Choosing the right business partner is one of the most fantastic entrepreneurship resources you can ever have.
At least 75% of CEOs in the TMT (Telecoms, Media and Technology) industry see a partnership as critical or essential to their business – Source: PWC.
Choose the wrong person and watch all your efforts go down the drain.
I have read a lot of stories of how business partners helped entrepreneurs build their businesses into empires.
Sadly, the same cannot be said for the wrong ones.
This reminds me of the story an entrepreneur shared with me. She once got a business partner that seemed like the best decision she ever made.
Everything started well; this business partner was very knowledgeable in the industry she operates. It became effortless to convince and win clients over and close deals.
Once the money started flowing in, the business partner changed suddenly and started making demands that were not part of their initial agreement.
To cut the story short, she had to let the business partner go for a while because the working relationship became toxic.
Why do you need to do a thorough job in choosing a business partner?
The thing with many entrepreneurs looking for business partners is that they are primarily after getting the ones that will close out the most sales.
Only a few do all the background work that needs to be done before settling for one.
Don’t get me wrong; a business partner who can close out deals is vital. But it shouldn’t be the only thing to consider.
There is a need to know this person’s values regarding leadership, finances, clients, and even employees.
Once there is conflict in personalities and the values listed above, then issues are bound to arise.
Now that we have stated the importance of doing a thorough job in choosing a business partner, here are 5 things to consider before accepting one:
Five primary considerations before choosing a business partner
1.Passion
Finding a partner who can take your business as their own will help your business a whole lot. It’s just like someone caring for your child the way you do.
A passionate business partner is such that believes that your business has potentials. And at such will go to any extent to get results.
If the business’s success is not a priority to the person you want to bring in, then there’s no point getting them in.
If you can even get someone more passionate about the business than you are – you have hit the jackpot.
2.Teamwork
Another essential factor to check is if the person believes in working with others to achieve a goal.
Apart from that, there is a need to clearly state roles and designate such to the people in charge.
Why this is important is that some people believe that they can handle any and everything. And so, in situations where there is a need for teamwork, such a person will not do well.
Also, some business partners go beyond what they are assigned to do to show that they can be the boss. While there’s nothing wrong in wanting to be in charge, it becomes worrisome when the purpose behind it is to outshine the actual owner of the business.
3.Trust
If you cannot trust the person – no point in bringing them to be your business partner.
Trust is like the bond that protects partnerships and creates collaborative relationships – Source: Springer Link.
It would be best if you answered some questions like:
How much do you know this person? Can you trust them with your business account?
If the answer is no, then you might want to think twice because every dollar that is not accounted for can bring the business to its knees.
What about the person’s character? Do you know them well enough to expose your business ideas, models, and goals to them?
If the business partner you intend to bring cannot check off this list and more, you are better off alone.
Do not be in a hurry to hire someone because of how good people say the person is. Instead, do your underground job on them. Be sure you can totally trust them before bringing them in.
People indeed change; someone that you trust today can become something else tomorrow. First, however, make sure you carried out your investigation correctly and be convinced that the person is worth bringing in.
4.Complementary Strengths
We have already mentioned that you should get someone who shares the same passion for the business. However, it’s also great if the person’s strength is such that it complements your weakness.
It helps to cover more angles and achieve even more outstanding results.
Suppose your strength as the owner of the business tilts more towards idea generation, coordination marketing, sales, and administration. In that case, your business partner’s strength could cover more areas like finance and accounting.
You mustn’t look for someone that shares the same interests you have. Variety, they say, is the spice of life.
Having someone with complementary strengths on board will take your business farther and higher – Source: K-State.edu.
5.Agree on Valuation/contracts
A lot of emotions are usually involved when starting a business or bringing a business partner on board.
Some disagreements on decision rights and financial flows are bound to arise – Source McKinsey & Company.
But to secure the business and its future, it’s crucial that certain agreements be reached and signed.
The value of the company/business should be determined, especially when a business partner is involved.
Have a lawyer draw up contracts should a partner decide to leave the business tomorrow. The contract will contain what the consequence(s) will be in the event of such. Also, determine the formula for shares.
Final Thoughts!
As an entrepreneur, having a business partner can help your business in various ways. But be sure that you are ready to take on a business partner.
If your business is doing well, you might want to hold off on getting another person to spearhead things.
A business partner is only needed if you are having some challenges that require one. Or if the business is expanding and you need more capable hands to take charge while you focus on other areas of the business.
But if you are looking for a business partner just because others have one, be careful so that you don’t shoot yourself in the foot.