There comes a time when many entrepreneurs decide to take on a partner in their business. Another head and pair of hands is always welcome in any business, especially if the person brings much-needed capital and experience to your business, but what should you consider before you get into partnership with someone else? Here are a few guidelines written with entrepreneurs in mind.
Who should you partner with?
Often business partners are former colleagues who have worked really well together on projects and complement each other in various ways. A technically-minded entrepreneur may want a partner who is more focussed on marketing and attracting investors, or vice versa. It’s also advisable to partner with someone who you know quite well and have worked with before.
When you consider taking on a partner, ask yourself these questions:
- Do I really need a partner? Is there a reason why you can’t continue to run your business alone, or are you looking to expand and need someone you can rely on to help you achieve this goal?
- What will my partner bring to the business? Your partner should handle key tasks in the running of the business, allowing you to focus on what you do best. A partner who is willing to inject capital into the business is always a benefit.
- Are our visions aligned? If you are the company’s founder, you’ll need to be very sure that your partner is on the same page as you when it comes to running the business and achieving your goals.
- Can I give control to my new partner? Are you willing to trust your business partner with important areas of the business, or will you be second-guessing them?
Defining roles in a partnership
One of the most important things that any business partners can do is sit down and discuss the role each of them will play in the company. Partners who have different skills and strengths should align these with their roles in the business so that each person will bring their best to the company. It’s important to write this down in a formal document to prevent any conflict in the future because of a misunderstanding.
As the business grows, partners should be open with each other about how they see the future of the company and what role they would like to play in it. Some business partners struggle to make the transition from small to large companies, and if a partner has reached a stage where they would like to move on, this should be managed very carefully so that no damage is done to the running of the business.