A few weeks back, I was discussing the success of the partnership model of business with an entrepreneur friend, and he said something that will remain with me forever.
Quoting him, "Have you ever thought that business partnerships are much alike as marriages? In both, there is an emotional and financial investment. Also, the relationships that occur are life-changing and last, but not at least, money is involved".
He was spot on with his assessment. When I started my entrepreneurial journey, I was in two minds: "Whether to have a business partner or not."
In the end, I went ahead and found a business partner, and you can call me "the lucky one" because both my business partnership and marriage have successfully survived 10+ years :).
Deloitte recently released a "Business Partnership in Action" - a case study in the Financial Services Industry. Here are the key takeaways from the study:
For a partnership to be successful, it needs to:
• Have articulate desired outcomes
• define the level of commitment all partners must have
• Encourage Transparency and collaboration, which will underpin the success of the relationship
• Promote Open and effective communication
The above principles form the backbone of this article.
Here are five things that are important to be considered when choosing the right business partner.
1. Goals and vision in common
Similarly, as in a marriage, you and your partner must share the same vision of the business and have a common goal. If this is not the case, even if both of you bring different skill sets to the table, you will not go far.
Whoever you decide to partner with must believe in what you are creating as a team and, better yet, improve it.
Furthermore, all the partners must respect each other as a person and a professional. Mutual respect leads to the belief all the partners need to have - to make the business successful.
As George Shinn said, "There is no such thing as a self-made man. You will reach your goals only with the help of others."
Equally important is the ability to have open and effective communication between partners to set goals and make decisions.
If there is a communication breakdown, the business will slowly and gradually move towards failure.
2. Find someone who can complement your skills
Throughout our professional careers, we meet people who stand out in certain aspects more than in others.
We all have our strengths and weakness.
Keeping the above in mind, the person we choose to start a business with must provide us with skills that complement our weaknesses.
This way, the partners form an association to cover for each other's weaknesses with their strengths.
For example, if you are good with numbers, you should be in charge of the financial department.
On the contrary, if your partner stands out in public relations, let them handle all networking.
"Individual commitment to a group effort - that is what makes teamwork, a company work, a society work, a civilization work." – Vince Lombardi
Lastly, choose a partner that is willing to work as hard as you do. As a team, you have to motivate each other.
3. Choose a partner you can trust
Trust is the essential trait of a business partnership association.
If there is any doubt in your mind about your possible partner's business ethics, you should back out immediately.
It is essential to realize that this person is going to be a considerable part of your daily life.
Again, as in a marriage, trust is the foundation of a successful relationship.
Ask yourself key questions that can determine how this person may behave in certain situations.
It would be best if you always ask in your mind:
- Can I trust them with critical business decisions regarding critical stakeholders?
- Can I trust them to be sympathetic when you or the team make a huge mistake?
- Are they reasonable when handling cultural, religious, or political differences?
The answer to the above questions indicates the level of confidence you have in your "business partner."
4. Experience an outstanding business networking
Nowhere in the world can you trade experience. It is gained over the years by learning, failing, and succeeding.
Along with experience comes networking. A critical skill that, again, cannot be acquired overnight.
And looking at how businesses have evolved - nowadays, networking is a powerful tool that helps expand professional circles, reach new clients, acquire up-to-date knowledge, and in time, grow your business and increase profits.
For this reason, the business partner that you choose must stand out in being a people person. Specifically, they must know how to manage and work with people around them since networking is all about public relations.
Someone who is well connected, for sure, will increase the possibilities of rapid business growth.
5. Discuss the financial arrangement
Startups have a 90% failure rate. It means you start from day one with odds heavily stacked against you.
All said and done about passion, trust, integrity, the fuel that keeps a business running is money.
From day one, how will the business be funded, the salaries picked up by each partner, who ad how much will contribute to the company should be laid out.
Most businesses fail because of "money-related issues." You do not want to get a partner and fail because you disagree to agree on financial matters.
To achieve success, a critical decision needs to be made - with who you are going into business. After all, this partnership is the foundation that will lead to the company's success or failure.