A Successful Business Partnership

Every accountant I know can tell you horror stories about business partnerships that failed disastrously, so should you avoid going into partnership with someone else?

Probably, well... maybe.

However, partnerships are definitely worth considering, because of the potential advantages.

Running an affiliate business all by yourself can be very rewarding, but at times it can also be a lonely, frustrating way to earn a living. Maintaining motivation and enthusiasm can be a challenge, too, when you're all by yourself.

As you'll know as an affiliate, there are so many different skills you need... research, persuasive writing, web design, a bit of HTML, bookkeeping, maybe programming, etc. The more complex your affiliate business gets, the more skills you need.

At times, you can feel as though you're trying to be at least six different people, just to keep your business running. And you probably don't want the hassle of trying to find, hire and train five or six contractors to handle all these different tasks.

One answer is to form a business partnership with someone you respect and trust.

I know from personal experience that partnering with someone who has skills you don't have can give your affiliate business a quick boost, and allow you to concentrate on the tasks you like best and do best.

For example, you might like writing while your business partner's skills could be in computer programming and website design.

Perhaps your partner is better at goal-setting and strategy, too. Or better at persuading other websites to link to you.

Regular meetings with a business partner can help give you a boost if your enthusiasm starts to wane. Discussions with a respected partner/friend can also inspire you to set - and achieve ambitious goals.

Regular meetings can also help keep you on track, doing the most important revenue-generating tasks, and avoiding wasting time on things that a "nice to do" but don't actually move your business forward.

Of course, partnerships have disadvantages, too. Things can go badly wrong, for all sorts of different reasons.

Depending on which statsistics you believe, anything from 50% to 80% of business partnerships fail, so I'm sure you're not going to rush into a partnership without giving it a lot of careful thought and research.

I'm not going to delve into all the advantages and disadvantages of business partnerships. Others have already done so (more about that later).

Successful business partnership

What I'm going to do is give you an example of an affiliate business partnership that is working well.

When I interviewed Jeff Ostroff (Affiliate Marketing Success Story) one topic we discussed was his successful business partnership. He has valuable insights to offer affiliates who want to grow.

Jeff and his business partners were co-workers at Motorola.

"We used to go to lunch all the time and brainstorm ideas when the dotcom boom was in full swing in 1998-1999," Jeff says.

About 10 years ago, they considered setting up an office, but decided to try working from home with no commute, and this arrangement has worked out nicely for them.

They have similar skills. "Two of us are electrical engineers, and the third partner is a software engineer. We all learned HTML just by working with it, trial and error."

Jeff, whose main website is CarBuyingTips.com, is the public face of the business. His partners choose to stay out of the limelight.

Reasons why they succeed

One reason for the strength of the partnership is that they always agree to everything before moving in a direction on something, so this has made the partnership last, Jeff says.

"We are each equally motivated with work as well so it all works to keep our partnership healthy. I have heard of partnerships where one guy becomes a dead weight and that's when trouble starts, but we avoid all that.

Would you recommend other affiliates team up?

"As your business grows, you may decide you want to bring in partners to lighten the load. One can handle the finances, one can handle the technical end, and if you're hiring employees, one can run the day to day operations.

"One thing though, don't be afraid to grow. Don't be afraid to go rent an office space, and don't be afraid to hire people even if it means you may earn less, because eventually your company will grow and you'll earn more.

"Make sure your 'articles of incorporation' as we call it in the U.S. clearly state the agreement between all the partners, who owns what percentage, what the exit strategy is, how you handle deadlock votes, and what to do with a deadbeat partner.

"We always use a law firm to generate our agreements and articles of incorporation, so they make sure it gets done right. Don't get cheap here to try to save a few bucks and think you can do this step without an attorney. A properly structured corporation for example looks better to potential buyers who want to invest in your company, or buy you out."

My recommendation - start slowly

If you're keen to grow your affiliate business by teaming up with another affiliate, I strongly recommend that you start slowly to see if it works for you. One way to dip your toe in the water is to team up just for one small project, for example, to research, build and market one website.

Perhaps one partner could create the content - articles, videos and perhaps newsletters or email courses - while the other partner does everything else. Does that sound as though someone is getting an unfair workload? Welcome to the world of partnerships. You need to sort this stuff out carefully BEFORE you start.

Be sure to write everything down - your goals, your expectations, and who does what.

Anticipate problems. Make a list. What if there's a technical problem with the site? Whose job is it to monitor the site and quickly get it online again? What if an affiliate merchant's product is no longer available? Who will research a new product and update your site? Is anyone writing guest posts for other sites or blogs? Or press releases? Are some of the links on your site faulty or dead? Is anyone monitoring them? What about domain name renewal? Who's responsible? Replying to emails? Responding to blog comments? What happens if one partner is sick or wants a vacation? And so on...

Let's say the site is successful. Two years from now, it has lots of good content, lots of links and lots of sales. What will happen to each partner's role? Will one want to keep expanding the site and the marketing while the other says it's time to relax?

By starting small, you can get a taste for how a larger partnership might work and get a feel for the enthusiasm, skills and knowledge of your partner. A small experimental partnership could prepare you for full-scale co-operation. Or warn you off.

Before you start planning your own successful business partnership, I recommend you read the following useful articles. They contain inspiration, caution and good advice:

10 Super Successful Co-Founders and Why Their Partnerships Worked
Finding the Perfect Business Partner
Don't Make These 4 Common Mistakes
7 Tips for a Successful Business Partnership

September 16, 2011

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