Donald Trump is nothing if not big. An American businessman and the owner or developer of soaring skyscrapers in a number of cities, he stands 6 feet 2 inches tall, is a billionaire many times over, and, as of this writing, an outspoken candidate in the 2016 presidential election. “I like thinking big,” he once said. “If you’re going to be thinking anything, you might as well think big.”
Many people don’t think big when they enter into new partnerships. They might dream big, which is perhaps what Trump means. They imagine they will accomplish something important—building a successful business, creating an exciting new life for themselves, making a difference in the lives of others. But for all their ambition, they often don’t think big, in the sense of plotting strategically what might happen as their business develops. They’re so jazzed about starting their venture that they don’t plan for success or think rationally about their business’s trajectory. As a result, a couple of bad things can happen. Sometimes they start out too big, embarking on an initial project that is overly complex, capital intensive or risky. In short order, they flame out. Other times, they start modestly and find themselves struggling to adapt as their business gains momentum. In the best-case scenario, they experience a brush with death but manage to survive. In the worst-case scenario, well… let’s not talk about that.
With our business, we fell into the second category—struggling to adapt. When we started Burba Hotel Network, we purposely started as small as possible by hiring ourselves out for a few small events that were fairly predictable and manageable. Not a lot of potential money, but a starting point. Resolved not to carry any debt, we managed our capital needs and lightened the logistical load by taking on a partner to launch our own event, which we thought could be big. We further mitigated our risks by having Jim keep a full-time job outside our company. Because we did everything ourselves and because Jim’s employer gave us free office space, our overhead was extremely low, which helped keep our stress level down that first year and make our venture seem more practicable. We were paying our bills and even giving Bob a small salary so that he could make his car payment. All this was smart partnering on our part.
Unfortunately, we didn’t extend that kind of careful thinking beyond the launch of our first owned event. Actually that’s a matter of some contention between the two of us. Jim contends that Bob did have a strategy in place—for himself. He had an escape clause that said that if he wanted to, he could bow out as a business partner after five years, no questions asked. As our business became established and growth opportunities arose, Jim wasn’t sure whether we should accept them; he didn’t know for certain if Bob would be around to help him run the business, and the company couldn’t afford to bring someone in to replace him.
Bob contests Jim’s version of the story. He thought that he was indeed “all in” on the business, even with the escape clause. We had worked out our agreement and playbook. That escape clause was there because of fear—Bob’s fear of losing himself and his professional identity.
Related: 21 Quotes About Failing Fearlessly
Jim’s response to Bob: “So that means you weren’t really all in!”
We can both agree that we didn’t have any kind of business or financial plan in place specifying what we might do if our newest partnership and conference succeeded. Our approach was to “see how it goes”; we simply hoped we would make enough on that first new conference to pay the bills and fund subsequent conferences. We would judge ourselves successful if after the first year or so we had managed to stay solvent.
With the bar set so low, we wound up succeeding well beyond our expectations, walking away with enough money to cover our bills and also creating a bit of buzz in our industry. That was exciting, but we soon found our anxiety levels rising again. We hadn’t appreciated a basic truth about our business: You’re only as good as your last conference. As we now realized, our second conference had to be bigger and better than our first if we were to sustain our success. Meanwhile, people in our industry started coming to us with new opportunities. Although this was immensely validating, we didn’t have the capacity to execute more or bigger projects. We were still just the two of us and one employee. When we hired another employee to help us, the poor woman had to sit in a space the size of a closet because that was all Jim’s employer had available.
Soon, we didn’t even have that. About the time the big new event we launched was reaching its second year, we learned that Jim’s employer would soon ask us to move our little company out of the office (big surprise there). They were growing and needed the space. We had very little notice and had to scramble to find new office space, right when we were frantically approaching the date of our event. We managed to find our first real office just in time, but then we realized that we had to acquire all the back-office infrastructure we had also been borrowing. What kind of computer system would we buy? Did we need a call answering system? Was it time to hire additional help? Could we afford it? What was the best way to finance all of this?
We were playing catch-up with our business, all because we hadn’t bothered to come up with some kind of strategy at the outset. We wound up improvising solutions as we went. It was unnecessarily stressful, and our solutions might not always have been the smartest and most economical. The lesson is this: Don’t just wing it when embarking on a partnership, because you might not be as lucky as we were.
Think big, start small, but plan for success.
Adapted from Smart Partners: Building Successful Relationships in Business and Life; September 6, 2016.