Four Tips for Finding the Right Partner
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- What are the core values of the business? Is it important that the partner share all these values or just most of them? How important are the personal values of the partners (yours and anyone else’s)? These questions go beyond the mission statement. They go to how the central players of the business operate. For instance, a partnership between a workaholic personality and a laid-back partner may not be a good idea because the workaholic will eventually feel as though they are doing most, if not all, the work and become resentful, even if it is not true. The same applies to attitudes on everything from customer service, to integrity, to fashion-sense (imagine someone who prefers working in shorts, sharing an office with someone who “dresses” for work, to pricing and profits. It’s also helpful to share a sense of purpose and for all parties to share similar expectations regarding the business.
- Do the partners’ skill sets compliment each other? Not everyone can do everything. Sometimes the motivation for adding a partner is to add those skills the other partner or partners don’t have. For instance, a business that operates around the clock may need one partner who is a morning person and another who is a night person, and a service firm may need one partner who performs the service and another who sells it. At the same time, the partners have to be able to work together, so while having a team whose strengths and weaknesses balance each other can make the business stronger, be sure there are enough similarities between partners so that they don’t end up constantly butting heads over every issue.
- Are all partners created equal? Are the expectations the same for every partner’s participation and contribution? How are decisions made if partners are equally divided on what to do? Does the business need a clearly defined “boss”? It’s tempting to think that everyone who contributes to a small business, especially one just starting up, should be equal. And there are cases where employee ownership, even of large companies, has worked well because everyone has a stake in the business’ success. This approach is not without risk, however. Equal partners need to have made many decisions in advance, not the least of which is what to do when they disagree. There’s also the fact that sometimes a younger, less experienced partner may benefit from having an older, more experienced partner with an established reputation. In such cases, it is possible that the older partner may be “semi-retired” and willing to lend their knowledge, name and even financial support to a business but not to spend 60, or even 40 hours a week working at it.
- What is the exit strategy? This is sort of the business equivalent of a pre-nup. No one really wants to believe that their business relationship will come to an end, particularly in the rush of starting a business. All business partnerships, however, do come to an end eventually, either through retirement, sale, or just plain different business or life paths. Having some idea of how the partnership will end will give everyone more security from the start.
There are many things to consider before becoming part of a partnership. It is not a decision to be made lightly. A close examination of the purpose, expectations, and goals of the partnership is merited, especially if the partnership is going to last and prosper.