What to Look for in a Business Partner
The decision to seek out a business partner can be challenging for any CEO or business leader. First, there’s the internal voice saying, “I don’t need anyone’s help! I can do this myself!” Then—when it becomes clear that having a partner is a good idea—there’s deciding who to search for, how to make the right approach, what guidelines to work by, and so on.
Looking for a business partner to complement your strengths?
Find your match at one of our MasterMind Groups.
Finding a Good Business Partner
Some business leaders may conclude that having a partner is just one more responsibility than they wish to take on. Others may conclude, by contrast, that without a high-quality business partner, the enterprise they lead might suffer.
Thus, it’s critical to know what to look for in a partner so the selection process becomes less arduous and, ultimately, more productive. Understanding the most desirable personality traits and other factors can help ease the search and produce the best results.
Here are tips to guide this all-important search:
Find a person with traits and talents different from your own.
It seems illogical to choose a business partner whose temperament, experience and perspective closely match your own. Who needs “two of you”?
Seeking an individual with a different worldview makes more sense. For example, notes Bplans, “a founder who is quiet, reserved, and good at one-on-one interaction might do well to find a partner who is more gregarious and enjoys the spotlight.” Similarly, a business leader with a “tendency to pursue every shiny thing that flits into their path” would be wise to “seek out a partnership with someone a little more measured and grounded.”
Identify an individual with the same vision.
While complementary skills suit a partnership well, the same can’t be said for having divergent visions for where the business is headed. When inviting an individual to become your partner, it’s imperative that you both share the same strategic goals and mission. (One of you can’t be focused on growing the business, while the other intends to sell.)
Look for a partner who will challenge your thinking.
Part of the idea behind seeking a partnership is embracing the opportunity to see the business through a different lens. The right partner will generally agree with your vision, but he or she may have strongly held tactical views different from your own. Examining these contrasting perspectives can result in both a stronger business and a stronger partnership overall.
Make sure your prospective partner can make decisions.
The stakes in a business partnership are simply too high to enlist a person who lacks strong decision-making skills. “The last thing you want to do is partner up with someone who doesn’t have the guts or ability to pull the trigger when big decisions need to be made,” notes Fox Business. Your enterprise will benefit by having someone “who’s able to commit to decisions rather than waste your time being wishy-washy.”
If you’re fortunate enough to whittle down your prospective partner choices based on these and other appropriate measures, here are proceeding steps to take:
Establish the appropriate business structure.
Businesses can be structured as general, limited or limited liability partnerships (or as a C-corporation or S-corporation). Depending upon the circumstances, there are potential benefits and drawbacks with each configuration. Discuss the right option with your attorney or other trusted advisor to determine what’s best for your business.
Make sure partnership roles are clearly delineated.
A vague or ambiguous partnership arrangement will almost inevitably resolve in unwanted confusion or strife. As SCORE notes, “Defining each partner’s job title and duties helps eliminate disagreements by giving each partner control of his or her domain.” Just as importantly, employees and customers “also benefit from knowing which partner handles what aspects of the business.”
Get it in writing.
Whether the focus is on a startup or an established business, it’s essential to consolidate the proposed partnership in writing. Legal documents should be drawn up concerning how the business will be structured, how and where capital from the partners will be distributed, and the intricacies of decision-making and the resolution of potential disputes.
What happens if the partnership doesn’t pan out? Options for dissolving the arrangement should also be spelled out ahead of time in writing.
Give credit where it’s due.
Forging a successful partnership means keeping one’s ego in check. Just like leaders in any other field, business owners and CEOs sometimes come to feel that the only good ideas are the ones they have themselves. That mindset doesn’t work in a partnership situation.
“Successful partnerships can be ruined when one partner wants to take credit for everything,” notes Small Business Trends. When your partner offers suggestions for operational issues that make the business run smoother, be sure everyone knows where the great ideas come from. “If one of you dominates the relationship, the business partnership won’t last long.”
As we have noted elsewhere, a strategic partnership with a business whose products or services complement your own can prove enormously beneficial for everyone involved. Consider the potential new markets you can explore if you and your new business partner actively share efforts related to branding and marketing, new product development, technology purchases and more.
Making Your Business Partnership a Success
For a business partnership to succeed, it must be based on trust. Never rush into a joint venture. Take time to closely examine each prospective partner’s strengths and weaknesses, then proceed step by step to broker the kind of partnership that will last and lead to a stronger, more efficient and profitable business.
Deciding whether or not to pursue a partnership isn’t a decision you have to make on your own. As a member of Catapult Groups, you have access to seasoned business leaders whose experience and insights help guide one another to the best outcomes for their companies. Contact us today for a free consultation and see if we have the right solution for your business!