Before Entering a Partnership, Be Clear on What Each Side Gets and Is Expected to Give or Your Startup or Small Business is In For Some Trouble

This week, I want to talk a little about the importance of being crystal clear on what everyone’s expectations are when you enter into any business agreement like a partnership or other contract. We all know this, but we also all sometimes forget it. I did just that awhile ago (oops!) and it cost me quite a bit of time, effort, and frustration simply because my expectations were out of line with the reality of the deal.

If you’ve been following me for awhile, you know that I teach a few online courses including the Business Builder Workshop and How to Fund Your Startup. I started out teaching on Udemy and have switched to Curious. Because I teach these courses, I recently participated in a market research study about what it was like to teach an online course through platforms like these and what I like and don’t like about doing so. Answering those questions got me thinking about some of the misconceptions I had before my first course launched and how the lack of consensus on how the teacher/platform relationship would play out lead to quite a bit of dissatisfaction with the arrangement…eventually leading me to switch platforms.

The cliff’s notes version: I felt that I was promised promotion for my courses by Udemy in all of the materials they gave me to pitch the idea of me becoming an instructor on the platform. That made sense to me: I provide the content, they provide the heavy lifting when it comes to marketing and promotions, and we split the revenue; win, win. As it turned out, however, Udemy really doesn’t do jack to promote a course. From my perspective, that makes them useless. If I have to do all of the marketing myself anyway, I could throw up a members only portion of my website and have my course materials there with very little effort. In this case I would take orders myself and pay waaaaaaay less to a payment processor than I do to Udemy. So, again, if I am responsible for all of the marketing, Udemy gives me nothing but takes a sizable percentage of my revenue. That’s a craptastic deal for the instructor, if you ask me, and that’s precisely why I moved my course from Udemy to Curious and my second course and soon to be released third course are only on Curious and I didn’t even consider putting them Udemy.

I wasted a bunch of time and initial promotion energy on Udemy, however. Why? Because there was a lack of consensus between the two parties – myself and Udemy – about what each party’s responsibility was in the context of the arrangement. This is a long-winded personal story to try to highlight to you the importance of being sure that everyone is clear, from the beginning, about what is expected of all parties involved in a deal from the beginning if there is any hope of that deal being successful.

With that said, here are some tips for making sure you have that clarity:

  • Firstly, be very descriptive, in the contract, about who does what, when they do it, how they do it, etc. If you’re interacting directly with a human being and negotiating a contract, you can work together to draft comprehensive terms that both sides are comfortable with. If you’re working with a boilerplate agreement from a company, like with me and Udemy, you can carefully read through all of the details. Udemy made vague statements about how they could promote my course but there is nothing that requires them to do so.
  • Secondly, if you can’t have super clear requirements in writing because it would be unrealistic, as with my deal with Udemy, you should do extensive research about the organization you’re getting into bed with. I did some research on Udemy, but once I began to get frustrated I dug deeper and found lots of other instructors who were unhappy with Udemy’s lack of promotion and utterly opaque payment terms. These were overshadowed in my initial, cursory research, because Udemy is an SEO powerhouse.
  • Building on that point, if at all possible, actually talk to other people who’ve done business with whomever you’re thinking of partnering with so that you can ask specific questions about what to expect, and what not to expect, from the relationship.
  • Finally, if something feels fishy, don’t do it. If you’re a new business owner, you probably feel like any deal you pass on could lead to the demise of your business, but it’s unlikely that’s really true. It’s typically much easier to get a business deal later than to get out of one that has turned out not to be what you’d hoped. Trust your gut and if you feel like things aren’t going to go the way you want them to, don’t do it.

If you’re an aspiring entrepreneur, the best thing you can do for yourself is to just get started. That first step is huge!
If you’re not ready for a big commitment, check out my business planning ebook here. It will take you through the whole business planning process for less than $5 so you’ll at least know if you can and should move forward.
More of a video person than a text person? Click here to try my ecourses instead.

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