My Best Employee Wants a Partnership
Retaining employees that go above and beyond the call of duty is a blessing for any company owner. Sometimes, these employees are so invested in the business that they want a piece of the pie. While situations like this can pose challenges, as long as you do things right, a business partnership can be mutually beneficial.
A partnership can mean job security, better employee benefits, and higher pay for them. A partnership can mean a load off of your shoulders as the business owner, enabling you to grow the business even further.
Before you jump into a partnership, obviously there are a few things you need to consider. As with any aspect of business management, honesty is the key to successful relationships. Here are some questions for you to consider before you make the partnership decision for your business.
Is the employee ready to become a partner?
What specific things has the employee done to prove to you that he or she deserves the partnership? Becoming a partner is obviously a big promotion and should warrant higher performance and revenue generation. Asking for a partnership is not the same as simply requesting a raise.
If you don’t see the qualities you expect from a partner in your employee, let them know what they are. Tell them that you’re open to the idea of the partnership when they exhibit these qualities consistently.
READ MORE: My best employee wants a raise
What are the costs and benefits of making your employee a partner?
This question doesn’t have to be complicated at all. It’s very straightforward and simple economics: will making them partner generate more revenue and grow the business more than as things stand now? If the answer is yes, they might be ready to become a partner. If the answer is no, let them know what they can do to get there.
As with giving out raises, answering these types of questions honestly, can be more difficult if the friendship or bond you have with the employee is strong. Remember, to succeeding in business you have to balance your emotions with the fact that you need to achieve a certain bottom line in order to stay in business.
Does the employee understand what new responsibilities will be expected of them as a partner?
This one is crucial. It falls on you as the owner and business management professional to make them aware of your expectations and how you’ll measure their success.
What type of company do you own?
Whether you’re a sole proprietor, an LLC, an S corporation or any other type of company, your employee will need to understand what comes along with being a partner—now and in the future. Whether that means vesting in the company and eventually forming a board of directors or maintaining a sole proprietorship and building on that.
Forming a partnership can be rewarding and beneficial for both you and your employee. If you follow these questions, you should have a solid start in judging whether or not forming a partnership with this employee is a good idea.