Perhaps one of the most crucial hires that you will ever make is the hiring of a business partner. With many entrepreneurs working 50-60 hours a week, you’ll be spending a big part of your waking life alongside your partner, which means you’d better be able to get on well in close quarters. You also have the added spice that if things go wrong between you and your business partner, you don’t just lose some skill – you potentially lose half your livelihood, are forced to sell the whole thing, or have to nearly bankrupt yourself buying your partner out.
In other words: It’s bad news.
Given these risks, why do it? Why find yourself a business partner? Because the benefits of a business partner are irresistible:
- You can forge a great alliance that allows you to expand your business at a rate much faster than you could if you went it alone.
- You’ll be able to pool ideas, leverage each other’s strengths, and compensate for each other’s weaknesses, allowing you to create a bigger and better business.
- You’ll be able to share the administrative burden and cover for each other when one of you is sick or away on vacation, meaning you can achieve a better work-life balance than you would have had as an entrepreneur otherwise.
To experience the benefits of having a business partner, you’ll need to choose your partner wisely: Such partnerships are precarious, with 65 percent of startups failing due to conflict among the founders.
With that in mind, here are some tips on how to form a business partnership that will stand the test of time:
1. Choose Someone You’ve Successfully Worked With Before
There are potential business partners all around you: your family members, your spouse, your friends, your current or former colleagues, and even your clients and suppliers.
But a good partnership requires more than simple familiarity: You need to know that you and your potential partner work well together through all the ups and downs.
When considering a business partner, think about the people in your personal and professional networks, and ask yourself: Have we previously collaborated? How did it go?
Chances are that past events may repeat themselves. If history shows you worked well with someone despite any and all obstacles, this person could be the right long-term business partner for you. If your past projects were disastrous, it’s probably best to stay well clear and enjoy your relationship as it stands.
2. Choose Someone You Have Successfully Struggled With
One of the best ways to expose potential cracks in a future partnership is to put the two people in a high-pressure situation, such as traveling together in cramped quarters. Underlying tensions, grievances, and differences often rise to the surface in these scenarios – sometimes with explosive results.
If you can think of high-pressure situations that ended badly with your potential business partner, then they might not be the best option for you. On the other hand, if you were able to negotiate and collaborate effectively during these high-pressure scenarios, then that person could be a good business partner.
3. Choose Someone Who Shares Your Values
Could you imagine a restaurant cofounded and run by an ardent vegetarian and an uncompromising carnivore? Even with the best conflict management and negotiation skills in the world, this partnership would most likely go down in flames.
Of course, this is a highly unlikely example, but it is meant to illustrate the point that, if your values differ significantly from your partner’s, you may be headed for trouble.
Choose a partner with whom you share similar values in key areas, such as work ethic, social responsibility, ethics, work culture, business strategies, and so on. That way, you’ll have a far more harmonious long-term relationship with your partner.
4. Pick Someone With a Complementary Skill Set
According to small business guru Michael Gerber, successful entrepreneurs combine in themselves three qualities: creativity, management skills, and technical knowledge.
Most people, however, only have one – maybe two – of these skills. When looking for a business partner, then, you should look for someone who has the skill or skills you don’t have yourself.
For example, are you a highly creative tech whiz? If so, you want a business partner who can ground you and prevent you from blasting off into “mad scientist” territory. You want a partner who has strong management and administrative skills.
Contrary to conventional wisdom, choosing a business partner means more than just picking someone with whom you get on well down at the sports bar. It’s about choosing someone with whom you will be genuinely compatible in a close business relationship.
Choosing a business partner is one of the most important business decisions you’ll ever make. The right partner could make your future, but the wrong one could break it. So, don’t rush into a business partnership. Take your time, do the math, and you should be able to find the right long-term business partner for you.