8 Things to Keep in Mind Before Partnering Up
Updated: Aug 31, 2020
A business partnership can take your business to the next level or it can also sink it down to the bottom of the ocean. The business partner has a very big role in the success or failure of any of the businesses.
Technically, a business partnership is a specific kind of legal relationship formed by the agreement between two or more individuals to carry on a business as co-owners, but it is much more than that. It is very much like marrying someone. The decisions that you or your business partner will take can make a lot of difference in the growth and fall of your startup idea.
The business partners invest in the business and have a share in the profits and losses equally. A business partner is a commercial entity with which another entity has some form of association. This relationship can be a contract, exclusive bond in which both of them commit not to ally with any other party. A legal form of business operation between two or more individuals who share management and profits. In a general partnership, the partners manage the organization and assume the responsibility for the partnership's debts and other obligations. A limited partnership has both general and limited partners...
There is a lot that can be covered in these terms. But you need to be very careful while selecting the business partner for your next or current startup idea.
Have a look at these points given below if you are finding your Business Partners:
1. Look at Their Online Presence
You can learn a lot about folks based on their presence online. LinkedIn allows you to see who they are connected to, what people say about them, and what they say about others (which is often very valuable). Twitter allows you to understand how they think about the surrounding world and what content they consume and engage in. Facebook can help you understand what is important to them in their personal life.
You can also look for some online blogs or other publications that they might have done in their past career to understanding their way of thinking and mindset around the technical or any other aspects.
The digital footprints that anyone has left behind can help you to understand anyone's personal and professional life and history.
2. Communicate Expectations
It is crucial to establish open lines of communication with all of your business partners. All parties need to respect that a partnership is a two-way street. Without proper expectations set forth, synergies can devolve quickly.
Identify point people on each team and set regular check-ins. Create shared documentation that is updated in real-time so everyone is on the same page. Transparency and communication are the keys to successful and fruitful partnerships.
3. Make Sure They Share Your Values
Everyone involved with any of the company, from investors to employees to partners, believes in the companies' values and ethical standards. Working with partners who do not share these values could seriously discredit the reputation with the customers and other partners.
Therefore, you should be extremely thorough while interviewing partners to ensure they are a fit representation of your company before entering any agreement.
4. Work With Them for a Week
Nothing will show you exactly who you are working with like real until you are having working experience with the person. It will show you how the other person makes decisions and how they operate in general.
You’ll also understand if you have fun working with this person or group or whether they will not be a good fit in terms of the working environment. Find out if they make you better or if they make things harder or more difficult.
5. Ask Around
It is really surprising, by how entrepreneurs or business owners go into a partnership blind. Past behavior is a powerful predictor of how a leader, or for that matter any person, would behave if put in a similar situation. No talk, no brainstorming, and no legal document can substitute reference checks.
6. Have Conversation
It’s very important to choose the right people to partner with. The wrong choice in this area can have disastrous consequences. Try having a nice and casual conversation and discuss any other thing apart from the professional work affair. This will help to open up a bit more and get to know the other side of the person, who you are planning to select as a business partner.
Avoid making rash decisions based solely on obvious factors such as how successful and experienced the person is. While these are important things to consider, you should also look more deeply at their core values and long term goals.
Some of this can be done by researching their history, online presence, and overall reputation. More than anything else, however, make sure that you should talk to them a great deal before signing any agreements.
Spend more time in communicating back and forth with them online, by phone, Skype, or however is convenient. This will give you a good overall sense of who you are dealing with and how compatible you both are.
7. Discuss Future Obstacles
When entering into a new partnership, it’s imperative to make sure that the goals of both sides should match. Although potential partnerships and mergers are exciting at the beginning, you cannot let excitement cloud your judgment.
Just like you probably wouldn’t marry someone after only a couple of dates or without discussing things like about your families, religious beliefs, the future, or any other important aspect of the married life, you should never enter into a business partnership without discussing the values, goals, and systems that will be critical to your shared successes.
8. Examine Personal Goals
In a business partnership, you have to be aligned on your vision of the company and have to come to an alignment. Likely the latter. Your business partner’s personal goals also have to match (or at the very least not contradict) yours.
Can your business partner endure hard times, long hours, low pay, and/or no pay? At some point in the company, you will struggle. It’s important to know how your partner would handle it.
Apart from all the things that are listed above, there are many other things that one should keep in mind before hiring anyone as their business partner. This is just the first step. You should be very smart and documented when it will come to the legalities while hiring a business partner.