Tuesday, May 18, 2010

The 3 Essential Elements of Business Partnerships

1. Time
2. Experience
3. Capital

Any business needs all 3 elements in order to function.

A partnership where all the partners have lots of free time on their hands, but no capital or no expertise will not get anywhere. A business will need a sufficient amount of all 3 basic elements in order to succeed.

Therefore these are the ultimate criteria for selecting business partners in any venture.

The reality of it is that we all start out in life with little capital and little expertise. The only thing we have to offer is time. and so in the early stages of life you would look for partners who have capital and expertise but lack the time to manage the ventures.

As you grow older you gain expertise and hopefully some capital. and at the same time, you have less and less time to spare. This is when you start looking for partners who have time but lack capital or expertise.

If the partnership is rich in one of the 3 elements bringing on more partners with more of the same element will dilute the partnership and offer diminishing returns on that element provided.

so the idea is to always strike a balance, a balance that is different depending on the venture.

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