7 Basic Tips for choosing a Business Partner (Lessons I have learned)
When entrepreneurs have a business idea it is normal to look for an ally to help them make the project a reality. This decision, which according to experts in business management is one of the most important in the development of the business, and should not be taken lightly.
“You have to be very careful when choosing the person who will accompany you in the business, since it is with whom you will have to make important decisions, generate plans and assume responsibilities,”
If you have a business idea, the right partner can help you achieve your goals more quickly and efficiently. For example, you could do double the sales of what you had projected working alone. On the contrary, if you work with an inadequate partner, the most likely thing is that you will not achieve your goals or you will delay them enormously. Hence the vital importance of choosing well the partner you want to work with!
You have an innovative idea and plan to start a startup. Among the most important decisions when starting your business is the possibility of associating with another entrepreneur. The success or failure of a small business depends on this choice of partners.
Over the past 10 years in efforts of doing business, I have observed actually on how productive a good business partnership can be. On the other hand, I have also practiced what happens when you pick the wrong business partner.
Let me share that in my first company I had two partners, one of my partner was my good friend from many years and other one was my colleague in a company. We stayed together almost two years in business and retired when the company had its significant crisis. After the first company’s crisis, we did that mistake again, the same three persons including me, started a company another time but failed again. There was a distancing derived from the whole situation that we had our friendship as a direct cost. Now that I can see it in an objective way, I know that the main mistake in our relationship as partners was not the low sales, nor the minimum profits nor the badly divided work; it was mainly one thing: Lack of CLARITY to communicate what we expected mutually from the company and from our respective roles in it.
Later, when creating my third (current) company, I had the great idea of starting it with my best friend. So, I get started with implementing all experiences that I gained from the past. we managed to properly divide everything and maintain an excellent relationship with my partner. The company is doing very well and we had to keep working together!
For all this is really IMPORTANT, even more so if you have a personal relationship involved, that if you are going to have a business partner you should be very clear about the following tips:
- Be honest
- Say what you expect to RECEIVE
- Say what you are willing to GIVE
- Clarifies and negotiates the balance between your contribution and your earnings
- Divide workloads
- Separate personal and professional ROLES.
- Clarifies very well the initial investment and the division of it
Good business is like good marriages: the prenuptial and the divorce act are prepared from the beginning. It may be that divorce never happens but if it happens you already know exactly what belongs to you.
The right choice of partners of a startup is essential. In a small environment, with great collaboration and a minimum margin for error, this association has to work. It is useless for a partner to be good but not contribute anything to the business. Neither helps a partner who has knowledge but has a bad relationship with you. So, how to make this decision?
Care in the choice of partners
It is necessary to establish the number of partners you will have in a society and decide who has the ideal profile, be it a friend or not. Think that if there are problems of coexistence the company can fall apart. For that reason, remember to evaluate the following characteristics so that the society is successful and lasting:
Expectations, values and objectives
Before signing the contract to consolidate the partnership, discuss these three issues with potential partners. It is essential that expectations, values and objectives are aligned to avoid problems in the future. Explain what your vision is and listen to the opinion of other people.
As you will spend a lot of time with business partners, it is essential to take these factors into account. You should know that throughout the trajectory you will face difficult situations in which you will need the other. With a good relationship the difficulties decrease.
Leadership is an important characteristic among entrepreneurs. It is the ability to lead that makes partners develop ideas and concepts, driving business. You must find a partner that has different competencies than yours, because this will bring another kind of value to the business.
Good communication and trust
Having confidence and a good communication skills are very important qualities in business. With good communication partners can define the most important objectives and coordinate actions, in the most efficient way, to achieve them. All this contributes to the success of the company.
What to do to associate
Finally, when society is created, more doubts arise. What will be the role of each entrepreneur in the business? What are the expectations in relation to the company? How to divide the profits? All this must be taken into account.
Before starting, it is necessary to establish the responsibilities of each of the partners, the goals and the distribution of the profits. Working time is also a factor that must be decided in advance. Do not stop making a formal partnership contract.
In addition, it specifies how to proceed in case of dissolving the company. Although no one likes to think about it, the rules of dissolution are also important.
If you have any questions, suggestions or advice on this subject, comment below. Take the opportunity to share this content with your friends and collaborators, through social networks.
What qualities should you look for to choose the right partner?
Here are some basic qualities. It is not easy to find the ideal partner, but it is worth investing the time and energy in looking for it!
- The right partner will be someone who is motivated by business and your idea:
Motivation is key to the success of a company, and therefore, your partner must be as motivated as you are. If there is a problem, the two join forces to solve it. If you are demoralized, the other partner gives you the necessary motivation, and vice versa. On the contrary, if your partner does not believe in the idea, he will be the person who will induce you to leave the project aside arguing that “we have already seen that the project is not feasible” or “the competition is very strong”.
- The right partner must have the qualities and / or skills that you do not have:
For example, if you want to launch a website, and you are a marketing professional or have learned a bit of Internet marketing, look for a computer expert who can develop the technical part of the website. If you are an excellent seller, you do not need to associate with other sellers, look for a person who has other important skills for you, such as finances (to request bank loans) or logistics (if you want to sell thousands of products). If you have the idea but do not have capital, look for a person who has the economic capacity to invest in the project. If you are the person with the capital, look for a person with ideas and desire to do things!
- The right partner must have professional ethics:
A responsible partner. You are not served by a partner with whom you coordinate an appointment and do not have time for it. If your partner has a managerial position in the company (this is not always the case, sometimes a financier can simply contribute the capital and not work in the company), a member who works 5 hours a day when you work is of no use to you. . A loyal partner. It is useless to have a partner who after a few months or years will launch a company that will compete directly with you. A partner with professional ethics. A successful businessman works for society. You are useless by a partner who is going to propose you to do things that are not ethical and that go against it (for example that you propose to pay salaries below the market having good profits).
- The right partner should be a person with whom you can have an efficient and constructive communication:
Having a good communication skills is one of the most important qualities in business. With good communication, partners can define the most important objectives for the business, as well as coordinate the actions to achieve them, in the most efficient way.
- The right partner must have entrepreneurial qualities
In conclusion … take your time to choose the right partner
A strategic part (with benefits in the medium and long term) to achieve success in business, is to choose the right partners. For this reason, this stage requires a lot of reflection and time. But since it is a very important decision, dedicate the time and the necessary reflection. Worth it!
In the meantime, I invite you to subscribe to my email list if you want to read more of what I write, tips, offers and adventures for entrepreneurs.