Successful partnerships are built with defined roles, structure and systems
I am an owner, along with two other partners, of a music teaching studio. We have what is called a storefront independent studio. There are two locations and we meet for staff meetings once a week to keep in communication. I manage one locale by myself and the other two partners manage the original one.
Your ideas on meetings [in a prior column] were very helpful to me and I wondered about applying them to a situation like ours. We do need to work at setting goals and a vision for our business. We are very good at assuming a lot. Humor aside, we often end up in power struggles. We rely very heavily on friendship to keep our partnership going.
We have a corporate structure and each own equal shares in the business. We are very creative and enthusiastic about what our business has to offer. Most of my partners’ backgrounds are in music and teacher training. I hold an associate’s degree in administrative assistant in addition to musical and teacher training. Our business background is limited and confidence is low in this regard. However, I believe some ideas on communication between three “managers” would be a good place to start.
The “Friendship Business Model” is dangerous. In fact, it may even be more dangerous than the “Family Business Model,” in which a family business is run by family members who rely on family relationships and roles instead of good business principles. The Friendship Model is riskier because it’s more easily broken apart. Poorly run family businesses stay together but become highly dysfunctional.
One of the things I realized early in my own business is that I can’t be good at all aspects of running my company. My business works best if I stick to what I’m good at and outsource some functions or get professional assistance in areas that aren’t my strengths.
If you’re working with an accountant or banker, ask that person to recommend a good business consultant who can meet with you periodically to help you set up some infrastructure. It will be more acceptable to your other two partners if this guidance comes from an outside expert. If you wait for a communication breakdown to happen before you seek counsel, it may be too late.
A good place to start is to set up some business planning meetings with your consultant to create some basic operating systems. Some of the areas in which you’ve already had power struggles is a good place to start.
Here are some suggestions:
- A long and short range business plan, including a marketing plan and budget.
- A clear definition of roles and responsibilities. Just because each of you owns a third of the business, it doesn’t mean you all are doing one third of the work. One of the biggest problems in partnerships is caused when one person does more work and resents it. In addition, because you are in a location by yourself, you run the risk becoming isolated from the two partners who work together every day.
- Set some goals that are appropriate to the size and scope of the studios. Make sure that objective measures are in place. Without them, arguments can erupt over who gets what revenue to spend on what, and which store is doing better.
- Establish a decision making system for making key decisions or purchases. For instance, you may want to require a consensus on key decisions such as large purchases, vendor selection or employee benefits. Spell out the kinds of decisions each store has authority to make, such as employee hiring and terminations.
- Establish a formal meeting schedule. For example, quarterly meetings to review results (perhaps with your accountant present for the discussion) and monthly meetings to review operations and financial results. Weekly meetings to discuss day-to-day issues may also be in order. Because you are geographically separated, face-to-face meetings will be important to keep trust high and communication open and current. Establish an agenda and agree to stick to business, rather than sliding into friendly chatter. If you need the socializing, meet for lunch or breakfast.
I urge you to find a consultant who is willing to teach you and empower you. Avoid consultants who want to make you dependent upon them. If you find the consulting is valuable but becoming too expensive over time, it may be a signal that you need to hire a business manager to help you manage your growing business.
Joan Lloyd is a Milwaukee based executive coach and organizational & leadership development strategist.
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