s fault. We can try to accept such a necessity with understanding, integrity, and even grace for all involved.
Before or during the champagne days of the partnership, consider a Buy-Sell Agreement or something similar. It should go a long way toward a decent unwinding and possibly minimize personal animosity. With or without such an agreement, it would be a shame for former partners to suffer from unnecessary bitterness long after the split. Try to avoid it.
Friends
Opportunistic partnerships are common, appropriate, and can be very successful. Still, an abiding friendship is a great enhancer.
In Pinball Theory, I highlighted the role of friendship in the Humana Story. The two founders, young lawyers with families to raise and no capital of their own, had a deepening friendship until death ended a magical relationship. The survivor believed their similarities and differences combined into a truly remarkable partnership. He said their friendship was unique and critical.
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True partners are true to each other, come what may…
