Choosing A Business Partner That Best Suits You
Starting your own business can be scary. You might not be 100% comfortable doing it on your own, which is totally valid! You might be thinking of starting a business with a business partner because there are two of you, or more, depending on your preference, to make sure the business will grow and succeed.
However, having one or more business partners in your business can have some limits alongside those good things. Here are some things to keep in mind when deciding to start your business with a partner in order to establish strategic partnerships.
Values
Just like in any relationship, what builds a strong foundation between two or more people is if the people involved have the same or similar value system. In a romantic or friendship relationship, this value system can be as simple as if you both like traveling. In business, the value system is a bit trickier to outline.
Do remember, this relationship should be business first. If you choose to be a business partner with a friend, our advice is to make sure you have your business relationship and friendship separated.
Before jumping into a business partnership, outline your own values when it comes to business. Prioritize which values are more important to you so you know which you can compromise, if necessary, and which are steadfast and firm.
In the majority of transactions, there isn’t a right or wrong, but a variety of “rights.”
Common Goal
Once you have figured out your values, and you are welcome to discuss them with your potential business partner, you should discuss your goal in starting this business and business partnership. Are you looking for a business that is more long term to help with your retirement? Are you looking for a short-term business opportunity? If both you and your business partner are on different wavelengths in regards to this, it will be hard moving forward.
Think of it like going on a trip. You need a common destination. This doesn’t mean to say that your destination can’t change as time goes on, but you definitely need a starting goal that reflects both you and your business partner’s vision or values.
Commitment
Just like any relationship, like with values, commitment is a big word that should be taken seriously. Between you and your business partner(s), are you willing to devote all your time or some of your time to your new business?
This relates to working weekends, working evenings, and sometimes, working during holidays. Starting a business and running a business doesn’t necessarily have set office hours.
Keep in mind as well that, life happens. Situations might come up that could affect the commitment level to the business for a short period of time or longer.
It is good to discuss these things with your business partner(s) to get an idea of each other’s level of commitment and to start an open communication concerning this moving forward. It is easier to discuss these types of things at the beginning moving forward than starting a few years later.
Expectations
Expectation is another big word. It also covers common goals and commitment. We have separated this word into its own section because it also encompasses what each business partner is looking to get out of the business - profit, but also, how much they are willing to give to the business and what their exit will be like.
It is our recommendation to have a “plan” set out for unexpected exits of a business partner or your own departure (or sometimes planned). This should also be discussed in the beginning. Is your business partner available to you for a set amount of years? What will it look like if there are major disagreements in future years, how will you separate?
It might sound cold to talk about such things at the beginning of an enterprise, but having clear expectations and open communication is always the best recommendation.
Financial Position
When starting a business, having some finances to invest into the business is nice to have. However, if, or when business partnerships end, finances can be a touchy subject.
If a business partner invests more money into the business they might feel they own more of the business or have a bigger say in the direction that the business goes. Or, if your business partner has more experience in a particular area they might also feel the same even if you put in more money.
Stating a clear guideline of how the finances are handled and the percentage of ownership will help in the success of your business with a business partner or multiple.
In regards to owner percentage, also keep in mind how decisions are made. 50/50 sounds good, but what happens when there is a stalemate? Look through each business partner’s contribution financially as well as experience-wise when dividing ownership. It can even be 51/49.
Complementary Strengths
This is the best reason to have a business partner or multiple business partners in a business. Both or all of you offer something to the table that helps the business grow and succeed.
Or it should.
When deciding on who should be your business partner, be sure to look for complementary strengths. Even though having a business partner that is just like you is nice, think about the growth and success of your business. For example, if your strengths are more in building the actual products, finding a business partner that has strengths in marketing and bookkeeping would be beneficial. In other words, find a partner that gives you strategic partnerships.
If you could use some help in starting your business solo or with a business partner, give us a call! (832)-371-6642
About the author, Sheles Wallace
Sheles is an award-winning business coach who gets results for her clients.
For over 15 years, she has helped business owners achieve their goals and
take their businesses to the next level. If you're ready to take the next
step in your business evolution and go from an owner who wears all hats to
creating a commercial, profitable enterprise that runs without you, find out
more here: https://calendly.com/sheles/introduction?month=2021-06
