The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future

Partnership: How 1 + 1 = 3
 
One path to franchising yourself is to team up with a trusted partner. This
doesn’t mean you completely merge your business with that person; in fact,
the  easiest  and  most  common  way  to  partner  with  someone  is  to  create  a
joint  venture.  In  this  arrangement,  two  or  more  people  join  forces  to
collaborate on a single new project. (Karol and Adam’s “fire sale” project,
described in 
Chapter 8
, is a joint venture.)

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In  other  arrangements,  an  all-new  business  is  created  that  is  jointly
owned by the partners. That’s what Patrick McCrann and Rich Strauss did.
They were both high-end performance coaches for athletes and decided to
team up to create Endurance Nation, a training program and community for
triathletes.  They  divide  responsibilities  on  the  basis  of  what  they’re  each
good at. Patrick calls all the new members on the phone to welcome them,
and Rich crafts an online training plan for them.
†
However it’s structured, the goal of a partnership is to grow beyond what
each  person  can  create  on  his  or  her  own.  Ralf  Hildebrandt  operates  an
international professional services firm based in Stuttgart, Germany. Here’s
how  he  explains  why  1  +  1  can  equal  3:  “My  rule  of  thumb  is  that  a
successful  partnership  (or  any  type  of  collaboration)  should  create  a
combined business which is at least 33 percent larger than the sum of what
the two individuals could achieve on their own.
“People are often inclined to think that distributing work to a few others
is  what  partnership  is  about,”  Ralf  continued.  “But  that  is  just
subcontracting. True partnership must create more than just a divided list of
tasks.”
Courtesy  of  Pamela  Slim,  a  coach,  author,  and  expert  on  partnerships,
here’s an abbreviated list of decisions you should make at the beginning of
any joint venture:
• How will the money be divided? (Common splits include an even 50-
50, 60-40 with the higher share going to the partner who does more
work, and 45-45 with 10 percent reserved for administrative costs.)
• What are the responsibilities of each partner?
• What kind of information is shared between partners?
• How will the project be jointly marketed?
• How long will our agreement be in place?
• How often will we touch base to discuss the partnership?
 
Check out the One-Page Partnership Agreement for a simple way to spell
out basic agreements between two parties.