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The Buddy System

“The Buddy System”

Partnerships are never smooth sailing, but managed properly, they can give entrepreneurs a powerful edge.

"I couldn’t imagine running a business on my own," says David Kravetz, co-founder of Fairytale Brownies Inc. in Chandler, Ariz.

Kravetz and his partner, Eileen Spitalny, launched the food mail-order business in 1992. Today the company generates $4.25 million in revenues. "I think we’ve avoided a lot of mistakes by having someone to bounce ideas off on," adds Kravetz.

Pros and cons

Indeed, having a reliable sounding board is cited frequently as a key benefit of partnerships. A partner can give valuable input because he or she isn’t afraid to contradict you, like employees might be.

Other valuable aspects of partnerships:

Complementary skills. "My partner has a better background in sales than I do, and I have stronger management and operational skills," says Frank Riordan, founder of DMC Inc., a $1.5 million engineering and software-development consultancy in Chicago. "If your partner is a clone of yourself, then in the long term, you’re probably better off without them."

Complementary styles. "Sometimes you may not have a real personal chemistry with a client, and having a partner allows you to trade off work without making clients feel like they’re getting a lower-level employee," says Karen Stinson, founder of ProGroup Inc., a $10 million Minneapolis consulting firm that specializes in diversity training.

Time off. Having a partner allows you the luxury of taking a break without worrying about the business.

Camaraderie. "It can be lonely at the top," observes Stinson, who launched ProGroup in 1986 and took on a partner four years later.

Sharing financial risk. Your partner may have money to invest — or contacts who can.

Negotiating leverage. "Simply having the option to tell someone that you have to review an issue with your partner can be very helpful," says Riordan.

But there can be drawbacks, including:

  • Loss of independence and control.
  • Parting ways can be difficult and sap the company.
  • Employees may try to play partners against each other.

There’s also a certain psychological vulnerability, points out Brian Butler, co-founder of Nine Iron, a private-equity investing firm in Chicago: "Partners know your strengths, but they also know your weaknesses, which doesn’t happen as much in a pyramid-type organization with one founder. You really have to learn to check your ego at the door."

Making it work

Communication is the cornerstone for any successful partnership, business owners stress.

"We’ve had our share of conflict, but we resolve most issues by just talking things through," says DMC’s Riordan. He and partner Dave McMorran hold biweekly, off-site meetings. "This is our ‘quality time’ together, and it really helps. Otherwise, I’m out of the office and then Dave is out — before you know it, days and weeks can go by without us touching base."

Similarly, at Fairytale Brownies, Spitalny and Kravetz go out to lunch every Monday to brainstorm and bring each other up to date. "It’s something we started a couple of years ago because decisions were getting made, but weren’t being communicated," explains Kravetz.

Leaving the office helps make those meetings pay off, stresses Spitalny: "You think of better ideas if you get away. Otherwise you can get tunnel vision and won’t be able to see the best idea — even if it’s sitting right in front of you."

Not only have Spitalny and Kravetz noticed an improvement in communications, but so have their employees. "Before we were hammering out ideas in front of employees during staff meetings because we hadn’t had a chance to talk to each other," says Kravetz. "Now we present a unified front."

Divide and conquer

Many business owners believe that splitting up responsibilities forges a stronger partnership.

At LeadTrack Systems, a CRM consulting firm that Steve Raizes founded in 1992, Raizes was in charge of operations while his partner handled sales. "Yet these lanes weren’t as clear as they might sound," says Raizes, who sold LeadTrack three years ago and is now CEO of Real Branding Inc., a Web-site design and online-advertising company with 20 employees in San Francisco. "With Real Branding, my partner and I have had a very clear division from day one."

That dividing line leads to better results, Raizes says: "If anything is ever slipping, my partner and I know who’s responsible for picking up the slack. And when you’re ultimately responsible, you’re going to put more effort toward it."

Establishing separate turfs also eliminates confusion for employees, adds Raizes: "At Real Branding, employees know who’s responsible for assigning their work. At LeadTrack, it wasn’t as clear, and employees would play things off me and my partner, picking and choosing whom they consulted."

Caution: Any division of responsibilities will spark some natural tension. "Sometimes David may veto something that I want to do because we don’t have enough money," observes Spitalny. "But because I’m in charge of marketing, it’s important for me to think ahead."

A unified vision

The single biggest factor causing partnerships to fizzle and fracture seems to be lack of a common vision.

In the mid-’90s Rodney Capron Jr. started a Web-development company, which he folded into another firm with a friend. "Unfortunately, we had two completely different visions from the start," says Capron. "My partner wanted a sales-training and multimedia company, but as time went on, the Web-development side started to take over everything."

Tension mounted. "The more time I spent in the office, the less I liked my own business — and my partner," recalls Capron. "It seemed like we fought whenever I was there, and the company started to divide because of this." In 1998 Capron called it quits. Taking one employee and three accounts, he launched Synthenet Corp., a new Web-development company based in Northborough, Mass.

Writer: TJ Becker.