I am a huge fan of business partnerships. I have many. It has enabled me to develop stronger relationships, embody a spirit of service and encounter a superabundance of wisdom. But without patience and understanding, someone’s partnership can fail, even before it begins.
Consider this: One day, You and your best friend are out having a cup of coffee.
You both have been doing CrossFit for two years. You both have your CrossFit Level 1. You both have the skills and desires to bring the new definition of fitness to your community. An idea hits you: Let’s start a CrossFit Affiliate together.
Your Affiliate is born. You agree everything will go 50/50. The startup, the expenses, the responsibilities, the coaching and the hard-earned profits. You begin with one member, and then the rest follow. A year later, your facility is thriving.
But something else changes, too. You begin taking more of the responsibilities, doing more of the coaching and notice an attitude change in your partner. He/she is lacking effort, but wanting more. You begin to disagree on how to run the facility. You disagree on essential business decisions. The agreement you laid out is now on the brink of making drastic changes and for the worst.
This is a very common outcome when working with business partners. And if you do not have a clear and concise plan from the beginning, your ability to “hash it out” later on may prove to be a failure. During this two-part series, I will lay out some guidelines on how to develop successful relationships and turn them into powerful business partnerships.
Creating an Affiliate doesn’t require a huge amount of money to start. If the duties and responsibilities are not laid out, however, it can become a rigorous and frustrating process.
With a partner, the pros are many:
The cons just happen to be many, too:
When wanting to start an Affiliate, consider these vital questions you should ask yourself before bringing on the partner you think you need:
If you have known them for a long time, your discretion on whether to go into business with them is based solely on if you feel comfortable with them. If you just met or have only known each other for a year or two, the best way to find out about your potential business partner is research. Either way, you need to make sure that the business responsibilities and duties are lined out specifically from the beginning. This will include duties, how much capital is invested by each person, what percentage of the company is owned, how decisions are made and resolved, how profits are distributed, and a buy sell agreement. Acquiring a lawyer to draft up an agreement is not required but is highly recommended. That way you are both protected.
Business partnerships can be an amazing step into creating something truly special inside your Affiliate, but not without answering some questions first.