How to Find the Right Business Partner

Not surprisingly, finding the right business partner is often compared with finding a spouse. The challenge, of course, being that it is hard to find the right person the first time around. Ideally, partnerships should be a balanced mix of similar values, goals, as well as business and interpersonal skills. If you are thinking about finding a business partner to assist with an existing or new venture, consider the following tips:

1. Compatibility. First, evaluate your strengths and weaknesses. From this, you should be able to determine where you need a partner to fill in the gaps. Ideally, you want to locate a partner who compliments your experience and skills. For example, you may excel in the customer service, sales, and marketing-related tasks, but are weaker in tasks that involve financials, operations, and so forth. Think about all the bases that need to be covered, and what attributes and skills are needed in order to round out the needs of the business.
2. Common values. Everyone is unique in the values they keep. In a business partnership, it is important to take into account a partner’s values, and how he or she prioritizes those values. For example, if you consider good work ethic to be at the top of your list, you will likely seek and respect a partner who holds the same value in a high regard. During the screening process, ask a potential partner questions about his or her background, experiences, and upbringing to determine if your values are comparable, and similarly prioritized.
3. Common goals. Make sure you and a potential partner have common goals in mind for the business venture. Profits are an assumed goal, but also discuss any other goals such as individual profit expectations, the shared purpose for the venture, and so forth. It is a good idea to re-visit common goals on a periodic basis to make sure partners remain on the same page. In the early stages of a business, it may make sense to re-confirm goals every few months; for more tenured businesses, perhaps annually.
4. Commitment. Locate a business partner who is serious about his or her commitment to the business venture. This includes a time commitment, as well as resources and financial commitments (see below). Early on, agree on the levels of commitment that are feasible for all parties involved. Keep in mind that lifestyles differ, and operating an equal business partnership does not necessary mean identical work schedules. Discuss what works well for each individual, and plan accordingly.
5. Financials. Partnerships come in many different forms. Whether you are seeking a 50/50 partnership or something on a lesser scale, make sure your partner is willing to make the investment in the business. Generally speaking, a partner who does not have the funds to invest will not have a vested interest in the venture. Make sure you decide on the financial commitments and obligations for each party early on, and determine how profits are going to be distributed.
6. Roles. Defining the roles and responsibilities of each partner is very important. Never make any assumptions, and make sure all bases are property covered and documented. You will need to specify key roles within the partnership such as responsibilities including day-to-day operations, areas of expertise, resources, financials, technology, and so forth.
7. Adversity. Businesses are cyclical in nature. You will have your ups and downs with operations, marketing, employees, and profits. When you are seeking a partner, make sure you ask pertinent questions that uncover how he or she deals with the adversities that come with operating a business.
   
   Beyond the day-to-day struggles involved with business operations, the time will eventually come where you need to implement an exit strategy for the partnership. It is a good idea to have exit strategy discussions early on, regardless of when you will actually need to exercise the plan.
8. Check background. No matter how long you have known a potential partner, it is always a good idea to run a background check. This may include calling references, checking credit history, and so forth. This especially becomes important if the partnership involves any type of stock, or equity partnership for the venture.
9. Legal guidance. Partnerships can get complicated. As a general rule, it is advisable to seek legal counsel who can explain the obligations and limitations of the partnership. If legal expenses are too much to bear in the early stages, consider locating counsel who can bill a nominal fee early on until you get your business up and running. Legal counsel, although pricey, is worth the investment when working within a partnership.
10. Trial Period. No matter how much due diligence you do early on when seeking a partner, you can never be 100% sure a partnership will be successful. One possible solution to combat this issue is to implement a trial period with a new partnership. Doing so could serve as a safety net in the event you need to locate another partner.

Once you have found a partner, make sure you outline key roles and responsibilities early in the process. Revert back to your original business plan, if needed, to make sure all bases are covered. Also, plan to draft up the necessary documentation so both parties thoroughly understand their roles and responsibilities, and have a written copy to refer back to when questions, concerns, and disagreements arise.

When partners successfully work towards a common goal, the team will often accomplish more than what either individual could have achieved alone. In short, although it is a difficult feat to locate a business partner compatible with your strengths, mindset, and business acumen, locating and operating within a successful partnership will ultimately pay off in dividends.

This article is designed to be an informal guideline to finding the right business partner. For specific advice on individual requirements, seek the appropriate legal counsel.

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