Five steps to choosing the right business partner

business partner

Is 2016 is the year that you take the leap to start your own business? If so, what is your strategy? Do you have your ducks in a row? And, more importantly: are you going it alone?

Every small business owner understands the pressure of starting a new venture. Cash flow will be tight. There might be months that you can’t draw a salary. And winning that first deal is always that little bit further away than you probably anticipated.

One way to reduce some of the pressure you’re likely to face is to tie up with a business partner, or two, or three.

The big question is: what kind of partner should you be looking for.

Play to your strengths

Karen Venter, a trainer for the United Nations’ Empretec international entrepreneurial programme and  owner of Innovate Biz that specialises in training entrepreneurs, says the ideal partner/s should have skills that complement your own.

“In general, look for a partner that has strengths where you have weaknesses,”she says.

It makes little sense to duplicate roles or responsibilities, particularly as you need to hit the ground running while covering as much ground as possible. It may be tempting to align with someone who also has strong sales skills – if that is your area of expertise – but it makes more sense to find a partner proficient in production, or procurement, accounting or even the legal aspects of your business.

Vision and values above all else

The strength of complementary skills really only comes to the fore if you share the same vision and values as your partners.

It is very easy for business growth to suffer because of diverging vision. A small business, especially, has to be single-minded in what it is trying to achieve and how it is going to do that. The last thing you need is to be wasting energy on internal misalignment when you should be focused on generating sales and managing cash flow.

Karen suggests that you engage in frank and transparent discussion with potential partners to ensure that you are clearly aligned on where you see the business going, how you’re going to achieve that and what your ultimate goal is.

Best friends forever?

It is not uncommon for friends to go into business together. There are obvious advantages in that you will have a better understanding of each other than with a newly-acquired business partner.

Karen suggests you carefully assess whether a friendship is a good enough reason to start a business together. Does your BFF, for instance, possess complementary skills needed to grow the business?

And, will your friendship survive a business fallout?

Unity is strength

Apart from the question of complementary business skills, Karen says one of the great advantages of a business partner is that you can share the trials and tribulations, highs and lows of running your own business.

Walking the entrepreneurial journey is that much easier when you’re able to share the load and have someone else to lean on.

Karen makes the point that it is also critical that your partner has as much to lose, or gain, as you do. A partnership requires shared risk and reward. If this relationship is unbalanced, you may find that you bear more of the burden if your partner is not as invested in a successful outcome for your business, and therefore possibly not pulling his/her weight.

Get it down on paper

This should probably be the starting point for a business partnership – certainly from a legal point of view: draw up a partnership agreement.

All the above are necessary ingredients to a good business partnership, but without a legal document that underpins it you could be setting yourself up for unnecessary pain.

Such a document should outline roles, responsibilities and contributions to the business, but almost more importantly it should stipulate how disputes are settled. By clarifying this up front, you and your partner/s will have certainty of the rules of engagement.