In 2012, when I started preparing to open a gym, I was overwhelmed. I had coached cheerleading for many years, but it was mostly sideline. I had a good stunting knowledge, but my girls didn’t often tumble. Those who did came to me from another nearby program that offered only tumbling and had little interest in expanding to cheer. Like me, the head of the program was a contractor at the local Air Force Base where my daughters participated in my cheer program and their tumbling program. So, I knew I would need someone who knew tumbling and could teach me the ropes. It didn’t take long for me to also realize my mind was more at ease when I thought about bringing on a business partner. 

In reality, I knew that by having a partner, I wouldn’t have to go through the scary parts of entrepreneurship alone. I would have someone alongside me who was just as invested as me and could share the burden. 

Those who have a business partner can see I was clearly naive. Now, I’ll preface that the same partners I opened my gym with back in 2013 are the same partners I have today. We’ve weathered some major storms, but we have made it through. However, most are not that lucky.

Here are some stats: 

  • 20-30% of partnerships dissolve in the first year
  • 50-70% of partnerships dissolve by year 5
  • 70-80% of partnerships dissolve by year 10
  • 85-90% of partnerships dissolve by year 15

You may have read those stats and thought “Well, 15 years? That’s great! That’s a long, successful business.” I did too. But the reality is that just one in 10 people actually make it to year 15 with the same partners they began with.

What I’ve Learned from My Business Partnerships

I’ve now owned four businesses with partners, and I’m here to tell you, it’s not easy.

Twisters

Twisters began with four partners: Justin and me, Angie and her husband, Dustin. All four partners are still thriving today, and we recently sold a small percentage of our shares to Melanie as a fifth partner. Our systems are on point. We have a clear organizational structure and rarely question who is doing what when it comes to owners. We meet every week with a fairly structured meeting (and truly just to catch up and know what’s happening in one another’s lives). We’ve done this for years. 

We have had some major challenges and hiccups—one of which happened just a few months before COVID and was, by far, the most challenging thing I’ve ever experienced in business. I’ll add (especially for those who have known me for a number of years), along with our initial partnership at Twisters, the four of us together have also owned a restaurant for five years and a property investment company. When a partnership works, it just works!

Next Gen

Next Gen began with five partners. Four of the original remain, and the fifth’s shares were sold to Dan, who had worked with Next Gen since inception. Talk about challenges … Imagine five gym owners in one room trying to make decisions for a company. There is no doubt we had our years of challenges. The biggest challenge with systems is that you have to do something once or twice to actually be able to systemize it. For the first few years, everything felt new. In 2018, we had all run successful gyms, but never a business with remote owners and staff. We had never run conferences. We had never built curriculum on how to grow a gym. We had experience—but it was five different versions of similar experiences. 

Business owners tend to be jacks of all trades, which can make it difficult to find your best place within a business. I am capable of operations. I’m capable of sales. I’m capable of running large-scale events like our conferences. I’m capable of marketing and running finances. Heck, I’ve done all those for my gym in one capacity or another. Shelley, Riana, Dan and to-an-extent, Justin, have all the same experience. So finding our best suited areas was a major challenge. It wasn’t just about finding what we were best at; it was also about filling weaknesses in the company and finding roles we actually enjoyed. We’ve been pretty open about the fact that we had a business coach for Next Gen who helped us develop our internal structure and systems. An outsider was vital to helping us establish organizational structure and see within us what we couldn’t see ourselves. This structure has helped immensely. That isn’t to say that it was ever easy, but I consider this six-year partnership a massive success due to the transparency, systems and organizational structure. 

Unnamed Media Company

I started a company with a close friend and an acquaintance in 2018 around the same time Next Gen was born. It turned out to be a major challenge to work alongside a good friend. In fact, you might think she and I agreed on everything and would leave out the third partner, but you’d be wrong. In fact, we failed to develop the organizational structure early on for fear of overstepping and hurting feelings. 

Instead, we were naive, thinking we could make a business work simply by passion and friendship alone. Though I knew the structure needed to be built, we got in the weeds of building the new business. I was spending more time on the day-to-day work in the business and not nearly enough time building systems. As a result, I sold out of this company just 18 months after it began.

Extreme Deals

You likely haven’t heard of this company because it was a local wholesaler auction business. Basically, everything you return to Amazon doesn’t go back to a warehouse. It goes on a truck and gets sold as random pallets of stuff. Companies buy the pallets and put the individual items on auctions. It’s actually a cool business model, and a real-life “unboxing” happened every few days. Justin was totally into this, and it definitely satisfied his excitement in business. 

From day one, this business was built as a strategic partnership. Justin and I knew how to start new businesses and get them in working order. Our partners knew the wholesale business and industry-specific details. We ran this business for exactly one year and then sold our shares to our partners. This was a solid partnership. They trusted our skills in business, and we trusted their skills at finding cool Amazon stuff. During our year in the company, we set up the business structure, built up their marketing, hired staff and created procedures to streamline the business. I’m proud to say they’re in the top five affiliates in Kansas City for their business today. Occasionally, our former partners will ask a business question, and I happily answer. More often, Justin “supports” our former business with random bidding on items we don’t really need.

I gave you these details for one reason. Do you see a trend? I sort-of knew most of my partners along the way. I wasn’t family or best friends with most of them. So, that’s not what I’m trying to show you. Instead, I want you to see the following: 

  • One or more of the partners focused on developing systems.
  • We created and respected the organizational structure. (That also meant in some roles we were in charge of one another, and that’s OK!)
  • We respected one another’s strengths and knew what skills each of us brought to the table.
  • We knew where we wanted to go with the business and worked together to get there.

If you’re currently in a partnership, and it’s a struggle, look at the points above. Do you have those items in place? Whether your partnership is with a friend, sibling or spouse, you have to build a structure that you can agree on. Without this, you will go down a very long road with an unclear path ahead.

Next week I’ll give you some pros and cons of these business partnerships and talk specifically to those who have a spouse as their business partner.