Reflections

In September of 2007, I joined a phenomenal group of professionals as we all embarked upon three years of study in the Fully-Employed MBA (FEMBA) program at UCLA’s Anderson School. I have been impressed by the intellectual diversity of the school, and the variety of experience each person contributes to the conversations we have.

I had always heard that business school is an incubator of business ideas, a place where schemes are hatched and potential business partners walk the halls. I don’t really consider myself an entrepreneur - even though generations of my family on both sides has been involved in business - but there something about thinking about business and management constantly, and being surrounded by people who are full of ideas and plans for the future, that just makes you want to join in. So a close friend and I recently realized that we had complementary ideas that could come together to form an interesting, and potentially successful, business. If nothing else, we thought, we’ll be able to put what we are learning to use as we work through the tribulations of starting something new.

Today I realized that this was also a great opportunity for me to communicate some of what I learn in school to my readers. So, as we move along in this venture, I will post articles about the process we are going through, what we are learning along the way, and the pitfalls we are encountering. Right now I’m not going to go into the specifics of what we’re working on, but as we get farther along I will start sharing some of the specifics. These posts will all be categorized under “Small Business”, so if you are most interested in these posts, please click on the “Small Business” category link.

To partner or not to partner, that’s one of many questions

One of the most difficult activities in any business venture is coming up with an idea. We are still in the process of figuring out exactly what we are going to offer to the world, but we happened to have similar interests and ideas, and they fit together very well. It is very difficult to decide whether you should partner with someone early on, and risk both having to compromise on your vision, or just go it alone and risk, well, being fully on your own.

My partner and I have only had two meetings so far, the first one involved us talking about each of our ideas and realized that they would fit well together, and the second was our first proper planning meeting (I’ll go into how one should start in a post very soon). Even in these two meetings, we have worked together rather than against each other, and have come up with ideas that neither one of us would have come up with on their own. Therefore, when you can find a partner who shares your business interests, I think it can be worth discussing further whether you might be a good match. Some might even argue that a good partnership is more important that a common vision at first, and though I have yet to see this through, I think there might be some validity to this point.

It is, however, extremely important that you spend time discussing how much you would each like to put into the endeavor. I have seen friends have problems with partners who wanted to spend a different amount of time on a given initiative, and this can often end in difficulty for all parties involved. Additionally, as you get farther along and decide exactly what you have to offer the world, it’s critical that some or all of the following questions are discussed:

1. How long are you each planning to work on this venture?
2. If you are both working regular jobs, how much time are you able to devote to this business?
3. Should the profits be evenly distributed, be based on capital contributions, be based on effort or skill-set, or something else?
4. If the business is a huge success, will you want to sell it off to the highest bidder to cash out early, or would you want to stick with it for a while and grow the business?
5. What do you each see as the future of the business, and how big do you feel the company should become?
6. Do you want to set a checkpoint sometime in the near future to discuss further your future plans, and how involved each of you wants to be in the business? Maybe once the business plan is better established you will each be better able to decide your level of involvement.

There are many more questions that should be asked, and discussions that should be had, but it’s critical that each party is open about their future intentions, so that there isn’t a huge disparity in goals when the company is growing, leading to dissolution and disappointment rather than success.

Tags: Small Business //