Business Partners | Do They Ever Work Out Well?
The video Matt watches says that business partners, especially if you are the financier, are critical. Matt believes the operational partner is the most important part and shares the dangers of having a business partner.
There are tons of people out on social media giving business advice. Some of it is good advice, but most of it isn’t good. In this series watch CapForge’s owner react to different advice videos. He’s an expert in all things business and has 20+ years of experience under his belt. Some of the things he reacts to might even surprise you!
Video Transcript:
Business Advice Video:
Every time I start a business, I bring the funding and there’s other things I don’t bring, right? So I need my operational partner to bring those things. I don’t do anything alone. I have operational partners in everything that I do. I never just decide to start my adventure by myself. I’m a big believer in operational partners because it’s gonna help you be able to actually grow and create something to fruition.
Matt’s Review:
Okay, yeah I mean, really the person who can run the business I would say is the most important part of the business. Somebody who brings money and no other real value is – it may seem like a big deal when you’re the person trying to start something and you don’t have money. Somebody who comes in and says “Oh yeah I can write a check for 100,000 or 300,000 to help this business get started.” That seems like a lot, like you’re like “How would I ever save $100,000?” But the reality is once you get the business up and running and start making money, then what they added at the beginning is not any longer – they’re not bringing any more value right now. You’re doing all the work. You’re there every day. You’re running things. You’re growing things and now the money is a lot less critical. But they’re still taking their 50% of the profits or whatever the agreement was. And a lot of times that starts to build resentment. And so it’s one of the reasons I think the best partnerships are formed when both partners are contributing equally for the long term and the business needs both partners to succeed. When one person just writes a check and then walks away and the other person does all the work it rarely turns into a successful long-term partnership, because it’s unequal. It’s same as romantic partnerships or friendships when one person is more invested than the other person. It rarely works out well and in this case, the person doing the work is the one more invested. You might think the one with the put the money in is more invested, but that money didn’t mean much to them. They could live without it. It wasn’t a big deal and that’s all they contributed. And time and effort and skill is much more valuable in my mind. So if you’re the person with the skills and you’re gonna run the business, try to look for money that you can pay back and then be clear of. Because if you’re taking on a partner who’s gonna be a part owner but not involved and all they did was give you the money, sooner or later that’s gonna be a partnership that falls apart I think.
