Nathan and I are trying to assemble a team of professional helpers and counselors for our new business. Here's the list of positions we have been working to fill: a lawyer, a CPA, a insurance agent, a graphic designer, a manufacturer, a banker, and a couple of business mentors (and some others too, but they are less important right now).
As great as it will be to eventually have relationships with all of these people and reap the benefits of their expertise, there is another thing to keep in mind: nearly all of them need to be paid, but since we haven't launched the business yet, we don’t have any income to pay them with! And since we all know the scenario below ISN'T true...we needed a solution.
Recently, I met with someone who recommended a creative solution to this very problem (assembling a professional team on a shoestring budget), and I wanted to share it with you!
In a nutshell, here's the idea: Instead of hiring professional help to perform professional services for a certain fee, bring them into your business as a partner, and exchange their work for a percentage of your profits.
The person who said this to me was one of the lawyers I was interviewing. When he mentioned the possibility of Nathan and I bringing him on as a partner instead of just paying him for his services, I thought to myself, "If I share my profits with other people, then they can vote on my business decisions, and I don't want to give up control of this business - no way!"
If this was your reaction too, stick with me and keep reading. You might be surprised...
I didn't tell the lawyer what I was thinking when he mentioned it, but he must've known I wasn't excited, so he explained it to me. He said, "If you want to use me as your lawyer only and not as a business partner, then I will certainly do my best for you, but our relationship will remain in the 9-5 world."
"Yeah, of course," I thought. But then he went on.
"However, if am a profit-sharing partner in your business, I will work hard for you from 9-5, and then what do you think I'm going to do in my free time (after 5pm)?"
"I'm going to be talking to people about your business! I'm going to spend time at the library learning more about legal matters that apply to your situation! I'm going to do all I can to help make you successful, because I will get to share in the profits!"
And THAT made me stop and think.
The thought of having a professional using THEIR resources, THEIR networks, and THEIR connections, and THEIR time to find opportunities that could help OUR business grow made me excited! Additionally, the thought of having a professional passionately working for our business made me feel almost giddy at the level of excellence they would bring to their work and the benefits Natril Gear would gain from it.
And then, I immediately thought to myself, "But what if we become like Facebook and grow into an enormously profitable company? I'd be overpaying them by millions...BILLIONS even!"
Me --> Them -->
It seems the lawyer saw that thought cross my mind too, because then he started explaining the legal aspects of these potential partnerships. He said, "You can write a contract with the people you want to make business partners and have it be renewable annually, or you can just have a clause that says you can terminate the relationship at any time. This way you don't get stuck with a business partner you don't want. And you also have the choice to make them voting members or non-voting members, so you can retain as much control as you want over business decisions, too."
OOOOOOhhhh, right - I get to write the contract! I can set the terms, the time limits, the percentages, the expectations, everything! ...And I started picturing myself in a room with a big table and all of these amazing professional people around me giving me advice and working diligently and passionately within their areas of expertise for our business. Then I pictured myself putting my hands behind my head and nodding happily as I remembered that I never needed to pay up front for services. No one around the table knows if Natril Gear is going to make money or not, but with professionals working on key areas of the business instead of me, the chances increase that we’re all going to win! ...This idea was coming together like peanut butter and chocolate. :-)
I smiled and told the lawyer he was beginning to change my mind about partnerships.
He said he's seen a lot of great businesses start this way, and he thinks it's a great idea. He said that a good business idea attracts good talent. Good talent makes the business grow. A growing business attracts better talent. And the whole thing grows on its own. All you need to start with is a good idea, and he said he thinks we have one!
My interview/meeting with this lawyer lasted three hours(!!), but it was a pivotal three hours, and I went home and excitedly told Nathan about the idea of forming business partnerships.
To read about Nathan's and my conversation, learn about additional business partnership options (yes, there are more options!), and find out how Nathan and I have decided to implement the idea of strategic partnerships in our business, stay tuned for our next post!