When you are considering joining businesses with another person, there is a lot to be considered before you sign on the dotted line. If you are married, think back to when you first met your spouse. Most people refer to going into business together like a marriage. And, in many regards, they are correct. Both agree to a long-term commitment that requires a lot of time, trust, and devotion.
The most important part of this package is trust. The worst that can happen is the business is a bust. Even the tightest friendship can end in a nasty way if a partnership business goes down in flames.
If you are considering entering into a business partnership with confidence and clarity, you must start with answering a few questions:
1). How Much Psychological Safety Exists Between the Two?
The “psychological safety” is a term that means all parties are confident that other members will not punish, reject or embarrass someone for merely speaking up. Joining forces is exciting, but it also places you in a weak position. The person you choose as your partner is one of the most critical decisions you will need to make. You should take into consideration how your partner will impact your identity.
2). What is Your Shared Purpose?
You may find a partner that is as enthusiastic as you are, but, never as invested emotionally as you. Significant values that are necessary for a successful partnership are policies, brand identity, and long-term growth strategies. It is crucial that you both treat each other and others outside the business with respect at all times.
3). Are you splitting the company 50/50?
Will both parties have the same amount of funding invested? Will both partners share the same amount of ownership? Keep in mind that it is vital that you have your attorney review every agreement to ensure profit amounts for each party go accordingly.
You should also make sure you are okay with any such tie-breaker clause should the two of you disagree. Perfecting this section is very important. Start by consulting an attorney who specializes in business arrangements.
5 Strategies To Find The Perfect Business Partner
- Find someone you genuinely enjoy, like, and trust.
- Find someone who shares your values.
- Find someone with a complementary set of skills and traits.
- Find someone who gives and takes.
- Find someone who wants to grow and will support your growth.
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Working with a business partner drastically changes the dynamics of running a business. A great business partner can add a lot to a venture. On the other hand, entrepreneurs can also benefit from going solo when the alternative means an incompatible partnership or working with a partner who doesn’t have the right skill set or experiences necessary for success.
Having a business partner has advantages and disadvantages. Working with a partner may or may not benefit you and your business.
Some of the advantages of working with a partner include:
1. Twice as Much Manpower
When you work with a business partner, you can do twice as much work. A lot of work goes into building a business. You need to do marketing research, networking, research and development, sales pitches, and meet with potential lenders or investors. All of this can overwhelm a business owner. In the early stages of a new venture, you may not have the resources to hire employees to assist you. Thus, you may need a partner you can trust to share the burdens of starting a new business.
2. Diversity in Skills
A business partner may bring an entirely new skill set to the table. One business partner may have a background in engineering and research, while the other excels at sales and networking.
3. Different Perspectives
Business owners need an outside perspective to avoid tunnel vision. Successful entrepreneurs have faith in their ideas, but may need someone else to put things in perspective.
4. Someone to Hold You Accountable
Some people become lackadaisical when they begin a business. They may have a hard time maintaining the discipline needed to stay motivated. Partners keep each other on the ball, and hold each other accountable for any mistakes.
5. Someone to Evaluate Ideas
A business partner helps you realistically evaluate new ideas and business plans for potential flaws. Your business partner can also build off your ideas, offering more input to refine your plan, so you have a better chance of succeeding.
6. Networking Opportunities
Having a partner gives you the opportunity to expand your list of contacts, and multiply your numbers of potential clients, investors, suppliers, and mentors.
Business partners can become your greatest asset or worst liability. Deciding whether or not to go into business with someone else may be one of the most important business decisions you ever make. Deciding who you go into business with can be just as important. Weighing the advantages and disadvantages of having a business partner, and carefully analyzing the reasons for choosing a business partner can help ensure that you find the right person to entrust with your business.
Tags: Business, Business Partner, Small business funding
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