Partnership in Business: Starting a Business Partnership
Phil Bird, with over 30 years of IT experience, discusses his entrepreneurial journey, including starting and selling a software company.
He emphasizes the importance of flexibility, realistic sales projections, and shared values in partnerships. Phil highlights the necessity of a deadlock clause in partnership agreements to resolve disputes.
He also shares his passion for nature and plans to start a rewilding project. He emphasizes the importance of flexibility, realistic sales projections, and shared values in partnerships. Phil highlights the necessity of a deadlock clause in partnership agreements to resolve disputes.
He also shares his passion for nature and plans to start a rewilding project.
Index:
- You will learn what key factors to consider when creating financial projections
- During a credit crunch crisis, you must ensure adequate funding!
- Business Partnerships: what should you look for when looking for a partner
- Business Partnerships: when disagreements arise between partners
- Partnership in business: what technologies have you seen make the biggest impact
- Recap
You will learn what key factors to consider when creating financial projections
Be realistic about sales projections; Phil notes that it is pretty easy for entrepreneurs to be overly optimistic about the sales they can generate, especially in the initial stages. He advises being more realistic and conservative in sales projections rather than inflating the numbers.
It would help if you considered worst-case scenarios. Phil emphasizes the importance of thinking about the worst-case scenarios and how long the business can survive before reaching profitability. Entrepreneurs should plan for the possibility that it may take longer than expected to generate the anticipated sales.
During a credit crunch crisis, you must ensure adequate funding!
Given the potential for slower-than-expected sales growth, Phil recommends ensuring the business has sufficient funding and cash flow to sustain operations until it becomes profitable. Underestimating the capital required to reach profitability can be a critical mistake.
Avoid overcommitting, and he suggests that entrepreneurs should be cautious about adding too many expenses or headcount based on optimistic sales projections. It is essential to maintain financial discipline and not overcommit resources until the business has proven its ability to generate the expected revenue.
Phil’s critical advice is to be realistic, plan for the worst-case scenarios, secure adequate funding and avoid over-committing resources based on overly optimistic financial projections. This approach can help entrepreneurs better navigate the initial stages of building a successful business.
Business partnerships: What should you look for when looking for a partner
Regarding existing relationships and trust, Phil mentioned that his partner was someone he had previously worked with, so they knew each other well and had a good relationship. Trusting each other and having similar values were important starting points for their partnership.
What my partner can do and what my strengths are are essential. Phil emphasized that having different skills and strengths between the partners was valuable, as no single person can be good at everything. Leveraging each other’s expertise and making the best use of their combined capabilities was seen as incredibly valuable.
Is your vision aligned? It is so important to have shared goals and vision. Phil noted that partners should have common goals and a shared vision for the business, whether it is building a lifestyle business or a large enterprise.
Aligning the long-term objectives and plans for the company is crucial to avoid conflicts down the line.
Phil looked for a partner with whom he had an existing relationship and trust, complementary skills and a shared vision for the business.
He stressed the importance of having these elements in place, even if the partners had been close friends for a long time, as running a business can put significant strain on a relationship.
Business partnerships: When disagreements arise between partners, you are going to hear about the benefits of a deadlock agreement
The deadlock clause is agreed upon upfront and is part of the shareholders’ agreement, which is established when the partners are still “the best of buddies.” This ensures the resolution process is agreed upon before any conflicts arise.
You will find it avoids messy and costly disputes. Without an explicit deadlock clause, disagreements between partners could lead to expensive legal battles and a messy situation. The deadlock agreement helps avoid this by outlining the steps to be taken.
It also provides a clear path forward; the deadlock agreement typically specifies what will happen if the partners cannot reach an agreement, such as buying out the other or selling the business. This gives a defined resolution process.
Ideally, it preserves the relationship. By having the deadlock agreement in place, partners can focus on running the business rather than getting bogged down in disputes. This helps maintain the overall business relationship, even if the partnership ultimately needs to be dissolved.
In summary, the transparent processes outlined in a deadlock agreement can help partners resolve disagreements in a structured way, preventing the breakdown of the business relationship and ensuring a smoother transition if the partnership needs to end.
Partnership in business: What technologies have you seen make the biggest impact on efficiency and costs for SMEs?
In Phil’s current business, he helps SMEs (small and medium-sized enterprises) make the most of various technologies to improve their efficiency, security, and cost-effectiveness. Specifically, Phil mentions the following technologies that have made a significant impact.
Phil suggests that many SMEs still have on-premises servers in cloud computing, and moving some or all of their data and infrastructure to the cloud can be a more secure and cost-effective solution.
When a company is cloud-based, it enables remote work capabilities. Phil emphasizes the importance of helping SMEs adapt to remote work and ensure they have the necessary tools and security measures in place to work efficiently and securely.
His business provides expertise in IT and telecoms to help SMEs optimize their communication systems and infrastructure.
More than ever before, Cybersecurity is a huge must for any business; he helps SMEs have the proper cybersecurity measures in place to protect against data breaches and other security threats is a key focus area.
Overall, Phil’s approach seems to be tailored to the individual needs of each SME, helping them identify the right combination of technologies to improve their operations, reduce costs, and enhance security.
partnership in business: To Recap
In this insightful conversation, Phil shared valuable lessons and perspectives from his entrepreneurial journey, particularly the importance of partnerships in building a successful business.
Phil’s experiences starting his first company, both the successes and challenges, highlighted the need for flexibility, realistic planning, and clear communication between partners. He emphasized the importance of aligning on shared values, goals, and decision-making processes, even going as far as to recommend having a “deadlock agreement” in place to address potential disagreements.
Phil’s current work in helping SMEs leverage technology shows that he has applied these hard-won lessons to support other businesses in becoming more efficient, secure, and cost-effective.
His focus on tailoring solutions to each client’s unique needs demonstrates a nuanced understanding of the diverse challenges entrepreneurs face.
Overall, Phil’s insights underscore the value of learning from one’s mistakes, maintaining an open mindset, and prioritizing the health of the partnership when embarking on an entrepreneurial venture.
About Michael
Michael Crane
Entrepreneur, Business Owner, PresenterMichael has built and runs a successful business for the last twenty years. He’s learned many lessons—some of them the hard way—and he’s met and talked with many other businesspeople. He’s sold thousands of products and learnt the one hundred and one things needed to run a thriving business. Now he’s bringing this knowledge and experience to educate, motivate and inspire other entrepreneurs.
Episode 62 Learn why waiting for burnout to happen is a recipe for disaster and discover ways to avoid it
Episode 61 Why Focusing Solely on Sales Could be Killing Your Marketing Efforts
Episode 60 Motivated Finn Crane, hear how he will Achieve His Dreams!
Episode 59 Business Productivity, Processes and Reducing Risks
Episode 58 POSITIVE ATTITUDE, what does this mean to you?
A Positive Attitude is an essential part of personal growth and success. Find out what…
Spotify
iTunes
Amazon Music
Anchor
Breaker
Google Podcasts
Deezer
Podcast Index
Blubrry