Hi, and welcome to another ‘1st of the month’ blog post!
When Steve and I started working together years ago, both of our businesses took a giant leap forwards. It was a classic example of synergy at it’s very best… as a team, we were MUCH more effective than as two individuals.
Synergy is what you should strive for when considering a business partner, and to help you grapple with finding a business partner, this month we’ll share some of our experience, including potential pitfalls, and things to watch out for….
Read on and we’ll show you our secret source to finding the perfect business partner!
Here’s what we’ll cover in this blog post:
- Why Should You Consider Having A Business Partner?
- What Are The Disadvantages To Having A Business Partner?
- Is Having A Business Partner Worth The Risk?
- The 4 Step Process To Finding The Perfect Business Partner
- Where Do I Find Potential Business Partners?
- Should You Have Family And Friends As Business Partners?
- The Key To Evaluating Candidates
- Looking For Complimentary Skills
- Interaction & Execution Skills To Consider
- What About Experience?
- Why Trial Runs Are Important
- Why It’s Crucial To Legally Document Your Partnership
- Our Top Tips For Choosing A Lawyer
- Workflow – The Critical Element Of How To Work Together
- How To Do It…
- Our Top 5 “Do’s” To Finding The Perfect Business Partner
- Our Top 5 “Don’ts” To Finding The Perfect Business Partner
- Our Final Thoughts
Finding a good business partner can be a game changer.
When I started out online, I did NOT want a business partner.
The idea of giving up half my business to someone else, having to answer to someone else, and just needing to be responsible for my actions, was NOT very appealing… but getting a business partner was undoubtedly the best thing I have EVER done for my business.
Even if you may want to create a business on your own, the reality is that you will not be able to handle all tasks without any extra help. This is where it can be a really good idea to work with a dedicated business partner that is ready to offer you all the help and guidance you may need, and someone to be accountable to.
Why Should You Consider Having A Business Partner?
There are a few reasons:
- To REALLY “win” you always need more than just you
- To REALLY expand and scale you always need more than just you
- Getting GOOD help will ALWAYS make a better product
- Getting GOOD help will always drive more success
- You can just do more with GOOD help – full stop!
Without having a partner, stress is a big deal, you’ve got no-one to bounce ideas off, you’ve got no-one to share bad news with, or good news for that matter! It’s a big deal, and it’s nice to know someone’s in your corner, providing of course you find the right partner.
Thanks to my business partners, I can take off on a month long vacation and come back knowing everything will be in order… this would have been unthinkable prior to different partners in different parts of my business.
TIP: To expand and scale you HAVE to get GOOD help!
What Are The Disadvantages To Having A Business Partner?
It’s important to know what the disadvantages are to having a business partner, knowing what they are upfront can save a lot of headaches later on if things go wrong.
Let’s look at the disadvantages in more detail:
- IT can go horribly, catastrophically, nuclear bomb like wrong in an instant if you get the wrong partner (this has happened to me on more than one occasion… it ain’t pretty)
- Unless you’ve legally documented everything exactly (which you won’t) dissolving the relationship can be awful
- Bad partner picking can HURT your business overall
- In extreme cases it can destroy your business and/or your financial health
TIP: Be scared and cautious when looking for a business partner, but do it anyway!
Is Having A Business Partner Worth The Risk?
Absolutely yes, although we’ve seen the disadvantages, the rewards far outweigh the risks here; remember in business almost all decisions you make will come with a potential upside and a potential downside.
Mitigate as much as you can by:
- Being smart when picking a partner
- Being smart when organizing your work/company
- Being smart about the legal aspects of the partnership
TIP: Just get over it and jump in – for some this is easy, for others it’s paralyzing
The 4 Step Process To Finding The Perfect Business Partner
Now we know that to grow and scale your business, a business partner can be a huge help, how do you go about doing finding one? Here’s a basic 4 step process to help you get started:
- Find candidates (liken it to dating!)
- Evaluate candidates
- Legal set up – extremely important
- Organize workflow
Where Do I Find Potential Business Partners?
As we’ve discussed, one or more business partners can help you grow your business. You just have to know how to look for them, here are a few suggestions:
- Mastermind groups
- Facebook groups
- Business relationships – people that you work with
- Past careers or jobs
- Childhood friends
- Family and friends (maybe – see below)
Should You Have Family & Friends As Business Partners?
This is a good question and one of the most common that I’m asked…
People believe that friends should not be business partners, this may end up destroying relationships. But as you can imagine, that is not always the case.
If you know what you’re getting into and how to keep your friendship away from business, things will normally be fine.
What I always advise people of is to ensure the expectations are clear and documented up front. That way if things go haywire, at least you know you’ve attempted to do things as well as you can and you’ll be legally protected for your share of the business (provided you have a contract spelling out the details).
The Key To Evaluating Candidates
When evaluating candidates, you have to try and figure out if you’re compatible, at this point you need to understand yourself.
What we mean by this is ask yourself the following questions;
- What are your strengths & weaknesses? What are you good at? What are you not good at?
Your partner also needs to do the same thing, and have some comfort in being able to share those things.
Bear in mind, in order for two people to work together, they need to have some ideas in common. Be it a business idea, the way their employees should work, if they can generate cash flow or not, all of these things are extremely important, and they can help you a lot. So yes, you do need to find a business partner that has similar goals to yours. After all, it will be easier to work with a business partner if you want to take things to the next level and move towards the right direction.
Let’s summarize these below:
- Assessment is key, you must know the starting point
- Skills that compliment NOT duplicate
- Work style need not be the same but can’t clash
- ALL have strengths
- ALL have weaknesses
- ALL have good personality traits
- ALL have negative personality traits
TIP: You don’t want another YOU – this is the biggest key!
Looking For Complimentary Skills
As we’ve mentioned above, we recommend you to find people that have skills complementary to yours. This will make it a lot easier for you to handle certain types of tasks, while others will be handled by your partner. Try to stay focused on what you do best, and find a business partner that can handle other things within your own company.
When you put your skill sets together and how you work, skills that complement each other is what you’re looking for, you don’t want another you. This is a really hard task for entrepreneurs!
Due to them wanting to do their own thing, they have strong opinions, and want to make both decisions, this could be problematic, so don’t ever hire an entrepreneur.
Remember, everyone has positive and negative personality traits.
Interaction & Execution Skills To Consider
There are four main areas to consider:
- Introvert vs extrovert
- Leader vs follower
Which one are you – extrovert or introvert? It’s important that you’re not both introverts, in many cases this doesn’t work well from a business prospective (although it can), two extroverts would often work great together however.
Are you a leader or a follower? You can both be leaders, but not both followers, although bear in mind you need to know when to step back if you are both leaders.
Here’s our evaluation:
- You MUST have a way to self-assess for these 4 areas
- You MUST have a way to ensure potential partner self-assesses
- You MUST be truthful, honest and open
- You MUST know how to stack the skills up and look for overlap and complimentary indicators
What About Experience?
Avoiding complete business newbies is helpful…
The right business partner will be one that has experience and which is mostly going to work hard to achieve all those goals naturally. The idea is to know who you are going to work with, how experienced they are, and what type of success did they have in the past.
Why Trial Runs Are Important
Why is a trial run important? Because a trial run will help you see if you and the potential business partner click or not.
Not always possible, but if you can, spend some time working together in the business before you both commit to the partnership.
This will make it easy for you to understand that you have the right options or not. Yes, there can be some tricky situations at times, but with a trial run, you will see if that business partner can indeed handle all types of tasks or not.
Is The Commitment Equal Or Not?
There are lots of people that want to focus on an equal commitment, but not all business partners will offer such a thing. There are situations where some business partners will let you do all the heavy lifting. That’s where a trial run is a very good idea. This way you can identify the unreliable business partners and get rid of them pretty fast.
So now you’ve found your new business partner, you’ve carried out the assessment and all looks good to go, but what next?
Why It’s Crucial To Legally Document Your Partnership
Due to the nature of partnerships, every detail and obligation must be clearly defined and written out, and agreed upon by all parties.
Many partnerships are cemented with a handshake, but this can be a recipe for disaster. It’s crucial to have it documented, not only what is expected of each partner, but the consequences of such if expectations aren’t met.
ALL your time will be defining the bad stuff which can be demoralizing when participating in this process, but it’s absolutely critical that you do.
Let’s look at the “What ifs” that you need to consider:
- What if someone dies?
- What if someone gets divorced?
- What if you want to dissolve the partnership?
- What if someone’s not pulling their weight?
- What if someone does something really bad?
- And so it continues…
TIP: There is only one solution, you’ve got to do it, so just grin and bear it!
Our Top Tips For Choosing A Lawyer
Here are out top tips for deciding on a lawyer:
- Get one that you both like
- Get them to give you a sample/someone else’s partnership agreement
- Go through all the “what ifs”
- Spell out in ENGLISH and common sense what you think should happen / want
- Let the lawyer translate that
- Sign it and never look at it again – hopefully 🙂
Workflow – The Critical Element Of How To Work Together
So you need to figure out how you’re going to work together and both agree that makes sense, here is whatSteve and I do as an example:
- Big planning session twice per year, in person if possible
- And a budget!
- Meet weekly to determine progress (or however often makes sense for you)
- Look at monthly financial results
- Change the plan as needed, always with a new forecasted budget
- Plan out 30 days – you do this, I do that, etc.
How To Do It…
So you’ve determined your workflow, but how are you going to do it?
- Via skype
- Google docs
- Basecamp (optional)
- You MUST manage expectations of each other
- Talk in those terms – be relentless with it
- Document it – use the “leader”
Our Top 5 “Do’s” To Finding The Perfect Business Partner
- Evaluate potential partners carefully
- Look for complimentary skills
- Have a trial run
- Legally document your partnership
- Have an organized workflow of how you’re going to work together
Our Top 5 “Don’ts” To Finding The Perfect Business Partner
- Avoid two introverts working together (generally speaking, there are exceptions!)
- Avoid two “followers” working together
- Avoid people that don’t have a lot of business experience
- Avoid people that don’t have the same goals and direction
- Avoid people that only want to operate on a “handshake” basis
Our Final Thoughts
Working with a business partner can drastically change the dynamics of running a business. A great business partner can add a lot of value, and help scale and grow your business at an exponential rate.
By following our advice, you will be able to adopt the right process for finding your next business partner. Take your time, adopt all of this to your advantage, to make sure you find a business partner who really fits with you, your business ideas and your goals, and the outcome can be very rewarding!
Do you have a business partner?
What advice would you give someone considering moving forward with a partner? Leave a comment! THANKS!