How to Choose A Business Partner

The following article is an excerpt from our September 2018 newsletter:

When you are contemplating going into business with someone, either in the form of a joint venture, partnership or as co-owners of a business, there is no way to guarantee that it will work. However, there are some things you can do to try and prevent any problems down the line.

Here is a list of some of those things to look at when deciding:

  • Take your time – Rather delay the start-up of the venture until are ready
  • Don’t duplicate yourself – Your potential partner should have skills, strengths, and personality traits that compliment yours. Yes, definitely you should have a shared vision and values, however in terms of work flow, you might be a “creator” or a “star” (creative, people orientated, sales) and it would not be beneficial to have another “creator” or “star” on board. A mechanic (designing systems) or support person (strong in detail or administration), or even a trader (seeing opportunity) would better compliment the star or creator’s style
  • Be objective – Try to make your decision without any emotional ties or friendship. Have a set of criteria that you are looking for and objectively judge how that potential partner meets those criteria. Evaluate based on skills and personality, not emotional ties
  • He or she must be just as enthusiastic and driven as you are
  • Do background checks – References, criminal checks, past work experience
  • Assign roles and responsibilities and stick to them – Put these into a written agreement. Develop a clearly defined set of functions for each partner- each stick to what each one’s strengths are
  • Protect yourself legally – While trust and integrity are important, as is that “golden” handshake, it is still essential to put everything in writing. The agreement will cover issues you never even considered – that may become vital at a later stage. Set up a buy and sell agreement, backed up by life insurance

Equal input or contribution – Make sure your prospective partner has the means and resources to contribute equally to the business – either financially, in terms of sweat equity, or skills

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