What should I consider before partnering with someone?

Q and A by C.J. HaydenI’ve done a lot of partnering with other professionals on creating new programs and products or serving clients as a team. One key piece of my experience has been that some partnerships work well and some don’t work at all. After several false starts on partnering, I decided that for any new potential partners, we would “date” before we “got married.” What we do is identify together some way in which we can partner with minimum risk to try each other on, with the agreement that if either of us feels the fit isn’t right, we don’t proceed.

For example, if I were co-creating a group learning program with someone, I would first want to co-design and present a one-time workshop of very short duration — perhaps just a one-hour teleclass. That way I would get a feel for how my potential partner works, and whether his/her material and style are a good complement to mine. In negotiating the business end of this “road-testing” program, I would also get to know how my partner is as a businessperson.

There would be minimum risk in a brief, low-cost program like this, even if everything went wrong. And I wouldn’t have any obligation to continue.

It may seem like a lot of extra work to add to your plate a test engagement like this that you hadn’t originally intended. But the way I look at it, this is a necessary step to moving forward. Over the years, I have had more failed partnerships than ones that worked. None of them ended with bad feelings between us, but many of them caused a great deal of wasted effort on both sides. I’d rather do a little extra work up front to avoid a lot of lost effort later on.

Requiring this road-testing step has helped me enormously, because now I only enter into partnerships with people I have already worked with and feel I can trust. This makes writing a contractual agreement between us so much easier. I still make sure all the elements of risk get addressed in our contract. But I don’t have to worry so much about sticky issues of interpretation, intent, enforcement, etc., if I’m working with someone where some mutual trust is already established.

During road-testing, you can evaluate your potential partner’s personal style, determine his or her business savvy, and learn more about what assets your partner brings to the table. This will help you a great deal in making what is often one of the hardest decisions — who gets paid what?

Partnerships don’t have to share revenue on a 50/50 basis. One of you may have more experience than the other, and be acting as a bit of a mentor to the other. Or one of you may be putting up more seed money. Or perhaps one of you has access to a larger network, and will probably bring in the majority of the clients. All these factors should be considered when deciding how to divide up the profits from your venture, and share any expenses you may incur.

Often times, one of the messy issues in a creative partnership is who owns the resulting intellectual property. The way I typically handle the ownership of jointly developed material contractually is that we both own it. My partner can do something else with the material without me later on, and vice versa. That seems fair to me if we both contributed to its development.

You could also add a clause to your contract invoking a royalty payment to one partner if the other partner earns something on the material independently, but I haven’t found it necessary in the type of road-tested partnership I described above. I’ve found that the balance has been pretty even in terms of how often I use material without my partners vs. how often my partners use it without me.

I would, however, include a contract clause that says ownership reverts to one partner 100% if the other one dies. That way you don’t end up with your partner’s spouse or child as your not-so-silent partner, against your wishes.

Whatever you decide about how to share profits, expenses, and ownership, make sure you come to an agreement before you get started creating or serving clients. Don’t make the mistake of assuming you can sort all these issues out once there is something to share. That approach can be a recipe for disaster.

Instead, consider negotiating an agreement the last step in deciding whether this is the right partner for you. Partners who will work well together usually have no trouble creating an agreement. But if you can’t agree about the agreement, you probably won’t agree about the work either.

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