Should You Take a Business Partner?
If you are considering founding a business, you might also consider the possibility of tackling a partner who helps push you forward. Above all, a partnership provides accountability– this is very important.
There are many benefits to having found the right partner:
Acting on your own, means you have full control of decision making and you have full say in all business operations. However, having a partner gives more perspective, since partners can ask good questions, give valuable input, and spot flaws in the business model.
Launching and running a successful business with someone you trust, could be fun and rewarding.
Facing daily challenges together can result in a lasting friendship. However, serious business disagreements might also spoil a friendship you previously had with your partner.
Disputes about commitment and strategy are among the reasons why partners sometimes can not continue to collaborate.
Going it alone
Working alone means all the motivation and effort must originate from you. It also means, certainly initially, that you should manage all aspects of the business, including areas you may be less that fully qualified for. A business partner can alleviate a lot of that.
Sharing the load
Splitting the tasks at hand, can prevent you from developing tunnel vision, or becoming exhausted and overwhelmed.
Problems can arise however, when clear boundaries have not been set from the beginning, or if commitment is perceived differently by each partner. As an example:
- If this is your dream project, and you are prepared to invest all your time and resources, while for your partner this is just one commitment among many, it could result in friction.
- If you surrendered the security of a pay check in order to set up a business, yet, your partner continues a salaried position, while investing his leisure in the new venture, it might create an imbalance and result in frustration.
Discuss the pros & cons
It is essential to consider and discuss all the pros and cons before the final agreement is signed.
Reward & Risk
If the business succeeds and you are the sole proprietor, all profits go to you, without having to share with a partner. However, right from the beginning you alone bear all the risk. A partnership reduces the financial risk if the business fails.
Sometimes a partnership is mandatory
At times it is mandatory to have a partner when it is impossible to get necessary start-up funding as an individual small business owner.
How to choose a business partner
Before marriage we spend months becoming acquainted with our future spouse, to ensure all bases are covered. In business, all too often a mutual acquaintance introduces a suitable partner, and far less time is invested in really becoming acqainted with them. Unless we partner with a friend, and even then, care and due diligence must be invested in choosing the right person.
In a full 50/50 partnership both partners must have similar goals and be on a similar financial level. It is usually best when both partners earn equally from products and projects.
- A business partnership is a long term agreement between two or more people, who will spend much time together planning and building a business. So, it is vital they get on well together.
- A business needs to be carefully nurtured in order for it to grow. You need a partner who is as enthusiastic and committed as you are.
It is vital that you can effectively communicate with your partner, to set goals, and drive the business forward. Both you and your partner ought to be able to consider the other’s view point, without becoming defensive or combative.
- Ideally, you and your partner are both able to have the hard conversations and even welcome them.
- Too many blinds spots and forbidden subjects create serious problems.
Give positive feedback and amplify your partner’s strengths. A critical spirit drags you both down and the business too.
Find a partner with relevant skills and experience
Your partner’s skills must complement and support your own. Life is too short for anyone to master all skills required in a business venture.
A partner often brings skills to the table that you lack. It is also possible to split responsibilities according to the skills and knowledge of each of the partners. Hence, if one is more technically minded the other might ideally be an excellent administrator.
Look for a partner who brings credibility and resources
Beyond financial resources, there are many other valuable additions a partner can offer your business. These can enhance the business and add to its enduring success.
- A strong business network
- A client list
- Industry connections
- Command high respect in the industry.
Choose a partner with good ethics
In order to enter a partnership you must trust the other person. Seek someone who practices good personal and business ethics and values honesty. A dishonest partner may eventually embezzle the company, take your clients or ideas, or break the law, which could discredit your business and get you into legal trouble.
A partner with personal baggage
You can’t afford a partner with a lot of personal baggage. Serious challenges in a partner’s personal life may carry over into your business, which requires a lot of focus, energy, and time.
Seek financial stability in a partner
You can not have a partner who is in dire financial straits, because a small business needs entrepreneurs with excellent assets, financial solidity, in addition to time management skills. Someone who was weak in those areas in their personal finances might lack the discipline or skills to make a partnership.
Respect is a vital component in a partnership
Never partner with a person you don’t respect, since your main purpose is to achieve success as a team. Your partner also must respect you as a partner, a professional, and as business founder.
Each business is different and regardless if to take on a partner should be weighed carefully, according to the circumstances.
If you do decide to take a partner, it is vital that there be an exit strategy in place – both for the partnership agreement and for the business itself.
Best for you and the business
Regardless if to take on a partner can be dependent on many factors. Toss around options and scenarios until you arrive at a clear decision as to what is best for you and your business.
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