The Benefits of Having a Company Run by Two Owners
They say two heads are better than one, but also warn about having too many cooks in the kitchen. There are distinct tax and financial benefits to forming a partnership—such as a greater borrowing capacity and simplified taxation—but what are the non-financial advantages that make a good argument for partnering up?
There are a number of relative merits to weigh when it comes to deciding if a multi-owner company is what you want for your business. Distinct benefits do exist with multi-owner companies though, that can accelerate business growth and make for an overall more satisfying business owning experience.
Built in Sounding Board
Every executive needs a sounding board. You have a ton on your plate…and on your mind! You need someone who can help you sift through the chaos and quickly help you gain clarity over your thoughts and the resulting action, so results can be accelerated and come to fruition.
No matter how intelligent or business savvy you are, everyone is naturally limited by their own perspectives. The way you think, feel, and act are all linked to your own past and present experiences, making them naturally biased to a certain way of thinking.
So, because (1) we as humans are limited in our ability to see past our own biases and (2) business owners often have so much on their plates, it helps to have a partner who can act as a sounding board. Your partner, after all, can bring a little more objectivity into your line of thinking. Plus, you know that his or her loyalty is to the success of the company, so there is no need to worry whether the feedback they provide aligns with the company’s greater vision.
The Visionary and the Integrator
Each one of you will bring unique talents to the business. Quite frankly, it is unlikely you and your partner will have the same top skills and expertise. Where one partner lacks, the other may naturally compensate. Where one partner struggles, the other excels. These differences can create a powerful dynamic in the workplace.
In his wildly popular book, Traction (2007), Gino Wickman identifies and explains this dynamic by categorizing each partner either as a “visionary” or an “integrator”. As he describes, “The visionary and the integrator couldn’t be more different. The visionary typically has 10 new ideas a week. Nine of them might not be so great, but one usually is, and it’s that one idea each week that keeps the organization growing. For this reason, visionaries are invaluable. […]
“By contrast, integrators are typically very good at leading, managing, and holding people accountable. They love running day-to-day aspects of the business. […] In sum, they operate more on logic” (94).
When a company has a visionary without an integrator, Wickman explains that companies find it hard to gain traction. The visionary constantly grows frustrated with his or her having to pull away from the creative side of the business to act as the integrator on the other. To get to the next level in business, entrepreneurs often have to make sure that the integrator role is well covered, or else all the great ideas in the world mean very little. The good news is that when these two roles align together in harmony, the results for the business are undeniable.
Divide and Conquer Mentality
As your company grows, you’ll find that the workload will increase and your capacity will diminish as your time is filled with more and more to do. As a single person, it is difficult to handle the growing demands on your own. You may feel like the visionary pulled to act as an integrator, or as an integrator stifled by a deluge or influx of activities.
With a partner, you can work to effectively delegate tasks between the two of you to conquer more with less effort. This of course works best when you have identified each of your greatest strengths and delegate the tasks that capitalize on those strengths appropriately.
Two capacities are greater than one. And with both a visionary and integrator on board, you can delegate the tasks that are best suited and best handled by each co-owner. This keeps each owner engaged, each owner satisfied with their job responsibilities, and helps reduce the potential for burnout.
Is a Partnership Right for Me?
There can be great benefits to partnerships in business, just as there are in life. When highly driven and motivated individuals align to pursue a common goal, their varied skillsets, knowledge, and experiences can combine to increase the company’s probability of success.
Of course, it takes time and patience to find the right partner, as well as decide on the best legal and tax structure to use once you have. Make sure you have personal clarity on your long-term goals, your own unique skills, and your financial capabilities before entering into a partnership with either your own or someone else’s business. Remember, your financial advisor can serve as both your sounding board and your financial navigator as you consider starting a partnership in the future.