Transcript

YouTube English auto-captions.

 

========================================================================

 

Hey everybody, welcome to another edition of Bootstrap MD, the podcast for physician and healthcare entrepreneurs. My name is Dr. Mike Ming, my 20 plus year entrepreneur. And on today's show, I want to talk about should you go solo or should you find partners?

 

Now, you've have a brilliant business idea and you're ready to take the leap, but then the question hits you. Should I do this alone or do I need a partner? could be one of the most critical decisions that you're going to make as a physician entrepreneur. And getting it wrong could cost you everything.

 

Now, I've done it both ways. I've had some really wildly successful partnerships and then I've had some painful breakups. I've had solo ventures that gave me complete freedom and others where I desperately wished I had a partner to bounce off decisions. So, today I want to share everything that I've learned.

 

Now, this decision obviously matters because the stakes are high. If you have the wrong partner, you could lead to years of conflict, some legal battles, lost money. If you're going solo and you need help, you could be facing burnout, missed opportunities, even business failure. But if you have the right choice, it could lead to accelerated growth, shared burden, and complete autonomy.

 

Now, this is personal and spoiler alert, there is no universal right answer. It depends on you, where you are in your business, and what your goals are. One common mistake that I often see entrepreneurs make is that their decision is based on fear or pressure rather than being strategic. So, I'm going to break it down on this episode.

 

Going solo or going partnership. Now, the first part we're going to go over solo. We're going to go over the pros and cons. Then, we're going to talk about partnerships, pros and cons of that.

 

We'll give you some real world physician entrepreneur examples. The names have been protected to protect the innocents on here. I want to leave you on this episode with a decision framework to choose on what's right for you. Finally, we'll end with if you choose a partnership, I want to share with you the right way to do it.

 

So, let me talk about my own story. When I launched my first online business, I was solo. It was probably the best decision I ever made for that particular venture. But when I co-founded a software company, having the right partners were absolutely essential.

 

So, we're going to dig into why that is on this call. Let's talk about the case for going solo. If you're going to be a solo entrepreneur, the definition of that is you're going to build, you're going to own 100% of your business. Why does it make sense?

 

Well, there's certain business models that just cater to that. Could be have not having to deal with different personality types and situations. So, let's start with the advantages of going solo. When you're a solo entrepreneur, you've got complete control and autonomy.

 

It's up to you. You make every decision, strategy, branding, operating, finances. It's on you. You don't need for consensus.

 

You don't need to have a compromise. You can pivot quickly without any negotiation. So when I was working on my business and I wanted to change my pricing model overnight, I did it. There were no partner meetings.

 

There were no debates. And then when it came time to profit, I earned 100% of it. Every dollar I earned was mine. There was no equity splits, no profit sharing agreements.

 

There was greater financial upside if successful. So obviously, if you make $100,000 profit solo versus 50K where you have to split it with partner, you need to do 2x the business to break even. Decision-m was simple. Faster execution.

 

Didn't have to coordinate things. There were no scheduling conflicts. There were no delayed decisions. Clear accountability.

 

The success or failure was up to me. And this can be ideal for physicians who just have limited time. There no partnership conflicts. There's no disagreements on the vision or the money or the work ethic and who's doing what and who's not pulling their weight.

 

No risk of partnership dissolution. No legal battles with co-founders. And just to share with you statistics that 65% of startups fail due to some type of co-founder conflict. Work life balance.

 

It's amazing. You set your own work schedule completely. You scale up or down based upon your life. There's no pressure for partners to work more.

 

Perfect for doctors who are balancing their clinical work. When it comes time to legal and tax structures, it also is more simple. You could start with a single member LLC. if you so choose to even a sole proprietorship, although I don't recommend it.

 

There's less complex accounting and tax filings. There's lower legal costs, no partnership agreements to negotiate. All right, we went through the pros, but what are the cons of going solo? The cons is you most likely have limited skills and expertise.

 

Now, I get what you're saying. I know doctors, we think you can do everything, but you can't be an expert at everything. You may not know marketing, finance, operations. When I had a software company, I didn't know tech.

 

It was a steep learning curve to go into some of these unfamiliar areas. It may produce inferior results in weak areas. You know, I'm not a graphic designer. I'm terrible at it.

 

It's by early marketing materials showed up. Finally, you're going to have overwhelming workload if you're doing everything. You wear every hat. CEO, marketer, accountant, customer support, risk of burnout, especially when you're maintaining a clinical practice.

 

It's difficult to scale beyond just your personal capacity. So when I was starting out, the reality check was I was working 60 to 80 hours plus between the clinic and my business. And this is an important part that most people don't think about. There's no built-in accountability.

 

It's easy to procrastinate or lose motivation. There's no one there. There's no partner there to push you during tough times and can feel isolated and lonely. told you being an entrepreneur is one of the lonliest businesses you could be in.

 

You have to be able to create your own external accountability systems. More cons. Limited capital and resources. It's only your money to invest.

 

So, you have a smaller financial runway. You might have limited growth potential. It's harder to take financial risks. The growth potential could be slow.

 

One person can only do so much of it. You may miss opportunities that require diverse skills. Networking is limited. If it's just you, you got to do all the networking on there.

 

There's nobody to help you out with that. Competitors who have teams may outpace you. And again, just because you can have all the profit, you have all the risk. Financial risk is 100% yours.

 

There's no one to share stress or burden. If you fail, there's no one to fall back on. It can be psychologically heavy. And that also weighed on my mind when doing the solo.

 

So that's a solo path. All the bumps and bruises and all the benefits on here. You get complete freedom, but you also get complete responsibility. Okay, let's move on to partnerships.

 

Let's form a case for partnerships. When you have partnerships, you got shared ownership, shared responsibilities, and you're profiting with one or more of the account founders. There different types. You can have a 50/50, or it could be a majority, a minority.

 

You can have equal multi-partners. Partnerships can be great. Could be a graded asset. Can also be your worst nightmare.

 

So, I always like to be optimistic. Let's start on the positives on here. When you have pros of business partnership, you have complimentary skills and expertise. A partner brings strengths where you're weak.

 

In my example, in a software company, my skills were weak in tech. My partner knew how to talk with programmers. My strengths were more in marketing and more of the 30,000 view in the strategy. Overall, that allows us to build a sevenfigure business.

 

We were executed amazingly. We had faster problem solving with diverse perspectives. You know, my partner was more of the tech side. I was more of the operations side and the finance side.

 

Seemed to be like the perfect combination. There were shared workload and responsibilities. We were able to conquer different business areas. We used to speak a lot at events where we would sell our software in here and we would divide and conquer.

 

It was more sustainable for me while I was managing other different businesses. It reduced individual burnout and risk. We pulled our financial resources. So for larger investments, we shared startup costs.

 

We had a lot of travel software expenses. We could also borrow, although we didn't do much of that, but allowed us to have bigger risks together. There was built-in accountability and motivation. We would talk on a regular basis.

 

We kept each other on track. There's somebody there to celebrate wins and also process losses. It's harder to quit when somebody is counting on you. So there was a shared commitment that drove consistency.

 

This allowed us to expand networking opportunities. I knew some people that could work with us. He knew some people that were that I didn't know. It opened a lot of doors and with combined connections, he pushed me to go and meet other partners that I didn't know about that I probably wouldn't have done on my own.

 

It allowed us for a greater market reach and a greater share. And it was good to again to have someone who understood the challenges. It was less lonely. It was less isolating.

 

where you're able to share stresses and have celebrations and fulfill a deeper fulfilled relationship with a partner. Again, it sounds like a marriage, but you're going to have faster growth and two or more people can accomplish more than you can yourselves and you can be pursue multiple opportunities simultaneously, which gives you a competitive advantage over solo entrepreneurs. That being said, there's obviously cons on here. When you have shared profits and equity, your ownership percentage is diluted.

 

You must split earnings even if you work harder. You might feel resentful if contribution imbalance develops. You know, maybe you're making 200K, but maybe you're only keeping 100K. That can sting.

 

There's potential for conflict and disagreements. In my case, we had a long partnership, but there were definitely some areas where we had different visions for the business. There was disputes over money and strategy. There was accusations of work ethic.

 

Personal relationships could deteriorate. You're going to have slower decision-m than you can if you're doing this by yourself. There's delays in execution and it's frustrating. We had ones he wanted to go 100 miles an hour.

 

I wanted to go maybe at 40 miles an hour and that can be difficult. Unequal contribution issues. One partner might work harder than others. This wasn't the case in mine, but I definitely knew there was some resentment that was built over time.

 

My partner was in the Midwest. I was on the West Coast. And there was definitely some areas of miscommunication that kind of snowballed until we were able to to backtrack and see where we were differing uh in strategy and different conversations. But there was definitely some misunderstandings that eventually I think led to me leaving the business.

 

There's also complex legal and financial structures when you found a partner. There might be more complicated tax situations, higher legal costs, and difficult and expensive to dissolve if needed. Finally, there's a risk of partnership dissolution. There's life changes.

 

Philosophical differences can happen. Buyou negotiations can be contentious. Business may not survive the split. You know, when I wanted out of my partnership, pretty much business, although he found a new partner, it pretty much dissolved after that.

 

There's less flexibility and there's autonomy. It's difficult if you're used to making your own decisions. It can't be unilateral. You have to consider your partner's preferences, your partner's schedule, and compromise can be constrained.

 

So again, there are pros and cons in theory, but what does it look like in real life? I'm going to give you some actual physician stories. Again, we've changed the names, but I've worked with hundreds of physician entrepreneurs, and I want to give you a few stories that kind of illustrate this perfectly. So, let's say there's this Dr.

 

Sarah. She's a tele medicine dermatologist and she wanted to build her own online consultation business. She chose to go solo even though some people suggested that she needed a partner. Solo worked for her because she wanted a simple business model.

 

She already had her expertise and she just built a video platform around it. She wanted more flexibility around her kids. It was strong and for her it solo worked for her because she was strong in all necessary skills. She learned about marketing.

 

She learned about business strategy. She was able to hire people like virtual assistants to do customer support or she was doing it herself. She started small but it scaled gradually. She then was able to build it to about a quarter million extra revenue in about 18 months while working about 10 to 15 hours a week.

 

The best thing she kept 100% of profits when she couldn't do it solo her first expenses was hiring a virtual assistant that wasn't a partner was an employee. So I think the key lesson here is solo works best when your business is an extension of your existing expertise and you really value autonomy over just growth speed. So that was example of a solo success story. Now here's one that's a kind of a struggle.

 

So James is a doctor. He's emergency room doctor. He wanted to start a health tech startup. He had this idea for a clinical decision support app.

 

He decided to go solo because he wanted maintain control. Here's why it didn't work for James. He didn't have the technical expertise. He outsourced development and became frustrated because it came expensive.

 

He didn't know how to talk to programmers and he felt like he was just writing checks. He was overwhelmed by the marketing fundraising that was needed for the operation. He was burnt out because he was trying to do everything. Then you probably know where this story is going.

 

you know, he was really struggling on here. He was able to pivot though after a couple years because he realized he needed to have a co-founder who wasn't a physician but was a tech-savvy. He gave up a considerable amount of equity but the business finally launched. Now it's eventually going rapidly because they have complimentary skills.

 

So I think the key lesson in this case is don't go solo in areas where you lack critical expertise especially in techheavy businesses. Let me give you another example. Now we're going to focus on partnerships. So Dr.

 

Jones and we got Dr. Williams, they started a concier medicine practice. They're two family doctors. They wanted to leave the hospital system.

 

They decided to partner 50/50. Why did this partnership work? Well, Dr. Jones had clinical innovations.

 

He was expert at and Dr. Williams was a business operator. He understood business operations. They shared a startup cost.

 

They each $150,000 each. They were able to cover each other's schedules. They had the same work ethic. They had the same values.

 

The partnership was strong on day one. The results after 6 months, the practice was profitable. It's now open to second and third locations, developing over $2 million in revenue annually. They're both working about three and a half days clinically, and they're now partners.

 

They're still friends after five years. I think this worked because everybody came in with clear expectations. They had clear agreements and complimentary skills. When you have that, you got a recipe for success.

 

Now, let's talk about a partnership that ended in disaster. Dr. Anderson and Dr. Lee, they wanted to open a medsa.

 

Dr. Anderson and Dr. Lee were friends from residency and they both decided that they wanted to open a medall. There was a 50/50 partnership, but guess what?

 

They didn't have it in writing. It was a handshake. Dr. Anderson, she worked 30 hours a week in the business.

 

Dr. Lee, she was much more busy in her clinical job. She only worked five. Here's where the disagreements happened.

 

They wanted to spend money. Dr. Anderson wanted to reinvest money back into the business with the profits. Dr.

 

Lee says, "I want money now. I want my distributions." There was no clear decision-making process. These friends from residency, their friendship deteriorated. There were no buyout terms and agreement.

 

Eventually, they ended up having a 12month legal battle. They spent $75,000 each on legal fees. The business was pretty nearly bankrupt, and the friendship was destroyed, eventually selling the practice at a loss. I think the key lesson here is when partnerships don't have clear agreements, they don't have aligned values, and there's a a commitment difference on who's working and who's not, it really is a disaster waiting to happen.

 

So let me give you some things to think about. Where solo business works is when you have simple businesses, when you have strong individual skills and you value autonomy. Where solo businesses struggle is when the business is more complex. There's gaps in skills and learning and there's a need for scaling it.

 

Where partnership works is when you have complimentary skills, you have shared values and you have a clear agreement. When it fails is when you have misaligned commitment. there's poor agreements and you have unresolved and unspoken conflicts. So, how do you decide?

 

I want to end this call by giving you a decision framework and it's based on five key factors. So, take some notes. I want you to be honest with yourselves as we go through there. So, factor number one, how complex is the business and what are the skills that are required?

 

So, some things to ask yourself is, does this business require expertise that I don't have? Can I learn the missing skills quickly enough? Are there critical gaps that could sink the business? So if you want to go solo, if the business is straightforward within your expertise or skills are easily learned or outsourced, perfect.

 

Go solo. But if the businesses require specialized expertise, let's say in tech that you lack and you can't easily acquire, better to go in a partnership on here. So opening up a practice doing tele medicine probably could do this solo. Starting a healthcare software company you most likely will need partners.

 

Factor number two it's all about the Benjamins. What is the capital requirement? Ask yourself how much money does this need to start? Can I comfortably invest this amount alone?

 

What's my financial risk tolerance? Go solo if the startup cost you estimates can cost under $25,000 and you're comfortable affording to lose that money. Find partnerships if it's costing you 50 100k or you need to share financial risk. So examples of businesses in terms of capital.

 

If it's let's say low capital like starting an online course, probably can do this solo. If you're opening something more complex, high capital like let's say an urgent care clinic, consider having partners. Factor number three, be honest with yourself. How much time do you actually have?

 

Ask yourself, how many hours per week can I realistically commit? Will this business require more time than I have? Am I willing to sacrifice clinical income or family time? Go solo if you've got 10 to 15 hours a week and a business you can start small.

 

But if you find that this business is needing 30 plus hours a week and you're already maxed out, better to go find partners. So example of this, starting a medical writing side hustle, you can do that solo. Full service practice, you're going to need partners. Factor number four, your personal work style and your values.

 

Do you prefer autonomy or do you like collaboration? Are you good at compromising communication? Do you need accountability or are you self-motivated? How important is control versus shared burden?

 

So, some traits that I see as a solo entrepreneur is being highly independent. You're decisive. You're actionoriented. You're comfortable with isolation.

 

You're control focused and you're self-disciplined. If you prefer partners, some traits that I see that do well is if you're collaborative by nature, you're a good communicator, you enjoy brainstorming with others, you're willing to compromise, but you need that external accountability. Be honest about your personality. Don't fight your nature.

 

Finally, what are your growth ambitions and timeline? How big do you want this to become? How fast do you need it to grow? Is this a lifestyle business or are you truly wanting to build your own empire?

 

Go solo if you're fine with building a lifestyle business. You got moderate growth goals, but there's no rush. Find partners if you want to target aggressive growth. You want to scale quickly, you want to build for acquisition.

 

So, a side hustle is perfect. You looking to do 5K a month, that's perfect for solo. If you're looking to build a regional practice network, you're going to need partners. All righty.

 

So, some things to think about on here. If you choose partnership and you want to do it the right way, don't skip this section on here. There are seven non-negotiables for a successful partnership. Number one is you need a comprehensive partnership agreement.

 

You have to include ownership percentages, roles and responsibilities, profit distribution, buyout terms, exit scenarios. It's going to cost you some money, I know, for legal fees, but you absolutely need it. Number two, you need clear roles and responsibilities. Who does what?

 

Document in writing. Review quarterly on who's responsible. Align values and visions. You want to discuss long-term goals before starting.

 

Is it a lifestyle business or is it grow at all costs work life balance expectations? What is it? What's the risk tolerance? What is the exit timeline?

 

Equal or agreed upon commitments. Be explicit about time commitments. If it's unequal, adjust equity accordingly. Track hours initially to ensure fairness.

 

Address imbalances immediately. You want regular communication and check-ins. Have bi-weekly partnership meetings. monthly financial reviews, quarterly strategic planning and annual partnership health assessment.

 

Finally, you want to separate your personal and business finances. Document everything. A business bank account from day one. And then plan from the end from the beginning.

 

What I mean by that again people don't like to talk about what happens if somebody dies or disables. Are there bio triggers? What are their payment terms on there? Is there right of first refusal?

 

Now, these are all things on there and I know that we've covered a lot, but let me bring this home to you. I think looking back at my entrepreneurial journey, I've learned there is no universally right answer. I've had solo ventures that gave me incredible freedom and partnerships that multiplied my impact beyond what I could have done alone. But the key is just honest self assessment.

 

Don't let fear drive you to a partnership you don't need. Don't let ego keep you from a partner who could transform your business. I've made both mistakes. I've gone solo when I desperately needed help and I partnered when I could have done this alone.

 

And I think each one taught me something valuable. So, I hope you found this helpful for you. I'd love to hear what you know, are you going to go solo? Are you going to find a partner?

 

What's driving your decision? Feel free to drop me a line at bootstrapmd.com. And if you like this episode or like even please like and subscribe. If you found this valuable, share it with a physician friend facing this same decision.

 

Remember, you're going to have your ups and downs as a physician entrepreneur. Do something a little each day to get you closer to your goals and keep moving forward.