Four Secrets to Starting A Successful Business, Part 1
So, you want to launch a small business or reposition your company as a managed service provider (MSP). What steps can you take to maximize your chances for success? I’ve written a four-part blog to cover that very question. Tune in each day this week for the next chapter. Here’s part 1: Finding the right partner to co-launch your business.
As an entrepreneur myself, I’m not sure I could — or would — launch a business on my own. I find that working with a partner (a true co-founder and co-owner in the business) is far more effective and rewarding. But how do you find the right business partner, and do you even need one?
In the case of Nine Lives Media Inc. (MSPmentor’s parent), you can consider me an editorial director and a chief technology officer of sorts. While I build our Web sites, explore new technologies and shape our online communities, my business partner (Amy Katz) runs our business, builds strategic relationships, oversees sales, manages our accounting relationships, etc. Amy is CEO … but she wears many additional hats (CFO, etc.).
So, what can MSPs learn from our own strategy here at MSPmentor?
- Partners should have different skill sets: Amy and I have a lot in common — similar business goals, a drive to do great work, a general understanding of how to build media products. I’d say our skills have about 20 to 40 percent overlap, with the other 60 to 80 percent of our skills being completely different. Amy is a management and sales pro who thinks things through and really analyzes situations. I’m a shoot-from-hip type person who stays up at night because I’ve had an idea I want to implement immediately. But that can be dangerous if my “gee whiz” idea is a bad one. Together, we balance each other. Warning: If you have the exact same skill sets as your potential business partner, there could be some potential benefits (such as a shared workload) but you may also have blind spots in your business and your redundant expertise may do more harm than good.
- Partners should have similar financial goals and priorities: Imagine if one business partner was a big spender — and always wanted to lease the latest car, buy the latest computer, etc. And the other partner was far more conservative with money. Amy and I have avoided a lot of arguments because, generally speaking, we’re conservative with our money and we have similar goals: We reinvest in our business, we’re always looking for cost-effective ways to do marketing, we stay in low-cost hotels during business travel, etc. Hint: You’ll know if you’re a financial match with your partner by following some of these examples: Amy and I knew we were a financial match when we suggested similar initial funding for the company; initial salary targets; initial revenue targets, etc. Hopefully, our financial goals remain aligned in the years ahead, but so far we’ve been on the same page — or in the same ballpark — multiple times.
- Partners should have similar family commitments: Imagine if one partner was single with no family commitments and worked 24×7, including weekends. And imagine if the other partner was married with a family, and had to unplug from time-to-time to hang out with their spouse and kids. At some point, resentment between the two partners may set in. We’re pretty flexible at MSPmentor. Amy and I can reach each other at any hour of the day. And we do tend to work very long hours. But those hours are flexible so that our families don’t disown us. We have family commitments that we can’t abandon.
- Partners should have similar stomachs for risk: How much financial risk is enough? How much is too much? You’ve got to talk these things through. If one partner has deep pockets but no tolerance for risk, and the other partner loves Vegas but lives paycheck to paycheck, you’re in for a bad business marriage.
I’m sure I missed a few key points. Feel free to weigh in with your own perspectives. Did you start a business with a partner? Why did it work or what caused it to fail?
Part II in this series — focused on the two key people you need to meet before incorporating your business — will debut July 1.