Tips for successful partnerships

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Normally when it comes to our investment banking column, I leave it to my IVS Investment Banking partners Thomas Brinsko and John Zapalac. This issue, they have graciously allowed me to share a few thoughts with you about investments and partnerships that go far beyond the topics we normally write about such as selecting an intermediary, recapitalization or valuation of a company.

I would like to begin this article by quoting tip No. 71 from the “Wisdom in Quotes” section of our “Earl’s Pearls” book. “Better a thousand enemies outside the house than one inside.”

Next, I would like to define three words: careful, invest and partner. “Careful” is defined as watchful, cautious, wary, dealing thoughtfully, guarding against possible dangers or risk. One definition of “invest” is to spend time and effort with the expectation of some satisfaction. An example is putting money into a business for the purpose of obtaining income and profit. Now let’s take a look at the word “partner.” This is a person who takes part or engages in some activity that is common with another. Or it is one or more persons engaged in the same business enterprise and sharing in its profits and risks.

There are two types of partnerships — family partnerships (such as a husband and wife) and business partnerships. Whether it is a family or business partnership, the keys to peace, happiness and success are the same — faith, trust and equal treatment of everyone involved.

In Grant Gordon and Nigel Nicholson’s book, “Family Wars: Classic Conflicts in Family Business and How to Deal with Them,” they say there are two aspects to conflict. One is the content issue, where people want incompatible things. But, the real killer is trust. Lack of trust comes from whatever leads one person to see another as unreliable, inconsistent, devious or duplicitous. My wife, Bodi, and I have seen several family partnerships fail because of trust. The same is true in a business setting. Once trust is gone, conflict arises.

Another kind of conflict can arise when a member of the family or the business partnership is not seen as pulling their weight and one person feels they are the one carrying all the weight.

The best way I know to prevent conflict is to have a clear evaluation of our partners’ expectations and a willingness to resolve and openly discuss partnership conflicts before they disrupt a smooth operation.

For more information on how IVS Investment Banking can help your company, contact Thomas Brinsko at (281) 538-9996 or tbrinsko@bicalliance.com

by Earl Heard

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