Finding the Right Business Partner
Criteria to Consider When Seeking a Sound Business Alliance Partner
Latch onto the keys to unlock a prosperous business partnership. Grasping these essential qualities will help you form a dynamic duo that will drive your business to new heights.
Sure, there are numerous reasons why people decide to bring in a business partner, and motivations vary significantly from one company to another. Before heading down the partnership path, however, take a moment to think about what's crucial for you. Is it a partner who'll chip in some cash but lets you call the shots? Perhaps you seek someone who'll challenge your ideas, or one who'll offer valuable connections and resources. Above all, though, look for a partner who can propel your business forward with their expertise, inventiveness, and vision.
Here are eleven qualities that every business partner should have:
#1 Cover Your Bases
The very first attribute to look for is one that complements your own skills. To create a formidable team, business partners should have different strengths and weaknesses that mesh perfectly. For instance, if you're a sales wizard but lack organizational skills, you may want a partner who excels at project management and keeps things running smoothly behind the scenes. On the flip side, duplicating efforts with someone who mirrors your existing skillset is a waste of time.
In an article for Entrepreneur, Jessica Dennehy cautions that such Redundancy Rascals will lead you straight to Sunk Cost Street. When you and your buddy are too similar, you're merely doubling up on responsibilities. Instead, you need that perfect yin and yang - partners who can lean on one another, trust one another, and rely on their distinct abilities to ensure your business is well-rounded.
#2 Play Nice Together
Like peanut butter and jelly, your business partner should mix well with you. Personality clashes can spell disaster for your partnership. You and your potential business partner should share similar work ethics, communication styles, and approaches to problem-solving, making it easy to collaborate and work towards common goals.
Remember, this process requires patience and effort. Rushing into a partnership just because it seems convenient or profitable could lead to more trouble down the road. Take the time to develop a genuine relationship based on trust, respect, and mutual understanding.
#3 Agree on the Dream
Your goals should align with your partner's long-term vision for the firm. It's important to ensure that everyone's on the same page from the get-go, preventing confusion and disagreements in the future. Before signing on the dotted line, make sure their ambitions mesh with your plan for the company.
#4 Share the Same Core Beliefs
As with your long-term goals, your potential partner should share the same core values as you do, such as work ethic, social responsibility, and trustworthiness. Shared values help build a strong foundation for success and enable trust, enabling each of you to focus on the tasks at hand instead of keeping tabs on one another.
#5 Bring Cash (or Connections)
Access to capital is essential for scaling your firm, so finding a business partner who can provide financial support is crucial. Perhaps your personal credit score has taken a dive, or your business credit history is still a sprout. Your partner might have a better credit score and access to more favorable borrowing terms. Or maybe you need a partner with more experience in securing loans, managing cash flow, and making smart investments.
#6 Master the Money Game
Creditworthiness is another vital quality in a business partner. Their credit history could either boost or hinder your firm's ability to secure investments and access lending opportunities.
#7 Have a Rolodex by Their Side
Next on the list, look for a partner with industry connections. Strong relationships with key players in your industry can offer vital assistance in expanding your business network.
#8 Above Average Brainpower
So, you've got a competent team already, but business is getting a bit tricky. Snag a partner with industry knowledge and expertise. Complimentary expertise is the name of the game here, so a partner who's got different skills and experience than you can help take your business to the next level and tackle complex situations head-on.
#9 Radioactive Dialogue Skills
Effective communication and problem-solving skills are essential for a successful partnership. A partner with excellent communication abilities can clearly express their opinions, actively listen, and work towards resolving disagreements in a healthy and productive manner.
#10 Risky Business
Before joining forces with someone, consider their risk tolerance level. If your risk tolerance levels are worlds apart, it could lead to disagreements and conflicts down the line. Instead, look for a business partner whose risk level complements your own.
#11 Let Them Lead (Sometimes)
Effective relationship dynamics are important, and, more often than not, the partnership doesn't require an equal split in ownership or control. Save the 50/50 partnership agreements for sitcoms and superhero movies, folks. Instead, seek a partner who's willing to help but defer to you if necessary. A 70/30 or 60/40 split usually works best.
The Partnership Pact
Before formally partnering, you’ll need a legal document that outlines your arrangement. This agreement protects everyone involved in the event of death, dispute, or other unforeseen life-altering events. In an article for Foundr, Jesse Sumrak recommends that you include "goals for the business, salaries, roles and responsibilities, equity percentages, ownership of the brand, and exit strategies."
Don't forget to address potential hiccups, even if discussing such topics is uncomfortable. According to Than Merril, in an article for Fortune Builders, you must address "the five D's of business partnership" in your agreement: death, disagreement, debt, divorce, and disability.
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