PARTNERSHIPS:
THE GOOD, THE BAD
& THE UGLY
By Sean Greeley
F
rom professionals
wanting to open a
new business with
their friends or family, to
existing partnerships that
have gotten difficult and
not working out as planned,
and everything in-between.
Whether you’re considering entering
a new partnership, or managing
an existing one, partnership
relationships (like all others) take
work. In this article we’ll break down
the best ways to lead you to success
and clean up the mess when it’s no
longer working out and you need to
part ways.
A lot of fitness business partnerships
start out with friends who share a
passion for fitness decide ‘let’s go
into business together!’.
In the beginning it sounds like
a great idea. If you can share
resources, complement each other’s
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strengths, and share the workload as
you grow together, everybody wins.
But partnerships can also come with
a lot of challenges that too many
people choose to ignore addressing
until things get difficult and by then
things only gets tougher to navigate.
And when something as personal
as a business and your incomes are
at stake, you can’t just walk away
easily when things get tough.
gaps. Issues of control and
boundaries, as well as issues of
personal responsibility can crop up.
Attitude towards investment (and
re-investment) in business growth:
As revenue comes in, do you share
the same attitude on re-investment
in the business tied to your vision
and growth strategy? Growing
businesses are like babies. They
always want fed, but with cash! Operational decisions: If a key
decision has to be made about
running the business (an investment
or purchase, etc.) and there is a
disagreement? Who makes the final
call?
Expectations on personal income:
Also tied to re-investment is
your attitude and expectations
around personal salaries and
distributions. Are you aligned in
your expectations? Are those
expectations tied to a financial plan
and budget that is practical for the
business?
Here are just a few of the top
challenges partners struggle with
alignment (and misalignment) on:
Values and mission: What do you
stand for? What fires you up and
why are you excited about starting
and growing a business?
Vision (personal and business):
Where do you want to be personally
and professionally in 1 year, 3 years,
5 years and 10 years?
Work ethic: People may use the
same words when they say “hard
work,” but they may mean very
different things, including things like
hours (time), intensity of focus and
effort, and detail orientation.
Roles and responsibilities: Who does
X? Who does Y? Ownership roles are
very different from operational roles,
and not all roles have (nor should
always have) the same value to
the business. It’s critical you clarify
who does what, but watch out for
assumptions and communication
WHAT’S NEW IN FITNESS - SUMMER 2019
Exit strategy: One partner wants out
or to take a deal, the other partner
doesn’t. When are you willing to
exit and why? Have you discussed
it beforehand? How will a split
decision be handled?
If you’ve read the list above and
are thinking, “Wow! That’s a lot to
think about!”, you’re right. Better
to think about it (and have a plan)
beforehand than discover halfway
through you want to pull the ripcord
(or worse, feel like you have no
clear strategy and plan and you’re
TRAPPED and can’t!) in a business
partnership that has gone sour.
So let’s start with the first, big
question:
1:
Should you have a
partner?
What are the advantages of having
a partner?
You’re not alone “at the top.”
Business is tough and surrounding
yourself with others that can
complement your strengths and
weaknesses, and help fuel your
passion, can be a tremendous
catalyst for growth and success.
Having a partner involved in the
operations of the business with you
means you also don’t have to make
every major decision (and take all
the risk) by yourself.
You may have complementary
skill sets. Some may be better
at executive work and another
at programming. Some may be
better at sales and marketing, and
others love coaching clients and
managing staff. Sometimes, more
is just more. More hands lighten the
workload and allow for faster growth
WHAT’S NEW IN FITNESS - SUMMER 2019
opportunities. Particularly when
you’re starting out.
What are the disadvantages?
It’s the flip side of “You’re not alone.”
Depending on the structure of your
relationship, you can’t just run your
own show every step of the way. You
have to coordinate decision-making
and strategy. You and your partner
may not align on priorities.
You may have different visions,
even if you started out wanting the
same things. As your business (and
personal life) evolves, changes, and
grows, you may see the way forward
very differently.
On the finance side, you may have
different thresholds for financial
pain and different risk tolerances. If
one person has a family dependent
on the income, and the other just
has to simply cover their own cost
of living expenses, those are very
different scenarios. Opportunities
(and differences) may arise and it
isn’t always easy to agree on a path
> >
to pursue.
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