Your Potential Partner Has the Money, But Can You Work Together?
I can say from experience that you'll certainly learn more from your mistakes than your successes, but there's also limited virtue in making a lot of mistakes. One of the best ways I've found to avoid them is by bringing on a partner who complements your experience. While it's still possible to collectively make bad decisions, the chances decrease significantly when two or more minds are working together to address business issues and opportunities. Even having a partner to play devil's advocate can be a great asset.
For a partnership to function, both individuals need to know their specific roles and responsibilities. Ideally, there's very little overlap to prevent confusion, in addition to a level of transparency that allows both people to know they can rely on their partner. Trust is crucial in any partnership -- having gone into business with both a spouse and someone I just met, I can tell you that both can lead to failure over time, but you're more likely to have the direct and often difficult conversations with someone you know.
To ensure you and your partner have compatible visions for success, you have to ask tough questions. You're essentially hiring this partner, so you need to know as much about him or her as possible, from work experience to industry expertise to preferred communication platform. What does this prospective partner hope to gain from the partnership?
It's important for all parties involved to visualize where they see the business in five years, 10 years, and even further down the road. It's not uncommon for partners to have different motives for running a business, but as long as your methods of achieving your goals are aligned toward the same end result, the partnership can be beneficial and successful.
Partners vs. Investors
Especially if you have a promising idea, finding investors is often easy. Investors, though, are generally after one thing: return on investment. Producing significant investment returns is something that takes time, and investors might not have the patience to stick around long enough to realize that return. A partnership, on the other hand, is a larger commitment. A partner agrees on the core objectives of the business and plans to see the business become a success that only later is reflected in personal income or ROI.
Money can often cloud judgment, so before it's even discussed, ask your potential partner the following:
1. What are your strengths and weaknesses?
Your partner's strengths should complement your own, not echo them. Any partnership should round out the needs of the business. If accounting and finance are your strengths, your ideal partner might specialize in marketing and sales.
2. Can we be completely honest?
Efficient communication is key -- there's no time to beat around the bush when you're trying to run a business. If it's critical, keep it constructive. Communication should be open, honest, and fair.
3. Have you ever fudged the numbers or modified the truth to meet a professional or sales goal and gotten away with it?
It's difficult to assume your potential partner will be honest here, but you'd be surprised how many people can be goaded into answering a question about something they got away with. Assess for yourself whether your partner's story tells you anything about his or her constitution and provides insight into how much you can trust him or her. Be prepared to answer this question yourself.
4. What are your business objectives?
Is it all about making money, becoming well-known in the community, earning the title of "successful business owner," and other ego-driven objectives, or is your potential partner ready to take ownership of the successes and failures of the business? The latter will require work and patience but provides more of what you should seek in a partner. Just be sure your partner is prepared for the sacrifices this may require.
5. Have you ever been sued or arrested?
Agreeing to mutually undergo a background check and share the results will help ensure that people answer this question honestly -- and what a person is willing to volunteer will speak volumes about his or her integrity and honesty.
In many ways, a partnership is like a marriage: You probably weren't ready to get married after your first date and vetting potential business partners should involve similar careful consideration. If your partner brings money to the table, ask yourself whether you would be willing to partner up even without it. If the answer is "yes," it's probably safe to proceed. If not, you may want to keep looking.
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