Matthew has been a friend now for several years and it’s been fascinating to watch how he works with other people. He always seems to have dozens of projects going on, unified by the concept of modern, healthy food. He’s a very well known chef in the realm of raw and vegan foods, involved with restaurants all around the world. www.matthewkenneycuisine.com
As I mentioned last post, I’ve been working through conceptualizing business partnerships in a new way, and while writing, I realized the person I most want to ask advice from was Matthew. And so:
Q. You’ve had a lot of business partnerships over the years. Are there red flags you can identify early on in the process before going into business with someone?
A: There are many red flags prior to entering into partnerships that aren’t meant to be, and they can usually be found from within. Like any relationship, we intuitively know if we’re comfortable and aligned with the person or group we’re about to join. Some of the more obvious ones are not sharing the same long term goals or having much different taste or style. On a more subtle level, you must respect your partner and they must respect you. This is more of an art than a science unfortunately.
Q. What elements (legal, financial, personal) need to be in place before you proceed on a partnership with someone?
A. Regardless of how much legal work you invest into a partnership, they will either work or they won’t. The most important legal aspect is an exit strategy, should things not work out. If all goes well, it’s pretty easy to manage. Financially, it seems the biggest mistake people make is underestimating capital requirements and overestimating performance. Be realistic and prudent. Personally, you need to be open and honest about your strengths and weaknesses, and that includes all discussing all past mistakes.
Q. Do you put exit strategies in the legal documents of business formation? How explicit are they?
A. I do, although they serve as more of a last resort. Fortunately, most partnerships that don’t work out usually resolve themselves in negotiation. By the time an exit strategy is employed to dissolve a partnership, one or both parties will dispute it’s validity or put up other walls to prevent a smooth exit anyway, so they are more of a formality than anything else.
Q. How clearly do you define roles and responsibilities before starting a new business?
A. This is the most important thing you can do. I begin every project with a critical path, which clearly outlines roles, including dates. We also lay this out clearly in the operating agreements for each new business we form.
Q. Any advice you have for people who have failed partnerships?
A. Get to know yourself and what structure you thrive within. If you need partnerships to grow, but want full independence, it won’t work and you should stay small or grow organically. If you know what you are comfortable with, you’ll never overreach in terms of choosing partners.
Q. What elements do you notice in successful partnerships?
A. The ability to let go (of control in areas you are not an expert in). I have seen countless business people who are not very well rounded go on to become extremely successful because they are wise enough to let others make the decisions they can’t properly make.
Some of Matthew‘s places and projects: