Choosing a business partner is a big decision — really, really big. This is the person you’ll work closely with for years to come if you’re successful, but you won’t have a chance of reaching your goals if you and your business partner are not the right match.
As business partners, you’ll be tied to each other. Decisions made by one partner will directly affect not just the business but the other partner as well. It’s like a marriage because you’re in it together, and the actions of one equate to the actions of both. You can’t say, “That wasn’t me – it was my business partner.”
With that in mind, how do you pick the right business partner? My first recommendation is to move slowly and purposefully. Don’t jump into a relationship because it can be hard to get out of it unscathed if things don’t work out later. To choose the right business partner for your entrepreneurial venture, follow these five critical steps:
1. Choose a Business Partner with Complementary Knowledge, Skills, and Experience
Most importantly, you need a business partner who can do all of the things that you can’t do. For example, if you’re a marketing professional, then you need a business partner who has skills, knowledge, and experience in finance, operations, or another aspect of running a business.
Yes, you can hire someone for these roles, but when you and/or your business partner fully understand how each department in your business runs, your company will be significantly stronger.
2. Choose a Business Partner with a Complementary Personality
Two big thinkers leading a company without a budget to hire a staff (yet) will have a very hard time getting any project off the ground. Similarly, two detail-oriented people with project management mindsets could have trouble coming up with the big ideas need to continually move a company forward.
In other words, if you’re a visionary thinker, find a partner who is a process-oriented thinker. The infographic from The Business Backer shown at the end of this article includes a fun flow chart to help you determine your working personality and the personality of your ideal business partner.
3. Choose a Business Partner You Really Know
Unfortunately, you never fully know someone until you work with them on a day-to-day basis. That means you can’t jump into a business partnership. Instead, you need to really get to know each other.
This includes their skills, personalities, work ethics, values, communication styles, short and long-term goals, and more. The infographic below recommends that you know a business partner for at least one year before you commit to forming a business together.
4. Choose a Business Partner with Similar Core Values
Business values and ethics matter, and it’s a topic you shouldn’t forget to address with a potential business partner. From how the company culture will work to how day-to-day operations and problems will be handled, you and your business partner need to be on the same page.
Take some time with your partner to develop a set of core values for your company. If you can’t agree on how employees should act, how customers should be treated, how decisions should be made, and how problems will be addressed, then you shouldn’t be in business together.
5. Choose a Business Partner Who is Willing to Get Your Legal House in Order
When you’re ready to launch a company with your business partner, you need to get everything in writing. Remember, you’re both on the hook if someone makes a bad decision. As the infographic below explains, you need to document responsibilities, rights, and your exit strategy if one of you decides to walk away from the business in the future.
If your business partner doesn’t agree to work with an attorney to ensure all of the necessary documents are in place, then you might want to reconsider whether or not you should be business partners.