Compatibility still reigns supreme when choosing a workplace ‘other half’. It is when the going gets tough that you need to know what they’re really made of.
Anyone who has ever walked down the aisle to exchange marriage vows knows of the judgements and soul-searching regarding character, values and compatibility that takes place before committing to a life partner. It is, with few comparisons, one of the biggest life decisions a person can make.
Those essentials of values and compatibility in determining a life partner need to be applied just as stringently, instructs industry lawyer and Brisbane restaurant owner Con Castrisos, when deciding on a business partner.
In legal terms, a partnership is defined as “an association of two or more persons engaged in a business enterprise in which the profits and losses are shared proportionally.”
Possibly with the exception of physical attraction, Castrisos says the rules of marriage apply just the same when deciding on a business partner.
“You would not get married to someone who you don’t trust, don’t like and don’t get on with, so why would you go into partnership with someone you feel the same way about—no matter how talented they may be?” Castrisos asks. “I know this sounds like an extreme example, but believe me, I see it time and time again. You need to get into bed in a partnership with someone you are compatible with. If you are going to have issues from the outset because you don’t have the right chemistry or you have very different values and ways of doing things, then it is never going to work.
“A partnership is a place where you have to be able to make decisions collectively, and to do that well you need to be aware of the processes your partner has in making such decisions.”
Which is not to say that close friends or good work buddies necessarily make the best business partners either. Consultant Michael Fischer of Feszt & Feszt says turning a friend into a business partner can be the recipe for disaster.
“Many people go into partnerships in restaurants because they’re mates— and that is very often the wrong reason,” Fischer says. “While you do need to be compatible to make it work, the essence of a good partnership is a clear demarcation of areas of responsibilities.
“Like a good business plan, you need to know what you want to get out of your business and how you want to do that with your business partner. Whether that partner is a silent partner, an operating partner, a financial partner or even your life partner who is working with you, everyone needs to know what they can do and, more importantly, what they can’t do.
“The areas of responsibility should all be pretty clear provided everyone is heading in the same direction. And if they’re not—like you have a chef who wants a business just to show off his cooking and to satisfy his ego, while the front-of-house partner wants to run a profitable business—then you are really headed in the wrong direction, and the result will never be good.”
No matter how close or strong the relationship is, comprehensive legal documents must be drawn up to provide the partnership with a clear structure. Some of the areas covered in such a deal include how long the partnership agreement is in place for, the capital injection of the various parties, nomination of accountants and the working obligations of all involved.
“If you are going to have issues from the outset because you don’t have the right chemistry or you have different values and ways of doing things, then it is never going to work.” Con Castrisos, Brisbane restaurater
One area that can be neglected in the excitement of drawing up plans for a new business, however, is information regarding the solving of disputes and exit clauses when one partner decides to move on.
But as is often said about personal relationships, you get a mere glimpse of a person when times are good, and it is when the times turn tough that you find out what that person is really made of.
“The reality is you always need to plan for the worst case scenario with your partner,” Fischer says. “Not that you hope you will ever need to use it, but in the event when an event is irretrievable, you have to know how you resolve it. That can be complicated, as often the accountants and the lawyers of the members of the partnership may be the same, and that can place everyone in an awkward position.
“In that case, independent appraisal is advisable—and that is the kind of thing that needs to be built into the initial partnership contract from the very beginning, so everyone is clear with what they are working with.”
When a business partnership has broken down or one partner wants out to follow new pursuits, Con Castrisos says it is too late, and possibly too emotionally charged, to decide then how to do this. The outline of doing so needs to be in place from the day the business opens its doors.
“If the situation is one partner wants out and the other wants to stay, the business needs to be independently appraised for its value by a business broker, and then one partner has the option to buy the other one out,” Castrisos explains. “If they can’t agree on these terms, then it is best if the business goes on the market for sale.”
Castrisos adds that having a solid contact, outlining every possible detail in the case of disputes, is even more crucial when the partnership is between friends or family members.
“A partnership arrangement between family or friends needs even more detail to it than between two strangers, because if something does go wrong, it could ruin the relationship forever,” Castroisis says. “By having a partnership agreement which is very detailed makes it clear. If there is an issue, then you can simply rely on the terms of the agreement.
“In most partnerships, there should never be the need to turn to a deed or an agreement, because generally you work things out between yourselves. It’s only when things become a bit difficult that you say, ‘let’s refer to our initial agreement that’s already in place’. It’s there to deal with these sorts of issues and that’s the compromise.”
It is with some pride that Joseph Vargetto of Melbourne’s Mezzo Bar reveals that he and business partner, Luke Stringer, have not had one dispute in the two years they have been in partnership operating the inner-city establishment.
“It is one of those things that, in the first place, you have to source the right person to go into business with, and they have to have the right ethic,” Vargetto says. “If you get involved with someone who shoots from the hip and does not think things through or they are using the business to push their own agenda, that is where the problems do come from.
“We both have an understanding of what the business goals are. We look for things that make the business better, and that is not always going to be popular. But as long as it is the best for the business, we both understand that.”
Vargetto and Stringer knew each other as business colleagues for a number of years before they decided to join forces as partners in the venture. At Mezzo Bar, Vargetto is in charge of the back-of-house, administration and finance, while Stringer runs the frontof- house and communications.
“We have found we don’t really need to settle disputes, but there might be some financial issues we might need to look into, like new business or investments.” Vargetto explains. “In those cases, we have taken legal counsel together and separately, and we have a good structure in place with our accountant. The thing we are clear about is that we both understand we don’t want to take advantage of each other.”
“It is actually very much like a marriage. You have your great days and your really great days, and then your not-so-good days. But you have to see everything in perspective. You need to be patient, and do need to do whatever it takes to succeed.”