Ben Franklin: America's Original Entrepreneur; On Partnerships

by Blaine McCormick

Ben Franklin is the story of America’s first entrepreneur, taken from his own words, adapted for today’s business reader. It deciphers the colonial context of Franklin’s autobiography and clearly presents his observations and experiences in the business world in ways that modern readers can appreciate and apply. Read a review and an excerpt here.

Chapter 53

On Partnerships

Always wanting to help the first-time entrepreneur, Franklin offers
valuable advice in this chapter about managing business partnerships.
He also extends the franchising concept he introduced in Chapter 42.
Along the way, he gives us a brief update on his own businesses.

SINCE MY PARTNERSHIP IN CAROLINA HAD succeeded so well, I decided to set up a few more and give some of my best workers the chance to run their own shops. As before, I designed a profit-sharing contract in which I furnished the seed capital with the goal of the workers purchasing full ownership back from me at the end of six years. Most of them achieved this goal and thereby lifted both themselves and their families to better circumstances.

Partnerships are usually difficult and often end in conflict, so I'm happy to report that all of these worked well and ended on friendly terms. I attribute this success to our clearly defining the roles and expectations of each partner at the very beginning in our contract. With such clarity, there is little to dispute. I heartily recommend this approach to all who enter into partnerships. Business partners may indeed have admiration for and confidence in one another at the beginning of the partnership, but it rarely lasts. Petty jealousies arise along the way and they begin to disgust one another. Or each perceives that the other is carrying less than his fair share of the business's burden. Eventually, the friendship breaks up and often a lawsuit or worse results.



My business now had a life of its own, and every day my circumstances became easier. My newspaper had become very profitable and was for a time the only newspaper in this and the neighboring regions. In fact, a quarter of my subscribers were from outside of Philadelphia. I learned the truth of the age-old observation that, "After earning one's first 100 pounds, it's easier to get the second 100." Money grows and reproduces itself.

 

Poor Richard once
said, "He that sells
upon trust, loses many
friends, and always
wants money."

 

Stock options are a
form of contingent
contracts in that they
reward employee-owners
for working to grow the
wealth of the firm. Both
Wal-Mart and Microsoft
used generous stock
options during their early
years to reward growth.
Many employees became
millionaires as a result.

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