Canadian Advisor Cautions Entrepreneurs to Take His Test Before Financial Consummation
TORONTO, Nov. 20, 2018 /CNW/ - Getting into a business partnership is a lot like dating, there's an attraction, a courtship, a financial consummation and a honeymoon period. But after the mutual infatuation fades, entrepreneurs are often left in awkward, unhappy and unfulfilling "marriages" with their partners. Concerned that many Canadian Entrepreneurs may be jumping the gun into potentially bankrupting business partnerships, Canadian business advisor and valuator Patrick McCabe has created a modern, simple and decisive partnership compatibility test that he is asking all Canadian Entrepreneurs currently considering partnership to complete.
The Partner Pitfalls Test was developed by McCabe and Dr. Yashar Khosroshahi, ND, ACC, a brain-based Executive Coach specializing in using science to empower better business decision making. The 12-question test covers a wide range of personality-related questions based on 4 key psychological brain-points including:
- Meta emotions:
These are your own actual emotions and your understanding of your emotions and the emotions of others.
In the context of being a partner, this is the ability to run your side of the business with or without major input or direction.
This is the structure and confidence that you communicate to your staff about the workplace, your business stability and your future plans.
- Grit and The Big Picture:
This looks at how you handle major challenges and stress challenges.
Prospective partners are encouraged to download the PDF test on the McCabe Valuations site here, fill it out and compare answers to get a better insight into what a business marriage would be like, before it turns into a business divorce.
"This exercise will require a fair amount of personal insight, honesty and a willingness to share openly with your potential business partner," said Patrick McCabe, creator of the Partner Pitfalls Test. "No test can predict every potential disagreement, but we think this is a smart way to flag the potential conflicts that could cause friction in the future."
"The test score can be a great starting point to gauge partner compatibility, but even more important is the commitment of partners to communicate and set up rules about conflict and conflict resolution," said Dr. Yashar Khosroshahi. "One of the biggest predictors of success in a marriage is how well couples fight and how they narrate their conflict history. A successful business partnership operates on many of the same points."
Poor Partnership Planning
Outside of the test, McCabe suggests that there are some common poor partnership planning issues that he has seen routinely lead to nasty business divorces:
- The Sweat Equity Suck:
Young friends start a company and allocate shares based on sweat equity. No proper shareholders' agreement is set up or the agreement is too simple to address issues that could arise in the future. Then, one of the shareholders decides to take it easy for a while and sit on his shares while the other partners continue sweating away at the company and generating growth. This scenario ends with all partners unsatisfied. Partners need to understand that dynamics can change in a very short time if the company sees financial success.
- The Family Business Fumble:
A family business has operated for a number of generations and family members have remained actively involved. They still consider it to be a small operation despite huge financial growth. If a family member wants out to pursue a different career, other family members running the business are still in the mindset of 'this is a family business, it's not worth anything', or they are looking to sell a part of their business to retire and haven't assessed how the business might operate with a new a shareholder that isn't a family member.
- The Black Sheep:
A family member starts a business, throws a bone to the 'black sheep' of the family by gifting them shares in the company. They assume that the 'black sheep' will never want an active role in the business or a say in company decisions. This initial act of good will inevitably come back to haunt the company and can cost significant company funds to settle.
"I advise clients to have an ongoing understanding of their company/share value as a business goes through growth and business cycles," added McCabe. "Clients rarely do and it's a bit of a shock to the system when there is a mandate to buy/sell shares in the company and a valuation is performed. A little work upfront to structure the partnership agreement for growth and change can be worth a lot of saved conflict later."
SOURCE McCabe Valuations
For further information: Patrick McCaully, Pointman News Creation, [email protected], www.pointmannc.com