Having a business partner presents a complex mix of interpersonal and business issues, and both need to be addressed for it to work.
If your primary interest is having someone to brainstorm with and to help your business move forward, there may be other options besides a partner. A consultant or coach may be able to fill that role. In that case you’d have the benefit of an objective dedicated mind but would still make the final decisions.
Likewise, if additional capital is needed now, there may be alternatives to giving away your hard-earned equity. Debt is usually preferable to equity unless the partner can add significant value to your business. If an equity partner can open a sizable new market, take on critical responsibility or provide access to valuable resources, it may be worth serious consideration.
Base your decision to have a partner on sound logic and reasoning. Be careful of just wanting to dump responsibility on anyone who will agree.
The purpose of the partnership should be clear in your own mind first. Then you’re ready to determine the qualities and assets a potential partner would bring. A partnership is usually a long term arrangement, so think long and hard as to whether or not you’re ready for that level of commitment.
If you believe that a partner is right for you, you must select very carefully. Here is the approach I would take.
Start with your own strengths.
Draft a job description for yourself first. Plan to continue doing what you do best. You’ll want your partner to be someone with complementary skills and knowledge. Determine what role the partner will play in decision-making and operations. Remember a partner does not have to be 50-50.
Identify the values you seek.
Whether this person fills the partner role or functions as a key team member, he or she will influence the image of the company both internally and externally. If commitment, integrity and honesty are important qualities, set criteria in advance for how you will determine if these are present in any individual you are considering.
Get the word out.
Let the people in your network know what you are looking for. Suppliers, customers and other associates may be able to make an appropriate referral, but use discretion and common sense when deciding whom to inform. Emphasize what’s critical.
Have an open mind.
You may find someone who is an ideal working partner but doesn’t have the money to invest. You may also find a potential investor who does not want to be a working partner. Finding the ideal working partner with money may be difficult. Be open to what makes the most sense for you and for the business.
Learn all you can about a potential partner.
Check references and credit history, even if you know the person well. This is especially important if the person will become an equity partner. Ask questions to determine the person’s drive, motivation and ability to be a self-starter. You’ll want to be able to hand over responsibility with confidence, knowing there is a clear incentive for the job to get done.
The challenge is to find the right person the first time. Before finalizing any arrangements it might be a good idea to bring in the candidate on a trial basis. Far too often I see business partners who are not a good fit.
Whatever the final agreements, make sure you set out the terms in writing with the help of your legal advisor before finalizing.
Before committing to a partnership download the f-r-e-e Business Partner Questionnaire. Both you and your prospective partner should answer the questions individually. Then sit together and see where you’re together and where you’re apart. That’s the place to begin the kind of dialogue you will need to continue in order for your partnership to be successful.