Thinking about taking on a business partner? While it is certainly appealing to essentially double yourself, there are quite a few things to consider when looking to bring a business partner into your business. After all, a business partner can be more than you bargained for if you aren’t diligent in your selection.
I took a business partner with my first website and blog, after I had established the blog and began creating the content. I didn’t think much about it – it was my idea, my branding, my content, but I wanted to be polite. I was green. They were family (well, sort of – it was my husband’s cousin). I made some stupid concessions and stupid mistakes that I don’t want to see you make.
Tips for Choosing a Business Partner
Know Your Strengths (and Theirs)
Ultimately, knowing yourself is more powerful than any advice I can provide. What are you good at? Are you willing to be a self starter – talk to brands, customers and sell your brand? You may be a genius at creating products. Are you good with web design and SEO? Numbers and figures may be your thing. Whatever your strengths may be, know them! And, after you know those strengths, make sure you know your potential business partner’s strengths as well! You don’t want to both be strong in an area that may cause conflict and competition as to whom can complete a task better.
Know Your Weaknesses (and Theirs)
Let’s face it – we don’t like to talk about our weaknesses. It’s time to get real though. You have to know your weaknesses to know what areas a business partner could help. Do you prefer to answer emails and instant messages over picking up the phone to cold call customers or brands? Perhaps you couldn’t balance a checkbook to save your life. Maybe you create killer products and content but you just can’t seem to deliver it in a design-friendly sort of way. Find out what your potential business partner’s weaknesses are. Can you both compensate for each other’s weaknesses?
Take Friendship and Family Relationships Out – This is Business
Whoa! This is a big one. We love our friends and family, right? It sounds like a dream to get to work with your bestie… but, it can easily ruin a friendship! You will have arguments. You will disagree on business practices, money, branding and anything that is involved with your business. Make sure that before you enter into a business relationship with either friends or family, that both of you (and yes, I mean both) can separate business from pleasure. Making hard decisions for your business will ruin a relationship if it’s not a solid relationship.
Set Clearly Defined Roles (before you ink any deals)
A business partnership is supposed to be that – a partnership. However, often it ends up being one-sided. You may spend 30 hours a week working on something for your business while your partner (that you now gave 50/50 rights to your company to, out of politeness) is squeaking by with 10 hours of work because you are “better at it than them.” Sit down with your potential business partner, identify your strengths and weaknesses and hypothetically sketch out what tasks and duties would be given to each person each week or month. Establish these before you give up any of your company to a business partner.
Talk about Money
Eeewww! Money ruins relationships. Business. Marriages. Friendships. They say that ‘money is the root of all evil,’ and in terms of relationships, they may be right! You need to approach the subject with the understanding that both of you are in this to make money. However, you may have differing opinions on the most effective ways to actually make the money. For example, I believe that you have to spend money to make money, but not a ton of it. I’m a bargain shopper and want to make sure that what I am spending on gives value to the business. However, if you are in a business partnership where your partner doesn’t want to spend any money or wants to spend money on anything and everything that looks like a good deal, it will get tricky. Having a clear understanding from the start on how financials for your business will be handled is of ultimate importance.
Talk about Exit Strategies
Hmm… should I really talk about this?! YES! YES! and YES! What happens if a business partner wants out? What if they are forced to give up their portion of your business. Financial reason, health reasons and even poor relationships can cause you or your partner to exit. Having an understanding of what an exit strategy looks can save you headache and heartache in the future.
Don’t give away the farm – especially if you created the business. A 50/50 relationship sounds like the fair thing to do, especially if you are friends with the person, but don’t do it! If it is an idea that both of you work on from the start, a 50/50 split may make sense; however, if you want to retain rights to something that you created, a lesser split may make more sense. Think 55/45 or even a 60/40.
Have you ever had a business partner? What is one lesson that you learned that you would share?