Getting a business partner as an entrepreneur is a massive commitment. Whoever you have at your side will, ideally, stick with you until the current venture ends. They are part of your core team and will play a huge part in the startup’s growth and success. That kind of commitment cannot be taken likely. Here are 5 questions and considerations to make before partnering up:
1. How is the Potential Partner Doing Financially?
One of the most important questions you will have to answer is regarding your potential partner’s financial status, and why they got to that point. When partnering up, you are not just partnering with someone’s skills. You are getting a lot of personal details in the deal, from loans to investment. Whether the nature of those details is personal or professional, they should and will have an impact on whether or not you choose them.
A wealthy partner does not necessarily mean fiscal responsibility, as that wealth may be inherited or come by them through luck. On the flip side, a financially troubled partner is not necessarily a bad deal, especially if their position came about from an accident.
2. How Are They Under Pressure?
Being in a start-up is an inherently stressful endeavor, even as a boss. Uncertainty is the only constant. What works one day may need to be overhauled in the next. Good ideas may turn out to be bad ones, costing the small business a chunk of its already limited capital. If they cannot handle the pressure, they may not be fit to be your partner.
Figuring out whether or not your potential partner can handle the pressure can be difficult. Most of the time, you just need to ask them and to cite examples. If you trust them, you will believe them. If you do not trust them, then you have an even bigger reason to not let them to stay at your side.
3. Are They Willing to Sign a Contract?
You may be friends with your business partners, but never forget the first word: “business”. What you do together for the small business is a professional endeavor and must be treated as such. Just because you get along does not mean you can leave agreements to a handshake. Contracts and agreements must be written down and agreed upon, with consequences for breaking them.
Anyone unwilling to sign a contract under any circumstances is not a good fit for a professional setting. There will be negotiations, especially when it comes to compensation, ownership, and responsibilities, but those are natural. If who you are speaking with is a good match, you will find common ground.
4. What Do They Expect from the Partnership?
Expectations are everything. One of the worst mistakes you can make as an entrepreneur is to get into a partnership where you both have different expectations of each other. That would be a tremendous waste of time, and depending on your contracts, potentially legally troubling.
Fortunately, solving that problem is simple. Talk to your partner. Ask them what they think they will end up doing on the start-up, as well as what they want to achieve. Get them to tell you why they decided to throw their hat into the ring. Figure out if what they expect from the endeavour matches what you need from a partner.
5. How Much Do You Need a Partner?
Much of what you do as an entrepreneur comes down to “need” versus “want”. You may want a fancy office, but ultimately, you just need a workspace. Before you head out and start fishing around for a partner, you need to figure out if having a partner is what you really need. That is a question no one can answer from you. You need to dig deep and really figure out if you want a partner for the right reasons.
What those right reasons are can vary. Many entrepreneurs need a partner to shore up deficiencies in their skill set. Others simply do not have the time or the energy to manage the size of their start-up. If adding a partner will definitively and measurably improve the start-up’s functions, then you need one.
Getting a partner is not easy and can be one of the most stressful parts of being an entrepreneur. However, the value you can get from getting the right person at your side is immeasurable. Not only will they help improve the small business, but they can also help alleviate the loneliness common among entrepreneurs. Put in the effort. What you can get is worth the sweat.
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Author Of this post: Gerald Hunt