Nduta's 2CentsOpinion

Factors to consider when Partnering in Business: Kenyan Edition

A partnership in any business is very similar to marriage. Two people merge their interests and assets to work towards a common goal. The business is their baby. It needs their attention and care in more ways than one.

I’ve watched ideal businesses disintegrate for various reasons but poor partnerships takes the cake. You could have an amazing product or service but your partner holds you back either through poor people skills when handling clients, financial dishonesty, or worse sabotage.

Here are few factors to consider especially in a Kenyan setting.

Agreement terms

From day one, have a drafted ‘Terms of Agreement’. You may laugh and say you don’t need it. Case in point, every corporate relationship is governed by a set of rules and conditions. It would be best to agree on this early on because you’re both a product of different environments. I dare say your normal is not another person’s normal. By sitting down and agreeing on how various aspects of the business will be carried out and giving written solutions to anticipated mishaps could save you a whole lot of head and heart ache, as well as money.

Proper Definition of Roles

Roles go beyond names. I’m referring to outlining both the expected and actual roles of each partner. This is a common mistake especially when founders are more than one. Such an example is a friend who began an NGO that genuinely had a good cause but wranglers began when her business partner went ahead to make shady business deals and sought seed funding without notifying her. Adding salt to injury, her partner thought of herself as the CEO whereas my friend claimed it was her idea from the start. You can imagine the sense of loss my friend felt. This is quite a significant factor so do consider.

Clear product/service pricing

I’m sure by the time you’ve agreed to do business you have a clear business plan with a detailed revenue model which requires a set product price that considers the day to day expenses of running the business. By having a set stand on pricing for the business inventory, you’re proactively averting losses that are incurred when giving discounts. Discounts to friends/family should also be agreed on formally. Remember it’s a business not a charity.

Connect with your partner

I know it’s sounds oddly intimate but refer to first paragraph where I refer to to a business partnership as a marriage. It calls on you to have an actual relationship with the said partner. Know them beyond business: understanding their fears, spending habits, strengths as well as weaknesses. Spot bad friendships that could negatively affect your business. Nairobians have a common habit of directing profits to a lavish lifestyle because aye you’re Mr. or Madame CEO you have to have a certain type of phone, wear certain types of clothes, drive a certain type of car as well as live in particular neighborhoods. Once you identify such problematic mentalities early, you’ll know how to approach them when they surface as opposed to stumbling upon them.

It can also call for measures such as stringent procedures for either party to access the company funds.

Exit plan

Lastly, an exit plan is a must-do/have. You don’t know where the company will be at in the next five years. Maybe you’ll fail or maybe you’ll build a profitable business. So decide on your exit plan terms early when you barely have valuable shares. Decide in different scenarios whether it’s in case of a buyout  or merger or when filing for bankruptcy (worse case scenarios are very much possible)


Did I miss something? Or so you have a personal experience you’d like to share? Talk to me via email on ndutah@tech-ish.com or on Twitter @sndutah. Till next week.

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