Choosing the right business partner is similar to choosing the person you are going to marry. It could make or break your business. You regularly interact with this person and your credits are tied.
At the start of a business partnership, just like a marriage, it’s always exciting. Everyone is eager to make money and do well. But years later things might get tough.
Considering these five things will help you choose the right business partner so that you do not get into long term conflict.
Know the person well
Before getting into a business partnership, you need to know the person well. Choose someone with a personality that works well with yours. Ask about their work background and verify information like where they went to school and their work record.
Make sure you have worked with the person in some capacity before. Try some joint venture on the side to see if it is a good fit or not. Then go from there.
Choose a partner who shares your values
You may have skills that complement a potential business partner’s, but it does not mean that you share the same values. So, you must deliberately find out if have similar values or want the same things for the business.
To determine if your values align, consider the top values that you have. For example, your top values might be family, making an impact in the community, and creating wealth.
Then find out what your potential partner values most. If they value creating wealth most and family is lower in the list, you could get into conflict.
When you need to make hard decisions during difficult times, many people make decisions based on what they value the most.
Get an early commitment
If you are a start-up partnering with a big company, have an early commitment from them. The person you are working with could get reassigned or fired and everything will go south. If you have an early upfront financial commitment from the company, you will not suffer losses.
Sign a contract
While you might get along with someone because you have known them for a long time, money may cloud things. To avoid this, write and sign a contract no matter what the size of your business is.
This includes an operating agreement stipulating all partners’ roles and responsibilities. This will eliminate problems in business if it’s clear who does what.
If possible, bring in a third party like a consultant or a lawyer to help you put it together and sign it and keep copies. This way, you will have peace. There will also be order in the partnership.
Find out how they handle conflict
It is common for business partners to get into conflict. You want to know what your potential business partner would do, should you get into conflict. Then have this information in writing.
If they tell you that they would sue you, instead of talking it out, then they might not be the right fit for your company.
These five guidelines will put you on the right track to getting an amazing business partner. For more advice on business strategy contact us.