Nobody likes a leech of a business partner. Yet, all the time, we hear about stories of business partners who suck at pulling their weight or contributing in a substantial way to the business. As you follow through on your business dream, you might be thinking about the advantages and disadvantages of bringing in a business partner. After all, it feels safer to walk down a dark tunnel when you’re not alone, right?
Brenda’s Bakery is fast becoming a reality. And now, Brenda’s seriously considering how to bring in some help to assist with some of her business operations. She spends so much time baking that she feels she just doesn’t have the time to commit to marketing, deliveries, invoicing, and perhaps not enough capital to really scale. Her sister has been especially helpful to her in the past, jumping in to help when she can, and they’re her recipes, too, in a way. And she has a close friend who’s offered to help by creating the website and implementing marketing strategies. So, should Brenda explore partnering with them? She can’t afford to hire someone, and a partnership of some kind seems like the most logical step forward, right?
Before Bringing in a Business Partner, Consider These Things
Much like when you analyze your why for yourself, you need to consider the why behind bringing in a partner. Brenda’s in a position where it seems logical to invite her sister and/or friend into her business. But until she understands why either candidate wants to be in business with her, she would be taking a big risk. Here are some key traits to consider in a potential new partner.
- Aligning With Your Why: Every team member that comes on board needs to believe in your vision, get behind your just cause and possess the passion and inspiration needed to scale the company. This is an incredibly essential consideration when it comes to picking partners.
- Creativity: Most experts suggest aligning business efforts with someone who shares your passion but brings a unique creativity to the table.
- Experience: Before considering a partner, check the resume and see what type of real-world working experience he or she can bring of value to your business.
- Skills: Partnering with someone who possesses certifications or niche skills that are separate from yours will complement your efforts.
- Reliability: A partner is only going to be good if he or she manages to show up to work on time. Reliability is a trait no one can be taught, so make sure whomever you consider knows the meaning. As the saying goes, “You never have to ask the committed if they’re going to show up… you have to tell them to take a break ….”
- Integrity: How someone behaves when no one is looking will tell you everything you know about a person. Integrity is also an inherent characteristic that is imperative in every aspect of your business.
Yes, ownership percentages and expectations associated with splitting revenue and expenses should also be discussed with a new business partner. But don’t dwell on these metrics right now. Keep control of your business when you’re starting out, and focus on the growth of the business. One day, when you’re raking in $10 million in annual revenue, there will be plenty of dough to share with partners and everyone else on the team.
Should You Partner with Family & Friends?
When it comes to checking off the essential boxes of trustworthy business partners, family members and friends can often hit them all. You know them well, and in most cases, you get along well. But how many times have you heard the old adages, “never go into business with family” or “businesses ruin friendships?” Those sayings have merit for a reason. But on the flip side of this view, there are literally thousands of business success stories out there that began with two friends, two brothers, or two sisters with a dream.
The experts may suggest running away from friends and family. But you’ll find plenty of other industry professionals who say it’s a great idea. Voila Ng, co-founder and marketing for Pointshogger, shared in an interview that she finds incredible value in partnering with friends. She recommends, too, that you choose a pal that isn’t necessarily your BFF, with all the same interests and experiences. In Brenda’s scenario, her friend could be a great partner with expertise in marketing and advertising, while Brenda focused on kitchen operations and baking. Each would have their own niche within the business, working together for growth.
From the family member perspective, the same logic applies. A family relationship that is already rocky will translate to a business partnership disaster. But if you have someone in mind with whom you can work every day and not lose your marbles, it might be a great fit. Remember to apply the same strict standards of consideration, though, even with your family.
Look for those key traits before having a conversation. The last thing you want to see transpire is a meltdown that results in a ruined family relationship or a failing business. Watch a few episodes of Bar Rescue or Kitchen Nightmares. You’ll see classic examples of families running businesses the wrong way and ruining relationships as a result. Yes, we know a lot are staged and over-exaggerated to some extent for entertainment purposes, but the lessons learned are still there.
Choosing a Business Partner Who Can Ride the Waves with You
When business is good, everyone’s happy. The money is rolling in, the clients are happy, and everyone involved with the operations is getting along swimmingly. But that’s not the only reality in business. Things will get rocky, and times will get tough. When choosing a business partner, you’ll want to find someone who can ride those waves with you.
Proactive Conflict Management
Healthy competition in business is a good thing. But being fiercely competitive with someone who also happens to be your business partner can lead to terrible conflict management strategies. Think proactively about what ground rules you want to establish for handling conflict. And work with a business partner who values the pillars of a great strategy: compromise, collaboration, and accommodation. Don’t forget the infinite mindset. The goal is to stay ahead of your competitors, not beat them and remain in the game for as long as possible. All executive-level partners need to always remember this.
Managing Expectations
Don’t necessarily pigeonhole yourself into finding a business partner who can only offer a financial investment. Of course, it can be groundbreaking in these early phases to have a partner infuse your efforts with significant funds. But you’re not chasing the dollar here. If you build a successful business, the revenue will come. So, as you focus on your success strategy, keep your eye out for the business partner who can enhance your game, not necessarily the buck.
When working together with a business partner, the primary objective is to develop a winning strategy for growth and success. But it’s also important to have a conversation about how things might go if a separation or exit strategy is needed. Decide now, before things get tumultuous, how you both agree to handle stepping out of the business, should it become necessary. Avoid making critical decisions in the heat of the moment. Make those decisions now, so expectations are clear for both business partners from the jump.
Where to Find Reliable Business Partners
You might be interested in a business partner but don’t have a friend or family member in mind to fill the role. There are other places to find savvy business professionals who share your values and even industry passion.
Ryan realizes that the construction business he’s starting is pretty hard to run as a one-man show. He manages the physical demands of the job but also juggles new client bids, bookkeeping and hasn’t even thought about marketing yet. He starts thinking he could really use a business partner. But no one in his immediate circle of friends and family has a fucking clue or an interest in construction. Then, he gets a LinkedIn message from one of his former co-workers, Paul, asking what he’s doing these days. And Ryan has a lightbulb moment. Paul is a finance guy, who in their past, shared a working environment and was responsible for accounting and payroll responsibilities. Ryan responds to Paul’s message and tells him about his new general contracting business. As it turns out, Paul’s looking for new job opportunities and contemplating entrepreneurship. Could Paul and Ryan make a great team?
Co-Workers & Colleagues
Before starting your new business, you probably worked for someone else. And co-workers make some of the best business partners. You already know how you work together, having a history of daily interaction, problem-solving, and team projects. Consider connecting with some of your past colleagues. You never know. They could be hungry for a new opportunity. Like Ryan, you might stumble into a few conversations that lead to a beautiful partnership.
Networking & Referrals
Depending on the industry you’ve chosen to explore, you’ll likely be rubbing elbows with new faces within your segment. We’ll talk about network marketing strategies in an upcoming conversation if you’re not quite ready for that yet. Perhaps, in these initial phases of a business startup, you’re talking to the local Chamber of Commerce about membership or signing up for an online training course. Or, it could be that your current clients are sending referrals and making new introductions.
The point is that you should keep your eyes open at all times since anyone you encounter in these circles is already likely passionate and knowledgeable about your industry. And you could identify someone who shares your why and vision. There are also plenty of online portals to find angel investors or other like-minded people who could potentially serve as a great business partner.
It’s important to recognize the distinctions between a business partner and partnering with someone as a vendor for your business. For example, if Brenda wants to hire her friend to build a website, that relationship would be a business vendor partnership. Alternatively, if Brenda decides she can’t afford to pay her friend and instead wants to share the business (structure, profits, losses, risks, etc.) with her friend, now that’s a business partnership. In your business, you might be able to bring in help from the outside for specific tasks instead of engaging in an actual business partnership. That’s a conversation we’ll explore next.
There is often a lot of anti-partnership talk on various forums, groups, and boards, and it mainly comes from people who have severe trust issues and/or were fucked over in the past. While we understand these are reasons to keep your shields up, we genuinely believe that in today’s world, it’s better to have a partner(s.) Creating a core team where each person has skin in the game is more likely to drive connectedness, productivity and boost company growth exponentially and more than trying to keep it all for yourself. Don’t worry about percentages, especially if this is your first venture. Just make sure you keep control, and you pick the right people. The best way to benchmark this standard is by making sure they align with your why.
Well, that’s all for this article, folks, and we hope it has been insightful and helpful. If you need more specific advice during these early stages of your business, let us help. Schedule a FREE consultation here! We’ll continue to follow Ryan and Brenda’s stories and offer the most transparent and most real advice you need for the next stages of getting your company started on the right path to success.
