Gift Firm Owner Says Finding a Partner Is Like Tying the Knot
Margot McDonough was a television producer before starting a part-time corporate gift service out of her dining room in late 1995. Relying on her industry contacts, McDonough swiftly gathered enough business to turn her company into a full-time venture, purchasing, wrapping and delivering unique gifts for individuals, movie and television productions, and awards ceremonies. But after four successful years, McDonough realized she needed expansion capital and a partner to share her vision--and her workload. She talked to freelance writer Karen E. Klein about how she chose her partner and integrated her into the existing business.
My business was growing quickly--at some points quicker than I could handle. We started out working mainly for the entertainment industry, and that’s still the core of our clientele, but we’re also working with other corporate clients and many Internet businesses, particularly on marketing and promotional items. By early last year, I realized I needed investment money to be able to grow and increase my capacity and my inventory. I also needed help spreading the management responsibilities a little.
Along with that, I realized I didn’t want to run this business all by myself anymore. I wanted to share the dream and share the fun. I was brainstorming with friends, who were supportive, but I wanted someone who was just as committed to the business as I was. I realized I wanted a partner, someone with the same passion I have who would see the big picture and the vision.
The hard part was finding someone who fit that bill. I let the word spread that I was looking for a partner who would help me with strategy-building and goal-setting. I had a blank sheet and I started thinking about finding someone with strengths in areas that I lacked, like financial management. My initial thought was that I needed to find a CPA or an MBA.
But I called a friend of mine who’s a client, and we had breakfast with the goal of brainstorming about people who might be suitable and interested. During the breakfast, we determined that our mutual friend, Sonja Pelinski, was a likely candidate, even though she didn’t bring those financial strengths to the table. Along with being a friend, she was one of my best clients, she knew my business very well, and she always had an entrepreneurial spirit.
She and I are more similar in background than complementary. We have the same types of professional experiences and creative sensibility. When you’re out trying to find a business partner, it’s almost like looking for a marriage partner. You need to find a good personal match, and you can always hire someone to fill in those tasks where you and your partner lack in expertise.
When I got back to the office from that breakfast, there was a message on my machine from Sonja, saying she wanted to talk to me. It turned out she was frustrated with the corporate politics at the studio she worked for and she wondered if there would be a place for her in my company! That was early July 1999. By Sept. 1, she was here.
Over those couple of months we got together several times to talk about the company, and we both spoke to other people and got their input about it. We figured out how to structure the partnership so that it made sense. And we hired a law firm to hammer out the legal agreement for us, which was a good thing because it came up with all sorts of concerns that we never would have thought about.
We did a self-valuation of the company and Sonja invested money to buy 50% of it from me. Our responsibilities are still being divided up. Loosely, she’s responsible for marketing efforts, and I tend to handle the bigger corporate clients. We’re still working through how to utilize our talents and energies best.
Bringing her into the firm was a pretty smooth transition. All four of our employees work part time, so she didn’t step on anyone’s toes. And the nice thing was that she didn’t have to draw a salary right away. Still, it is difficult to accommodate a partner and come up with another salary when a business is growing, and we’re still building up slowly. I cut back on my salary to accommodate hers, in fact.
On a personal level, we were fortunate that we’d already established a relationship. And she’d been an important client for so long that she knew the business really well. She understood what our clients needed from personal experience, and she was familiar with our style and respected and appreciated it.
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If your business can provide a lesson to other entrepreneurs, contact Karen E. Klein at the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016 or at kklein6349@aol.com. Include your name, address and telephone number.
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AT A GLANCE
* Company: Elephant Gifts Inc.
* Owner: Margot McDonough and Sonja Pelinski
* Nature of business: Corporate gifts and promotional services
* Location: P.O. Box 2208, Toluca Lake 91610
* E-mail address: elephantgift@earthlink.net
* Year founded: 1995
* Employees: 4 part-time
* Annual revenue: $750,000
