Team players: successful partnerships don't just happen. These young entrepreneurs have discovered the key to combining their unique talents.
It would seem that a business partnership would be a natural fit for these identical twins. The two have shared just about everything in their lives, including the same alma mater, an interest in drawing, and a passion for entrepreneurship. But for these young business owners, teaming up wasn't so obvious--at least not at first.
"What was really weird was that we never really thought about working with each other because when we were in school, we studied two opposite ends of the spectrum," says Shane, who is just five minutes older than his brother. "Shawn was doing mechanical engineering and I was doing the fine arts thing with the design work, so we just always looked at ourselves as kind of separate professionally," he says.
In the beginning, the two traveled different paths. After graduating from the University of Michigan in 1996 with a degree in industrial design, Shane moved to Oregon and began working for Adidas. He designed shoes for athletes such as NFL stars Keyshawn Johnson and Eddie George. Meanwhile, Shawn stayed in Detroit to work on automotive programs for DaimlerChrysler.
After five years of working for other footwear companies, Shane was ready to live out his entrepreneurial aspirations. "I was actually looking at other people in the industry to maybe partner with," he says. "It never crossed my mind that someone who could be my ideal partner was right in front of my face. Even though our skill sets were different, we said 'Let's take advantage of it and complement each other.'"
So in 2003, the 33-year-old twins obtained a $250,000 line of credit from their bank and threw in another $150,000 of their own money to debut their first collection. Shane handled the design while Shawn tackled all aspects of running the operation.
Today, the footwear designers have two collections for men and women: Detny by SHANE&SHAWN (www.detny.com), a casual line that retails for $110 to $130 a pair, and SHANE&SHAWN, a dressier line of shoes that ranges from $140 to $200. The shoes are sold nationwide in 75 independent boutiques, Nordstrom's, DSW, and Macy's, as well as online distributors such as Zappos.com, Shoes.com, and ShoeMall.com. The lines are also distributed in New Zealand and Canada. The five-employee company earned $1.5 million in revenues last year, and the designers project $3.2 million this year.
There are many reasons why would-be entrepreneurs choose to set up a partnership. Some join forces because of a shared vision. Others rally the troops because it affords the opportunity to build a business without incurring the costs or risks associated with going it alone. "I think business owners form partnerships because they look at the added value of what a person can bring to their company," says Brenda Hopper, state director for the New Jersey Small Business Development Centers Network.
Whatever the reason for teaming up, building a solid partnership is not easy. What you intend to be a positive experience can quickly morph into a relationship disaster if it is not structured properly or managed well. (See the sidebar, "10 Keys to a Successful Partnership.") Shane and Shawn have unlocked the mystery, and so have the dynamic business partners we feature on the following pages. By capitalizing on their strengths and skills, these young entrepreneurs have turned teamwork into highly profitable ventures.
For Shane and Shawn, having a solid partnership has certainly meant commitment, confidence in one another, and the ability to work as a team. But the two also credit their success to their willingness to compromise. That was the case about six months ago when Shawn wanted to sell their shoes through a discount retailer that also carried high-end labels. Shawn thought it was a great opportunity to expand the brand and make money for the company. Shane didn't agree.
"When I first looked at it I said, 'Dude, there is no way we should do this because we're trying to build our brand and it's too early to take our name and put it in a discount retailer,'" Shane says. "An older brand like Kenneth Cole can [do that] because they've already built their name and it's something that people understand as super high-end. But I was thinking that a lot of people still don't know about us, so if they see us for the first time in that discount retailer, that could potentially hurt us."
To settle this dispute, the two agreed to create a brand called Detny Sport for the discount retailer. Although tied to the original brand, it has its own identity. "I think what makes us successful is that we complement each other, but there is also a commitment level that you have to have," Shane says. "You have to have two or three people who are willing to sink and swim with this thing 110%. If you don't, it's not going to work because it is not an easy thing to do."
According to BizStats.com, an online source for business statistics, only 6% of all small businesses are in the form of partnerships. And even though the National Federation of Independent Business, an advocacy group, reports that partnerships are four times more likely to succeed than sole proprietorships, more than 50% of these joint ventures fail.
UNDER ONE ROOF
When a master homebuilder, financial guru, and savvy salesman decided to many their resources and individual expertise to start JLW Homes and Communities (www.jlwhomes.com) in Atlanta, they knew exactly what they would be getting into.
Seven years ago, Gregory Wynn, Komichel Johnson, and Robert A. Jones III set out to change the fabric of in-town Atlanta by building quality, affordable housing in some of the city's most undesirable urban areas. It was a tall order to fill, but one that the three professionals vowed to do--one house, and one block at a time. Today, the partners are doing just that to the tune of $36 million in revenues and 517 homesites throughout various planned communities, including High Pointe Estates, Preston Hills, Washington Park, and Monterra.
What's their secret to maintaining a successful partnership? "Communication, communication, communication," says Johnson, who as CEO and business manager oversees all of the company's land acquisitions and financing. "We don't all agree on the same issues and we've had some heated arguments where I wanted to put all of them in a headlock and say 'Y' all are crazy.' But we realize that through communication and laying out the facts, that we can overcome any issue that may arise within our organization," he says.
Most new business owners would probably not turn down the opportunity to close a deal worth $5.4 million, especially if the offer is made just one year after being in business. But that's exactly what the partners of JLW Homes and Communities did when they walked away from the chance to build Heritage Pointe, a 70-unit condominium project in Atlanta's Summerhill section. In the beginning, that decision was hardly unanimous.
"At that time we didn't have the capacity to get it done," says Wynn, 37. "It would have taken an experienced master builder and two assistants. Now, we had two master builders at the time, but they were busy on other projects. Plus, we would have needed a new core of subcontractors, at least 100 men, and we just didn't have the manpower."
Although Johnson, 34, and Jones, 32, were dogmatic about moving forward, they didn't try to bully Wynn into switching sides, nor did they ignore his concerns. They held a meeting to discuss the logistics of the project and then trusted that their partner's 10-plus years of experience in building homes would steer them in the right direction.
"After we laid all the facts out on the table, Komichel knew that we could get the numbers worked out and that we could make a sufficient return. But Greg didn't feel like we had the capacity to perform it," says Jones, who is in charge of marketing, sales, and business development. "After a long discussion we realized that it was way too early for us to do this type of deal, so we went with Greg's advice. And I'm glad we did because if we didn't, we may have lost our shirts."
Today, the 12-employee company has become the city's premier in-town builder constructing affordable homes ranging in price from $140,000 to $380,000. The partners recently acquired a deal for $1.5 million to build 48 homesites in the second phase of a development named High Pointe Estates. The deal generated $20 million in revenues for the homebuilders. Their latest project, the Monterra, involves an $11 million acquisition to re-do a public housing project. When complete, the 217-unit mixed-income housing development will generate $80 million in sales revenues for the company.
"We're changing the fabric of lives through homeownership," Jones says. "But the one thing that I'm most proud of out of everything that we've accomplished is the fact that we've stayed together, because partnership is not easy. There are times when we're [upset] and we have to leave the conference room or the office to cool down, but at the end of the day we depend on each other's effort, diligence, and commitment to seeing these projects through to completion."
LIGHTS, CAMERA ... ACTION
While standing on the front porch of her new Atlanta office peering at the Hyatt Hotel across the street, Tracey Baker-Simmons was struck with an idea for her production company, [B.sup.2] Entertainment: to create a reality show that chronicled the life of '80s R&B artist Bobby Brown.
Despite Brown's brushes with the law--or maybe because of them--it seemed to be a good idea. Brown and Whitney Houston lived in Atlanta at the time. Both were always in the news, and the two had spent a lot of time at the Hyatt. Plus, the reality show craze was far from simmering down. And BakerSimmons, 39, and her partner Wanda Shelley, 37, were looking for a way to gain entry to the television arena. Even though Brown's attorneys said it couldn't be done, these partners believed that it could.
"Wanda said, 'Let's use six degrees of separation to get to him.'" remembers Baker-Simmons, CEO and executive producer. "Wanda is from Atlanta and she knows a lot of people, so she got on the phone." A call to Brown's spiritual adviser landed them a meeting with the artist's brother Tommy in 2004. Luckily, Tommy was already familiar with Baker-Simmons' work as a former music video producer, so it didn't take much to sell him on the idea. Once the brother initiated contact between the [B.sup.2] Entertainment partners and Brown, the ladies made their pitch and then eagerly awaited a response. After a few weeks, Brown agreed to do the show and wanted to start immediately.
Filming and editing Being Bobby Brown took nearly one year to complete and cost [B.sup.2] Entertainment $1.5 million. But its debut on Bravo cable channel in June 2005 was the highest rated Thursday night premiere in the network's 25-year history. The business partnership worked well for the six-employee company. [B.sup.2] Entertainment earned nearly $2 million in 2006 and the partners are projecting $6 million in 2007.
Baker-Simmons and Shelley started [B.sup.2] Entertainment (www.b2entertainment) in Shelley's basement in 2002 using $50,000 they pooled from family and friends. Since they had been friends for eight years, shared the same work ethic, and had a passion for entrepreneurship, they decided to form a partnership. At the time, Baker-Simmons had ended a partnership in a production company she started in 1996 and Shelley, who worked in pharmaceutical sales for AstraZeneca and Novartis for eight years, was looking to leave the confines of the corporate world.
Shelley says splitting the duties was simple, as their skills were complementary. Baker-Simmons, who had more than a decade of experience in film and television, handled the creative, while Shelley, a corporate veteran, tackled the financials on the production side. Although there was a clear delineation of duties, they still disagreed about such things as how to pursue projects and how much money to spend. But the two say settling disputes is easy. Shelley says they agree to disagree and leave the final decision to the partner with the most experience.
"I respect her for her expertise and Tracey respects me for my expertise," says Shelley, vice president and executive producer. "So even though we might argue about something, when it comes to anything that has to do with numbers, I make the final call. When it comes to the creative, how we're editing the show, or choosing a network to go after for a particular project, she makes the final call," she says.
In addition to producing Being Bobby Brown, this dynamic duo is now working on an upcoming animated series for PBS called Mac and Me, featuring the voices of former TLC members Tionne "T-Boz" Watkins and Rozonda "Chilli" Thomas.
RELATED ARTICLE: 10 keys to a successful partnership.
Partnerships can be profitable if structured and managed properly. Before embarking on any business partnership, consider these steps for creating a successful union:
1 COMMUNICATE CONSTANTLY. Maintaining open lines of communication can prevent disagreements from turning into a war. Hold regular meetings to update partners about the company's progress, review roles, share grievances, and provide constructive criticism.
2 SHARE THE SAME VISION. Each member must agree on the strategic direction of the company. So if you plan to build a chain of stores in the next five years and your potential partner wants only one, find another partner.
3 FIND PARTNERS WHO ARE COMPATIBLE. One of the biggest mistakes that potential partners make is choosing someone who is exactly like them. "You should definitely look for someone with complementary skills," says Shawn Ward, one-half of shoe company Detny by SHANE&SHAWN. But also recruit someone whose personality doesn't fight yours.
4 DEFINE THE ROLES. Brenda Hopper of the New Jersey Small Business Development Centers Network says to choose and assign hats according to the individual strengths and skills of each partner.
5 CREATE A PARTNERSHIP AGREEMENT. It should include: the roles of each partner. amount of money invested by each partner, ownership percentage, partners' pay and compensation, company vision, how disputes will be settled, length of partnership, and how assets will be distributed if the partnership is dissolved. Have your lawyer draw up the papers and have all partners sign.
6 BE WILLING TO COMPROMISE. Not all decisions you make will be clear-cut. When disputes arise, try to find a middle ground that will satisfy you both while still benefiting your business.
7 HONOR YOUR COMMITMENT. "Sometimes a partnership runs very smooth and sometimes you run into bumps where you clash because one partner is bringing more to the partnership than the other," Hopper says. Clearly indicate the level of commitment that will be required to run your operation.
8 RESPECT AND TRUST ONE ANOTHER'S ABILITY. You're in business because of your experience in a particular field. Let your partner do what he or she does best and trust that their expertise will safely guide your business.
9 DON'T TAKE THINGS PERSONALLY. Partnerships, especially those among family members, can get personal when tempers flare. "Don't hold grudges; let things roll off your shoulders," says JLW Homes and Communities' Komichael Johnson.
10 NEVER GIVE UP. Partnerships, like any form of business, take time to succeed. So stick to your goals, settle in for the long haul, and keep the faith. Ward's twin brother and business partner Shane says, "sooner or later you're going to find that one person who is going to change your business forever."
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|Article Type:||Cover story|
|Date:||Jan 1, 2007|
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