Choose your Business Partners wisely
Bringing a partner into your business can be exciting. But, that excitement always gives way to the day to day grind of work. Here we have collected some advice from experienced Entrepreneurs, their experiences with partners and how to avoid the pitfalls they have faced.
A partner should always bring to the table something different from what you bring. For example, if you are creative than you may need an analytical partner.Make sure that you will each have your own areas of the business to specialize in.
Make sure that each partner has a clear understanding of their expected contribution and the legal ramifications if obligations are not fulfilled.
Prioritize paying for legal advice and contracts when setting things up. Are they willing to put everything in writing? It is alluring to believe that a handshake is enough to form a good partnership. This can be a recipe for disaster. Put all expectations down on paper and potential consequences if expectations are not met.
Not all partners will be interested in participating in the day to day operations of the business. Is this the type of partner you are looking for?It is important that all partners are on the same page.
How does your potential partner handle tough situations? How they have handled situations in the past is a gauge of how they will react in the future. There will come a time when your business will hit a wall. You want a partner of good character beside you when it does.
Is their commitment to the business as strong as yours? If not this is a red flag for the future.
Sometimes there are questions that are hard to ask. But, because they can affect performance or commitment to the business, they need to be asked:
What is a potential partner’s financial situation? Is that person able to live on the salary offered?
Are family issues going to get in the way? Is the spouse really 100% behind their going into business? Talk to the spouse.
Make sure that they are the person they are presenting to you. Some individuals have a talent for first impressions. Verify that who you are meeting is who they really are.
What do former employees say about working with, or for them?
Verify they have money, if that is what you are looking for.
If you need them to be connected, make sure that they really are.
Are they interested enough to ask you questions? Are they trying to determine if you are a good fit for them?
Lastly, determine if you need a partner, or if what you really need is an employee. Employees are easier over the life of a business. Determine your real need.
Lastly, put a framework into place that addresses potential and unforeseen problems. Just as every business should have an exit strategy. You should have documents in place, just in case you can’t work it out.