Entering into a partnership agreement
Jones and his business partner started the business in 2006 with the aim of providing quality financial planning advice in line with clients’ needs, goals and objectives. During the past financial year Fortitude recorded revenue of $747,209.
In the first few years the company acquired Bailey Court Financial Services, Tayfield Financial Services, Lifespan Financial Services and a number of small businesses.
Since then Jones has taken over the business as a sole trader, having ended his agreement with his former business partner.
Jones, who went into business with one of his former employees, says he wasn’t prepared for the effect it would have on their working relationship.
“Being in a partnership at the start was the most challenging aspect due to the different ideas each party has,” he says.
“Our partnership broke down because there was too much competition. Rather than combining our different skills it became a matter of who’s better at all things?”
The age difference proved to be a problem because Jones and his partner were at different stages of their careers and wanted to achieve different things.
Jones says he realised within six months that the partnership was unsustainable but remained in business with his partner for four years, ending their agreement in October last year.
Becoming a sole trader proved to be a blessing for Jones, whose staff blossomed under the new management model.
“By removing that business partner the staff was really able to take ownership of the business,” Jones says.
He says while staff were initially wary about job security – based on the departure of Jones’ former business partner – he managed to turn it into a positive.
“Job security was a big issue for the staff. It took them a good six months to understand their jobs were secure. Not only were their jobs secure they were now in control,” he says.
“I own three businesses so while I sit in the Fortitude office full-time all I do is take care of the accounting and financial aspect. The staff take care of the growth,” he says.
Rather than turning him off partnerships Jones says the experience helped to identify exactly what he’s looking for in a partnership.
“Even though I’m now the sole trader in this business I still maintain business partnerships in my other businesses – I’m a big one for partnerships,” he says.
Jones’ advice to other start-ups? Get legal advice about partnership agreements, regardless of the nature of the relationship you have with your business partner.
“I recommend all people get a partnership agreement. Get assistance from a lawyer right from the outset. A low percentage of people have an agreement. More often than not they’re ignorant,” he says.
“But if someone wants to leave the business what’s the process? What is the methodology of how you exit?”