How To Pick A Business Partner
Before we get into how to pick the right business partner, we’ll start with the repercussions of picking the wrong one. 70% of business partnerships fail. There are many reasons why, but most boil down to these factors: solely starting the business for capital, ineffective decision making, the inability to work as a team, being passive or passive-aggressive towards one another, not being able to define your roles, and a lack of execution. Partners should be passionate about their work and working towards the same goal. Communication, and lack thereof, is a HUGE factor in why many business partnerships fail. Don’t be afraid to express your point, and you must be able to be receptive to what your partner wants.
Know your strengths and weaknesses, as well as your partner’s. Your partner should be able to help strengthen your weaknesses. Fill in each other’s gaps to complement one another. Providing emotional support is also key to becoming successful. This is starting to sound like How To Be In A Successful Relationship, bear with us. There will be good days and bad days in business. If compatible, you should be able to stand by your business partner through both. If your partner is struggling with whatever they’re going through and you can help, do so. A good partner will be willing to do the same for you if you. Ultimately, these issues are a liability to the company. You want to be sure they’re in a good head space to co-run your business effectively.
Accountability is extremely important. One should be able to hold themselves accountable for their words and actions. If your potential partner deflects taking responsibility for their actions or holding their weight in the company, that is a red flag. You want to be sure there is enough compatibility there for the both of you to be productive. The most progressive partnerships rely on bouncing ideas off of one another and being open to hearing their partner’s suggestions.
If you are a control freak, having a business partner may not be for you. Liability becomes an issue here. If your partner is not holding their weight, it will fall on you and that will ultimately end up in resentment. In cases where people seek full control, we suggest finding a mentor instead of a partner to help steer your business to success. If you enjoy working with others and sharing control, then seeking a partner that is compatible with you is key. When we say compatible, we don’t mean choosing a long-time friend just because you love them. A FRIENDSHIP IS NOT A REASON TO START A BUSINESS TOGETHER. A good friend isn’t necessarily the best business partner either as you may have different perspectives within the company and lose a friend in those differences. If the friendship fails, the business will more than likely fail as well. Although we shy away from this idea, it has proven to work at times. We suggest you keep an unbiased perspective on whether your friend and their traits will help or hinder the company’s success. Weigh the pros and cons very carefully, and don’t forget to include your own traits, strengths, and weaknesses in your analyzation. Growing a friendship THROUGH the partnership is a different story. INC suggests to share off hours and travel with your potential business partner to get a feel of each other’s interests, habits, strengths, and weaknesses. They also suggest to pick someone who’s fun to be with. Let’s face it, we don’t want to spend a majority of our time with someone we don’t like to be around.
Once you find a potential partner, the next step is to HAVE A WRITTEN LEGAL AGREEMENT FROM THE BEGINNING! With the agreement, make sure you both read the entire agreement and discuss what’s in the agreement to see what you both want and don’t want. Putting everything in writing will secure both you and your partner’s positions, as well as protect you both in case you do have a falling out and it escalates to legal matters. You can use a lawyer or sites like Law Depot to get your form. Assess the risks through this process and make your decisions based off of what is in both of your best interests. This is where you will handle the percentages each of you will get in the company. In this case, you want to have a partner who is fair and logical enough to give and take exactly what they are owed in the company. If your partner is going to be doing more work than you, then a 50/50 split would be unfair. Sorting through these percentages is extremely important, and it’s even more important to get it in writing and live up to your responsibility.
While sorting through the paperwork, get a head start on the groundwork. This will further solidify if this person is the right partner for you. Sit down with your partner and ensure that you both have common values and vision for the company. You will be spending most of your time with your partner so you should at least be on the same page in how you view your company and responsibilities in it. Making sure you both have great work ethic and are self-motivated is important, as you don’t want a partner you have to micromanage throughout the partnership. Set clear expectations for one another. Lay out your goals, roles, and time-commitment in the partnership. Once you can come to an agreement on all of these terms, then proceed with wrapping up the paperwork and begin!
As your partnership is underway, focus on developing and stamping your brand. Have a common understanding of what it is you want for your company’s brand, what makes your company different, and what you stand for. Setting goals for sales, partnership, growth, staff, and finances is another way to secure the success of your partnership and company. When hiring your staff, you and your partner(s) should work together to find great people that you all agree will push your company even further. Everyone should be willing to learn, grow, and put in input as to what will help make your company successful. As you move forward, pause and reflect on what’s working and what isn’t working every couple of months. Analyze your methods and proceed to continue with some or change others depending on the direction your partnership wants the company to take. This will help you succeed.
With all of these tips in tow, you should be all set to starting the process of picking the right business partner for you. Happy hunting!