5 must-ask questions before finalising a business partner
Can we get along?
Regardless of how smoothly your business is functioning right now, there is no question there will be difficult times in the future. If you aren’t comfortable having tough conversations or making difficult decisions with your prospective partner, this partnership may not be for you. Partners should be able to talk, text or email almost daily and be fearless to go down each other’s throats as things come to completion.
Are we on the same page?
Just as there are many kinds of partnerships, there are also many different kinds of end goals. It goes without saying, but it is essential that you and your partner should be on the same page. You don’t want to be fully immersed in the process only to discover you have different visions for the company. It is not a good idea to discuss a deal at a networking event and dive right in. You need to sit down and talk about every aspect of what you are getting into. If you are not comfortable with things, now is the time to make amends or consider backing out.
What are our roles?
In every successful partnership, there are earmarked roles and tasks. When both parties accept these roles is when you find great success. On the flip side, when both parties want to control everything is when the business gets into trouble-waters. In every business, there are a dozen of these decisions that must be made and done so in a timely manner. Time is money and the longer you wait, the longer the process. If each partner knows and accepts their roles the partnership will be smooth.
What value does a partnership add?
On the surface, a partnership may seem like an excellent way to increase business. However, in reality, unless a partner adds value, there is little sense in working together. Each partner must have a skill set or a pool of resources that complements the other where he/she is deficient. For instance, if both of you have access to capital, you will just get in each other’s way. Here is where identifying your strengths and weakness is essential. Apprehending specifically where a partner will help, allows you to decide if a partnership really makes sense.
How are we dividing profits?
As difficult as this may be to talk about, it is a prerequisite conversation for any partnership. Both parties need to be 100% in agreement with what their remuneration will be based on the amount of capital each partner provides mixed with the amount of work that is done. There may be a little back and forth negotiating, but you can’t proceed unless you are both satisfied with the resolution. If not, there will be animosity the entire project that can cause the bottom line to be impacted.