I get asked all of the time, what works best? A collaboration or partnership? I am currently collaborating on a creative project and will not form another partnership. I've had several partners, and I can definitely say that it doesn't work very well. For one thing when you form a partnership, you create a marriage of sorts that includes mixing finances and needing to agree on how to manage not only money but time and resources. In a collaboration, you keep out of each other's business and focus exclusively on the project at hand. If you're considering one or the other, here are some important points:
Ethics -- this one came home to roost. What is your prospective partner's ethical and moral outlook? Why does this matter? Well, if one person isn't particularly ethical in their treatment, for example, of clients, this behavior will affect your brand name. While one partner may act in one way, the other's behavior can definitely influence prospective client's decision-making process about that company. I certainly had enough people make me aware of such negative fallout. The problem for me is that people were warning me that while I might be acting with integrity and respect toward my clients, any negativity word of mouth from another person's action would absolutely hurt the business. In fact, when my problem was resolved, I had clients who had worked with me in the past, return to work with me.
Finance and ethics -- these two areas come together. It's unwise to allow the finances to upend. While your motives might be good to constantly invest more than the other partner, it's not a good idea for the long-term health of the relationship. When one or the other goes upside down and your profit-and-loss sheet reflects that one partner has clearly invested much more in the company than the other, unless the other one brings in valuable intellectual capitol and the other one is suppose to be the financier, this model doesn't work. Over time, the inequitable nature of the relationship will erode it. If your agreement is that one person is the financier, then a contract should be drawn up to reflect the investment difference. But a partner that simply shuns the responsibility of financing his or her half of the company and relies on the other person's generosity and goodwill, is just taking advantage. Avoid the problem by holding both parties equally accountable regardless of what excuses and justifications may be put on the line. Or redefine your partnership to reflect the financier model.
When to just collaborate -- If your business is established and successful, there is no reason to bring in a partner at all. If you need an infusion of cash to grow the business, then consider the financier model. But if you're creatively working on a project, keep the relationship strictly based on that project. Do not mix finances. Just keep it all separate with a 50/50 split in expenses. Do not open a bank account. Do not mix funds. Again, it's all about the project. And I largely recommend the collaboration instead of the partnership if you just want to keep it casual and produce a project in harmony.
Watch out for the partner hang-er-on-ers -- If your business is successful you will have people come out of the woodwork to ride your coattails. People will suggest partnering with you all over the place. Of course they will. It's easy street, and they can smell success. If someone wants to come work for you, great. If you need help, hire it. But watch out for so-called prospective partners who are the equivalent of business vampires. They will suck your business dry. They will want you to constantly prop them up; emotionally blackmail you to give them more; and try all sorts of ways to get into the driver's seat and crash your company. So, if you have a lot of folks proposing partnerships, simply turn them away, and take it as a good thing that clearly your success is an attractive, shiny thing they want a piece of, but don't give it to them.