Starting, managing, and growing a business may be challenging, elly if you’re working alone. A partner may help you divide responsibilities, provide invaluable advice, and assist you as you grow your company.
But it’s harder than it looks to find the perfect friend. In such a huge industry, it could be difficult to locate the appropriate partner to help you launch your firm. Finding a suitable business partner may be like searching for a needle in a haystack. It’s only a matter of continuing to look.
But where should I start looking? What should you look for specifically?
This article seeks to answer the questions mentioned above.
We’ll discuss where to look for business partners and what attributes to look for.
You’ll leave with the abilities needed to successfully choose a partner who will help (rather than hurt) your business.
COMPLETE CHAPTER TEXT
- DO YOU WANT TO PARTNER FOR BUSINESS?
- Advantages of Business Partners
- Seven qualities to look for in a business partner
- HOW TO IDENTIFY A BUSINESS PARTNER
- Questions to Ask Business Partners
DO YOU WANT TO PARTNER FOR BUSINESS?
Even so, is a business partner necessary? Before we get any farther into the facts, let’s address this crucial matter.
Many business entrepreneurs have the knowledge and assets required to start a firm on their own. They are self-sufficient. Do you?
There is no right or wrong answer here, but think for a second about why you want a business partner:
- Do you feel as though you have too many critical commitments to complete?
- Do you need help identifying a new market or product model?
- Do you need additional money to launch your business?
- Lacking a network and important relationships, are you?
- Do you need someone to listen to your ideas or provide moral support?
The wisest course of action isn’t usually to add a business partner. You could be better off finding a mentor to offer advice when things are tough or hiring a freelancer to finish a difficult task.
Giving away equity, especially a sizable chunk of it, shouldn’t be taken lightly.
Advantages of Business Partners
Your business’s partners have the power to make or ruin it. Find the correct one, and your success will soar. If you hire the incorrect person, they may ruin your company and turn your entrepreneurial adventure into a living you-know-what.
All in all, hiring a partner isn’t a horrible idea; just make sure you have a compelling justification. Here are a few examples of such explanations:
- Share the weight, particularly in the beginning.
- Have a second mind to bounce ideas and plans off of.
- Recognize that you are not the only one who must decide.
- You can advance more quickly and assume more responsibilities thanks to it.
- You have access to additional connections and networks.
- Dividing the cost of launching a business.
Seven qualities to look for in a business partner
Adamant about finding a business partner? Bravo for you. Now is the time to select the finest.
You’ll be spending a lot of time with your business partner. This individual will likely become the person you spend more time with than your spouse, children, or dog.
You’ll need someone who can self-manage and offer new abilities to the team, and you’ll want to make sure your personalities fit. There are many things to consider, therefore we made an effort to limit your criteria to seven key qualities:
The Business’ Vision
What does your business partner want from it? Are they aiming to develop and depart as quickly as possible, or are they wanting to stick it out for the long haul and establish a firm designed to last?
Make sure you are in agreement. For instance, if one of you wants to create a long-lasting firm while the other only wants to earn fast cash, planning will rapidly become a point of contention.
Inquire about the objectives of the prospective partner. Where do they envision the company in a year, five years, or ten years? What does “success” mean to them exactly?
No, there isn’t a correct response in this situation. Just make sure you have the same goals in mind. Although personalities and communication styles don’t have to be identical, your shared corporate objective is essential. There are none.
Style of Communication
Do you and your spouse prefer to conduct difficult talks in person or through email? Do they tend to voice their worries right away or do they prefer to silently observe?
It’s okay if you can’t find someone who communicates exactly like you. There is no right or wrong approach; nonetheless, you must make sure that your styles complement one another.
For instance, if you detest phone conversations, you should look for a companion who won’t call you frequently each day. Additionally, if you want to work for the majority of the day, you should look for a partner who won’t touch you on the shoulder or knock on your door “just to chat.”
Has your partner ever started a business? Did you? Just take a look at the Shark Tank investors and entrepreneurs to see that you don’t necessarily need to have the same degree of experience.
Good for you if you can locate a partner with company building and selling expertise who has established and sold many million-dollar companies. But unless you’ve come up with a spectacular, ground-breaking concept, a partner might choose someone of a comparable level.
Be upfront and honest about your experience while you look for possible companions. Both parties—not just you—must find the partnership to be a good match.
Your companion should enhance rather than duplicate your skill set. You don’t want a duplicate of yourself. You need a person who can bring something fresh and worthwhile to the table.
For instance, if you’re a developer, you might want to connect with a marketing expert or business strategist. On the other hand, you may be a marketing whiz who needs the assistance of a product manager or a designer to develop a product concept.
While it would be ideal if personal and professional matters remained distinct, this is just not the case. Make sure that you will get along well enough to spend hours, days, weeks, and even years together. You do need to get along (and preferably enjoy each other), even if you don’t have to be best friends.
Keep in mind that you’re not seeking a soul mate or a love relationship. You’re seeking a business associate. You want a confidant who understands your perspectives on risk, crisis management, and work-life balance.
When interviewing a prospective employee, there are stringent legal restrictions on what questions you may and cannot ask; but, when contemplating a cofounder, there are a few more latitudes. In order to learn more about your prospective mate, ask the difficult questions.
Will you equally divide the profits? Will someone be working harder and earning more equity as a result? Will you eventually provide your staff with stock options?
One of the main reasons for relationship separation might be money issues; deal with them as soon as they arise to avoid a permanent gap. Don’t put off having these discussions till later. Before you sign any document, be sure you both understand equity.
Characters in the Closet
Nobody is flawless. Everyone has shortcomings, but you two need to be conscious of this now to prevent later shocks.
You should be aware of the following things before beginning a formal financial connection with someone else:
- Has this guy ever been behind bars? What reason?
- Have they ever filed for bankruptcy before?
- Does the potential worker have a clean record?
- Does the applicant frequently switch jobs?
- What are the opinions of the person’s previous employers?
Instead of merely visualizing what you want in a business partner, write it. Check the boxes (figuratively speaking) while assessing possible mates to see whether there is a suitable fit.
By just perusing their CV or LinkedIn page, you won’t be able to evaluate your mate. You should speak with them. Prepare a list of inquiries that will enable you to elicit critical traits.
You don’t want your partnership to go the same way as that one Tinder encounter. Spend some time getting to know them. Instead of waiting, pose the difficult questions immediately.
HOW TO IDENTIFY A BUSINESS PARTNER
It’s time to start looking now that you are aware of what to look for. But where do I start?
Fortunately, it will be simpler than ever in 2023 to locate a business partner. You don’t have to have a crazily well-connected mother-in-law or attend every industry-related conference.
Here are some methods for finding a reliable business partner:
On Social Media
Declare that you’re seeking a business partner on Facebook and LinkedIn. Perhaps a friend from college or a former coworker might be interested.
Utilizing the strength of your network is another benefit of social networking. Even if you don’t know someone interested in working with you, someone in your network probably does. Give them a chance to seek for you since they could know the ideal individual.
Search for partners in areas that support startups. For instance, you may locate a suitable business partner in the comments section of a Foundr article or Instagram post.
Try formal networking websites like CoFoundersLab as well. CoFoundersLab is a networking platform for entrepreneurs that offers services including partner matching. You may locate cofounders and freelancers through Stealth and FoundersNation, two more international startup forums.
Search LinkedIn for pertinent groups. You could come across someone seeking a new job who might fit in well.
Employees and Coworkers
Have you ever managed or worked with someone who would be a good fit? Consider your favorite employees and the potential contributions they may make. There’s a strong possibility you may locate a competent and enthusiastic former coworker or even a present employee.
You may delve even further and get advice from a dependable coworker. They could be prepared to recommend you to a friend or business partner if they’ve enjoyed working with you in the past.
Think about former managers as well. The working relationship will already be clear to you; all that is left is for them to complete the other requirements.
It’s false to state that you shouldn’t combine your personal and professional lives. Just make sure you choose your friends for their potential, not because they were your high school friends. Friends may be excellent business partners.
Check-in with your high school and college buddies to see how their lives are doing. You could discover that your closest teammate from lacrosse is now a business owner as well. A fantastic resource for conducting some of this (completely okay but slightly stalkerish) research is LinkedIn.
Years of collaboration with a mentor may build up enough trust for them to accept you as a business partner. They might also mentor someone else that you would connect with. Inform your mentors of your thoughts in a conversation. This may present you with brand-new company options that you hadn’t previously explored.
Tell your mentor about any potential business partners you have. They could be able to assist you in seeing things you previously might not have seen (or want to notice).
Talk to your financial adviser and lawyer, if you have one, while you’re at it. They probably do business with other individuals who have similar interests, so they could be able to provide you with leads or at least spread the word.
FAQs about business partners
Should I give a potential business partner a trial period?
Trial periods can sound like legalese, but they prevent both you and your prospective business partner from getting into trouble. Trial runs can be as formal or casual as you choose. Typically, you should use a lawyer to establish a partnership agreement if significant amounts of investment cash are at stake. A business partner may have the option to terminate the agreement during the trial period and recover some of their financial investment or forgo any potential future profit sharing. If your firm is bootstrapped, you can reaccess your positions in the company during a prearranged touch base 60–90 days later.
What clauses ought to be included in my partnership agreement?
The structure of a partnership agreement will vary depending on the kind of firm. However, it is often advised to contain the following: corporate objectives, salary, job descriptions, equity stakes, ownership of the company’s brand, trademarks, real estate, equipment, etc., and exit plans.
How can I end my business partnership?
The phrase “it’s not you, it’s me” is equally useful in the workplace as it is in romantic situations. Ideally, you’ve planned ahead and included a trial term or departure strategy in your partnership agreement. It will still be a challenging talk, and the best course of action is always to be honest. A shared mentor or board of directors may be able to help you manage the partnership termination process. Just keep in mind that you should have more grounds than just “I don’t like them” for ending your relationship with your business partner. And perhaps you should leave the company instead of them.
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