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.
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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.
Grab the FREE 20 Questions to Ask Your Potential Business Partner Printable!
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.
Grab the FREE 20 Questions to Ask Your Potential Business Partner Printable!
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.
Grab the FREE 20 Questions to Ask Your Potential Business Partner Printable!
Bonus:
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?
These are great tips. I’ve always wondered about this believe it or not. Almost partnered with a friend for a biz idea. Bookmarking.
These are some great tips. I hope to need this in the near future!
Love this! Partnerships rarely end well. I love that you talked about an exit strategy because that is so important. Great post!
Honestly this is such a great post because so many people just go into business with someone without really thinking about the pros and cons of that person. My whole family is in business with each other in one way or another (we’re Italian, it’s what we do) and it aaaalways causes problems! Everyone should read these tips to choose someone who will actually build their business up with them, not just cause drama!
these are all good points to consider when you’re going into business!
Enjoyed reading every bit of it, coz recently we were planning to set up our business & were looking for partners to associate. The best we were working on measuring the strengths & weaknesses of both the ends.
Hi! What do you think of hiring a family member to be a VA. My little sister, who i’m not really close with could really use the money, is a hard worker and I need a VA. Thoughts?
Great tips for business success. I was going to pick one that is most important but they’re all important conversations that need to happen before going into business with someone.
Jessica, I would be really careful about that! If it’s your sister, it may be a bit easier to tell her how you feel about her performance, but keep in mind that we typically are lax when it comes to our family. After all, they will always love us, right? I would take the 20 questions printable and really go over it with her. Treat everything like a business – not like sisterhood. Perhaps hire her versus giving away equity in your company. Talk through it all – with her! Good luck!
Great tips! I choosing a business partner is a lot like choosing a roommate. Make sure they are not messy, they pay bills on time, and won’t eat all your food. In this case spend all the money :-/
These are great tips! I’ve begun building a team with my business and these tips will help me.
This is very sound and measured advice. Admitting your strengths and weaknesses is so important and I like how you instill the idea that if you are going to be successful you need to have some hard conversations both with your prospective business partner and yourself.
This is great advice. I think a lot of people impulsively go into business with someone without even considering any of the things you mentioned. Having a list like this in front of you makes it easier to think through things and make a better decision.
Great advice! I have been considering bringing someone in to help me and it would be as a partner…definitely going to pin this for later!!
I love how informative this is, amazing advice!
This is great advice, and I am taking notes, I am actually married to my business partner…. I know breaking all the rules. Somehow it actually works as we each have our strong suites.
Great tips! I found this really useful as I would like to set up an additional blog but with a partner. I think that it is an absolute minefield to be able to find someone that you could trust with the same aspirations and work ethics.
I think having clearly defined roles makes a world of difference! I also like to make sure we have a good blend or balance of skills!
Pinning this because people need to read this! Great information!! Thank you for posting!!
Yes! These are all important things to know ahead of time before entering into a business partnership with someone. That way if things ever get awkward, you have plans already in place.
When its all about money everything should be clear. Its true, when it comes to business you have to set aside relationship because business is business that’s why its very important to be transparent with all your concerns and every details of any deal you’re going to make with your partner.