You’ve decided it’s time to find yourself a partner for your business, or perhaps you’re looking to start a business and you think it would be best if you weren’t alone. However, the first thing to consider is whether you need a partner at all. Perhaps an employee would be a better option as he or she would still share the workload, but wouldn’t expect a stake in the company. Nevertheless, if you’re just getting started and you have the opportunity to attract someone with whom you share a vision and who has better contacts and a different skill set, then a partner is probably the way to go. As you get closer to finishing the hiring process, here are a few things you might want to consider in order to choose the right business partner.
1. Do their qualities complement mine?
If you’re shy, you might think you want a fellow shy person; you would certainly get along well together, but consider how unhelpful it would be when it comes to the all-important outside contact. You should find someone who compliments your characters, for example someone who would be able to network if you are the shy one, or someone that’s good with the details when you’re more creative.
Think about how much time you’re going to spend with this person, and think of it in terms that you’re essentially hiring your new best friend; many of our friends are the same as us, but it’s the ones who are somewhat different to us that really help change us. Find a partner who, like a good friend, will stop you from acting too rashly or will encourage you to take risks, and success will follow.
Gallup conducted research into why partners need complementary strengths by asking randomly selected participants to respond to three statements; a positive response indicated a partnership that would be successful, while a negative response was an indicator of failure. The three statements were:
- We complement each other’s strengths.
- We need each other to get the job done.
- They do some things much better than I do, and I do some things much better than they do.
They were asked to give a score from 1 (worst) to 5 (best); while an average of at least 3.6 was "good", any statement being scored lower than a 5 was seen as a sign that it was not a perfect partnership. Exceptional teams, they found, should score 5.
The best partnerships are those where both parties are aware of their strengths and weaknesses and how their partner makes up for it, and where both are able to easily fill in this sentence: "I bring x to the partnership; my partner adds x."
2. Do they share my passion?
There are three things you need to consider here:
Do we share the same passion?
If you’re a bit of a workaholic and you try to partner with a more laid back person, you may find yourself in much the same position as you started in terms of workload. You need someone who wants what you want and who is ready to put in their share of work or else it won’t be long before you start quibbling because your partner lacks motivation or interest in helping you.
Writing for Entrepreneur, Michael Kaleikini suggests three ways to go about looking for this person:
- Social media. Joining a group on Facebook and interacting with the people who seem to share your values can be a good way to build a relationship with them and see how you get along before the word "partner" is even mentioned.
- Hire an intern. If you’re willing to work with someone younger, an intern is someone with a proven interest in your area of work and, if you’re willing to take up the challenge, someone you can mould and share your wisdom with in order to create the perfect partner.
- Hire an employee. Working with them as an employee first and then offering them a partnership is almost like a trial run to see how well you work together; you gain the benefit of seeing if you’re a good fit before becoming partners, and they will appreciate the trust being put in them when you offer the promotion. Additionally, becoming partners after establishing an employer-employee relationship could help avoid any power issues.
Do you share the same commitment?
There’s no denying that a business needs a lot of commitment; if they aren’t as prepared to work 24/7 as you are, that isn’t necessarily a deal-breaker, but you should find out what their expectations are on how much time and effort they’ll be putting in, and decide if it’s at least the minimum of what you would like from them.
Remember that this goes beyond how much they promise to be in the office, and look at their home life:
- Are they happily married, or happily single?
- Do they have a pregnant wife/girlfriend?
- Do they care for someone, such as an elderly parent or sick relative?
Do we share the same ethics?
Chances are that at some point of your business life, things are going to happen that require a major decision to be made. You may have two choices; take the harder route, or take the easier route that may be questionably legal. While you might not need to agree on everything, your partner should be someone whom you trust not to make a decision you would never make.
You can check this by looking into their history, for example a time when they couldn’t meet payroll; did they take out a loan? Pay the employees as soon as they could? Or just sweep it under the rug, breaking federal law in the process? Whatever they did, could you work with someone who did that?
3. What is their financial situation?
If you’re going to trust this person to help you with your business and your money making idea, you need to have an idea of their business sense and how they handle their own money first. Knowing about their current expenditure, such as mortgage, loans or ex-spouses can help you see how responsible they are and how realistically they budget; are they good with money or are they going to be looking to borrow or get a raise?
It doesn’t matter whether or not they make financial contributions; rather, if they have debts, or are consistently in trouble, it can be a sign that they aren’t the best at managing time, money, or assets. And if they can’t manage their own, why would you bring them in to have anything to do with yours? In the worst case scenario, they may only be looking to go into business with you for your money.
Marco Carbajo of allBusiness discusses how one partner’s bad credit can hold the company back and three ways to address it:
- Transfer of Ownership. Rather than each of you maintaining your 50 percent share, transfer 100 percent of the business to the partner with the strong credit rating. This private transfer will help you when applying for credit with a bank.
- Start a personal credit recovery plan. Reassure the partner that the above tactic can always be reversed once their credit improves.
- Establish Business Credit – Don’t forget that the company itself can have credit; work to build it by having suppliers extend credit to your business without needing to look into your credit, and in the long run the good credit of your business will make your personal credit less important when trying to get financing.
4. What can they bring to the partnership?
If they’ve got this far, there are probably a few reasons you’re seriously considering them as a potentially good fit. Here are a couple of the things you should be thinking about looking into a little deeper first, according to Company Partners’ list of ways a business partner can help you:
- An injection of funds. Investors may also be invaluable when it comes to funds, but a partner who has invested money in the business is a partner who will be even more involved and motivated in helping the company become a success. But first, make sure they really can offer up the investment money they claim they can.
- Market knowledge. If your partner has more experience in the market you want to branch into, or perhaps experience in another similar market that could prove useful, they can use that knowledge to help with your marketing, and it turn help with the authority and credibility of the business. Additionally, you might want to check that their previous dealings ended well and you aren’t about to partner with someone with a reputation that will drive customers away.
- Contacts. This may mean customers, experts or investors with whom your partner is already connect to, ideally these people could help your company grow. However, it may be a good idea to check that they really do know the people they claim to know before you try to make use of a contact.
- Companionship. You might think you like the idea of being alone, and that meeting customers and suppliers will be enough contact for you, but consider how having a business partner will give you someone to share the stress, worries and workload with as well as someone to talk to during the quieter periods.
It can be hard to go into business alone, but doing it with the wrong partner can cause even more problems; hopefully this article has helped you with a few things you should pay close attention to when trying to find the person that will help you become successful. Remember that a business partner isn’t the same as a boss or an employee that you only have to deal with from 9 to 5 and you should take choosing them as seriously as any other major life decision. There is a reason that the term "work spouse" was coined after all.
Have you ever had to choose a partner? What criteria did you use in the decision making? Let us know any tips or advice you might have in the comment section below.