We’ll Answer
How can a partner help my business?
What factors should I consider when choosing a business partner?
What factors should I consider when structuring my partnership?
Imagine Ana raises and trains parrots. She’s really good at it, so she’s going to start a business. But, as a first-time entrepreneur, she wants to find a partner.
Ana has a few people in mind. There’s her friend Pablo, who’s also a talented parrot trainer. He’s never been involved in a small business either but wants to give it a shot.
There’s Ana’s sister-in-law Gabriela, who’s a ferret trainer. She’s never worked with parrots, but she has a lot of experience in the pet industry and would bring a wide network of professional connections.
And there’s Ana’s cousin Carla, who has a lot of energy, but who’s never had a job. She doesn’t know anything about pets or starting a business, but says she thinks she’d be great at it. Let’s help Ana figure out who would make the best business partner.
In business, two heads are often better than one. It’s simple math. As a team, Ana and Gabriela can share the workload and get twice as much done.
They’ll also benefit from the power of collaboration. It’s harder to be creative and innovative by yourself. Having another person contributing thoughts and giving feedback can result in better, more developed ideas.
Business partners are especially valuable when they bring complementary skills you don’t have. Ana knows parrots, but not the pet business. Gabriela has lots of experience in the pet industry and can help Ana navigate its challenges.
Plus, Gabriela knows ferrets, a unique skill Ana doesn’t have. So to make their partnership more dynamic, Ana and Gabriela decide to combine their expertise and start Parrots and Ferrets, a business that breeds, trains, and sells both kinds of pets.
Because of her experience, Gabriela also has industry contacts. Her connections could help with marketing, funding, hiring, or any other business aspects that require reaching out beyond the skills and resources that are immediately available.
LISTEN UP
Finding a partner who complements your skills can have the added benefit of giving potential investors more confidence in your business. This is especially true for someone like Ana, since she’s never started or run a business before.
To find the right business partner, make a list of potential candidates and ask yourself some important questions about each of them.
First, ask yourself if they’re someone you enjoy being around. You don’t have to be best buds with your business partner, but you’ll be spending a lot of time with them, so you should at least have a good working relationship.
Second, ask yourself if they’re someone you trust. You’re going to be legally and financially tied to this person, so it’s vital that you have faith in their abilities and their commitment to your shared success.
Next, think about how you like to work. Is your potential partner’s work approach compatible with yours?
Maybe Ana likes to show up later in the day and wants to train parrots and ferrets in a laid back style. But Gabriela shows up at the crack of dawn and wants to instill discipline like a drill instructor. This could lead to conflict.
Having different work styles isn’t necessarily a deal breaker, but it means you need to acknowledge each other’s approaches and talk about how you can best work together.
Being able to communicate effectively and work out differences is an essential part of any good business partnership.
Before you pick a partner, you need to consider how they handle conflict and whether their communication style will work with yours.
Disagreements are inevitable, so you need someone who’s open to honest dialogue and compromise. Neither of you should ever be afraid to give feedback or challenge the other’s ideas.
You can like and trust someone and work and communicate well with them, but that won’t lead to success if your visions for the business aren’t in line.
You and your partner should have a similar picture of what success looks like and how you’re going to get there. If you’re not working together towards the same goals, it defeats the purpose of having a partner.
For example, if Ana wants to focus totally on parrots and ferrets, but Gabriela wants to expand to dogs and cats and other pets, that’s a fundamental conflict that could undermine their partnership and business.
It’s also important that you both bring a similar level of passion and enthusiasm for the work. If Ana cares about raising healthy animals and training them well but Gabriela just wants to make money, they’re going to clash.
When you find someone who shares your vision and who you work well with, do your homework and learn more about them.
Have they started a business before? If so, how did it turn out? And how do the people they worked with on that business feel about them and the work they’ve done?
Ask others who have worked with them (like other partners, clients, and co-workers) about their personality, their working style, their skills, and their weaknesses. Are there people who dislike them? If so, find out why.
It can’t hurt to check out their online presence too. Search them and see what comes up. Look at their social media pages to see if there’s anything that gives you pause about how they present themselves to the public.
Once you’ve settled on a partner, you need to agree on important matters such as the financial terms of your partnership.
Trust is crucial, but it’s important to put your agreement in writing. Consider elements like how profits will be distributed, funding will be used, and ownership of the company will be structured.
Additionally, think about how equity and stocks will be divided and what will happen if one of you leaves the company.
There can be a lot to think about, so consider consulting a lawyer before you sign anything. A lawyer can walk you and your partner through the legal implications of your partnership so everyone is on the same page.
DO THIS NOW
Hopefully you have potential business partners in mind. To help you think about how compatible they would be, let’s help you nail down your work preferences and skills.
