Many years ago an ex-work colleague approached me about going into business with him. I was surprised because we were never particularly close or worked that much together. We met up for a coffee and he went through his business proposal which was sound and well researched. While I thought the idea had merit, I knew I wasn't the right person to work with him. Not only was the industry something I didn't have much interest in, but we had completely different personalities. I could see arguments over the little things and that is never a good sign. We parted amicably and I have never heard from him since, nor did I expect to. While the approach to form a business came out of the blue, there are many people out there looking for a business partner in one way or the other. Some need an experienced hand to guide them along, others are desperate for working capital, while some simply lack the confidence to go it alone. Whatever your reason for wanting or needing a business partner or co-founder, here are some tips.
10 tips for choosing a business partner or co-founder:
1. Spend time together first
You need to get to know someone before you can establish whether you can work with them. Whether it is a silent partner who is just putting money into the business, a co-founder who will be working side-by-side with you, or a venture capital firm wanting to invest time and money, you need to know whether you can work with this person, people or company. Everyone is different and you won’t know if your relationship will work until you have spent some time together.
2. Look for similar values
You don’t have to support the same sporting team, nor have the same religious beliefs, but if you don’t have the same values when it comes to hours worked, money invested, what you want from employees, the relationship won’t last and neither will your business.
3. You need to have similar business goals
If one partner wants the business to be a global leader, while the other is content with just one per cent market share, you will never be on the same path together. You need clear goals from the outset and they need to put in writing so there is no mis-communication down the line.
4. Ensure that they are comfortable with contracts being drawn up
No matter how well you know someone, people get funny when money, either large sums of it, or little amounts, are involved. Best to have a strong, clear contract drawn up from the beginning that clearly states each persons responsibilities, the name of the business, equity shares, salary, bonuses, working hours and more. If a proposed partner doesn't want to sign a contract, walk away.
5. Keep it platonic (unless you're already together)
We all like to celebrate a big client victory with a bottle of champagne or two. Why not, you deserve it. Though a word or warning - it's best to keep the relationship platonic. Blurring the boundaries between business and pleasure can have disastrous consequences. Suddenly every little comment or look can take on a different meaning.
6. Complimentary skill sets
It is important that your business partner has skill sets that will compliment yours and visa versa. You can’t do everything yourself, nor can you possibly be skilled at everything, so ensure that whether you have one business partner or many, that each will bring a special skill set to the business that you or others don’t have.
7. Decide how decisions will be made
If there are only two of you, there is a good chance that you will disagree on a particular issue or subject and a decision will need to be made either way. It is best to get that out of the way upfront because if one person won’t let go of their ego at the beginning, it doesn't augur well for a long-term business partnership.
8. Do your research on your potential partner
People can sound great on paper and even ‘schmooze’ you in a meeting, but you need to thoroughly check your potential partner’s credentials from at least three different sources before you go into business together. Due diligence should never be underestimated.
9. Someone who has a different network to you
Whatever your contact list, it can always be added to. Networking is fundamental to business growth and if you are going to partner up with someone, ensure that they have an extensive network that is different to yours.
10. Have an exit strategy
No matter what you are doing, there is going to come a time where one of you might want to move onto something else, or life dictates the need to change. Therefore, have a clear exit strategy at the beginning. It might never eventuate, but at least you have planned for it.