Choosing a business partner
Choosing the right Business Partner is not as simple as shaking hands over a wine on a Friday night.
We work with many startups, most are individuals or husband and wife teams, however some are mates, and it is these partnerships that we provide tips for to avoid any fall outs later on, as in our experience if you do not get this right, it could be the end of a friendship as well as a business.
Tips to think about
Does your partner share the same passion, values and goals and I don’t mean the passion for a fun night out.
Does your partner work hard currently, do they complete tasks, have they achieved goals they set out to chase. A red flag should be if your partner changes jobs a lot or makes big statements but never actions them.
Will you be able talk to your partner straight, are they easily offended. When tough decisions have to be made will they cope. Setting a weekly agenda to follow up tasks is an easy way to approach the awkward conversations and stay accountable.
Do you have complementary skills, for example looking at your own strength and weaknesses, will the gaps be filled by this person. This doesn’t mean you have to be completely different, but having varying skill sets can assist with future success.
Can you trust them, this ties in with our first point. Will they be there for the hard times, will they play their part. If you do not have trust, then it will be hard to move forward.
Is your partner financially stable, this is one of the biggest killers of starting a business with a new partner. Look at their spending, are they a saver, investor or do they currently spend what they earn. In my experience those that cannot manage their own money will not be able to manage a business’s money.
Finally, will their image be good for business, remember you want to be taken seriously by your new clients, suppliers, and networks.
If you have ticked all these boxes and decided to go ahead with a business partner, then you can alleviate the stress down the track if it goes pear shaped by setting up a formal structure before you begin. This includes responsibilities, expected outcomes, financial contributions and how the profit is to be shared, for example if a partner is only working 25% in the business or contributed 20% of the start-up funds, then their share may be less.
It is always tempting to start a business with mates because we want to spend more time with them, but your best friend may not be the best business partner and if they do not have the ability to help you succeed with your goals then you will find yourself in a regretful position.