Hiring the right employee is always a challenge and you never know until you have seen how they operate in the workplace if they actually are the right choice. Choosing the right business partner can be an even greater challenge. With much at risk, what criteria do you employ to find the right business partner for you?
If you have determined that you want a business partner, ensure your reasoning is sound. Typically the advantages of taking on a business partner include sharing the daily stresses and decisions, and sharing financial risks within the business. Partnering with someone with skills complementary to yours also gives a greater foundation for the business to launch, operate and succeed. Though partnerships don’t only form at the conception stage. Some organisations take on a partner well after it has been established. Growth and diversity are key drivers in this situation.
Much like a job interview, asking the right questions before choosing your perfect business partner is crucial to the company’s future success. Some questions you may want to responses to include the following:
- Does this person have the ability to make vital decisions and cope with risks?
- Are they a team player?
- Will they be reliable?
- Do they have the financial resources?
- Do their skills across business operations complement your own?
- Do they share your values and vision?
I once saw what seemed like an enduring and prosperous business relationship crumble because the two partners had very different aspirations for their business. One was highly driven and ambitious, wanting to dominate the market and expand nationally. The other was content to build a single office, hometown venture that was profitable and could be comfortably managed into retirement. The only ones to benefit from the demise of the partnership were the lawyers. To overcome the pitfalls of such a scenario try working, socialising or travelling together first. You learn a lot about a person and what connects you with them when time is spent together outside of the workplace.
Some business owners look to take on a partner for less positive reasons; need for capital, desire to lighten their workload, need to broaden their business contacts, and companionship in undertaking the operational functions. These reasons are fraught with drawbacks. You may want someone to share the daily responsibilities, but are you ready to share the decision making across all facets of your business – client acquisition, servicing those clients and business management?
As per the recruitment process, you will want to undertake a background check. Credit checking agencies allow you to conduct a financial review of your proposed business partner. A lengthy pre-partnership discussion may also reveal that while your partner of choice ticks all the boxes professionally, distractions in their personal life could impact upon the business and their commitment to it. If you are looking to partner with a family member or spouse, will you be able to separate your personal and professional roles? It makes good business sense to utilise the services of an accountant and lawyer to determine the type of business structure and the general rules of engagement – the partnership agreement.
Business partnerships come in the forms of person-to-person and business-to-business. They often begin through past business relationships ,networking events and memberships. Like a marriage, some businesses partnerships are made to last while others simply aren’t. They were not compatible. Clearly defining the function each partner plays within the company before the partnership begins can allow you to determine if the partnership is likely to be long-term. It will not be easy to find your perfect match, but if you take the time to do your due diligence you will avoid making a disastrous business decision for your company’s future.