I’m a big fan of business partnerships. And I know I’m in the minority – or at least it feels like it.
There’s a whole school of thought out there that you should never have a business partner. And you know who holds those thoughts generally? Very small businesses.
Take a look around. Businesses without partners or multiple owners generally are very small.
There’s a real advantage in getting into a good business partnership. Combining skills, adding more resources for your customers and doing more together than you can do alone can be very beneficial. But you got to build a partnership right.
In the course of my legal practice I’ve worked on many business partnerships. I’ve been involved in business partnerships in my own business. Because of this I know some of the characteristics of what works and what doesn’t work.
This article is dedicated to you and helping you find ways you can test a potential business partner. I believe in partnerships and I also believe the key to good partnerships is the conversation you start with. The beginning, the foundation, is what determines the end.
Here are five things that I’ve learned over the years from my business partnerships and from my clients’ countless business partnerships that could be used to further the conversation and make sure that you’re getting the right business partner. Ask these questions – and consider the answers – before you start.
1. Have a “Dreams” Conversation
One of the best things you can do in a business partnership is have a dreams conversation. Talk to your business partner about what your dreams are. Are they an alignment with your dreams?
I once worked with a business partnership where one of the partners wanted to grow the business exponentially into a massive operation while the other partner wanted to keep it small. It’s easy to imagine that these two business partners would have radically different answers to questions that will come up within the business. And that it would be difficult for them to reconcile and keep the business moving forward.
I’m not saying that you and your business partner have to have exactly the same dreams in life and in business. But they should be in an alignment. What is your dream? What is their dream? How’s the to play together?
2. How Have They Treated Others?
Another great question to dig into with your business partner is how they treated others. You can ask them directly and get some stories of the past from their perspective. You can also ask around the community and get feedback from others that have interacted with them.
What has their character been like? Have they been good to their other business partners and associates? Have they fulfilled their commitments? Have they been sued for not completing work?
What you want to do here is take a look through whatever evidence you can collect about what your business partners track record has been. Usually if they treated others well and with respect they’ll do the same with you. And odds are if they haven’t been good to others they won’t be good to you.
3. Talk About Specific Gives and Takes For the Partnership
To make sure you have the right business partner you also want to talk about the gives and takes of the partnership. When my clients come to me to form a partnership I often give each of them a sheet of paper and tell them to divide their sheet of paper into two columns. On one column each partner writes what they want from the partnership and in the other column the partner writes what they want to take from the partnership.
As basic is the sounds this exercise can unlock a lot of unknown things about the partnership and the partners. Are the gives and takes consistent with each other? Can they be reconciled?
Does one partner want to take more than they want to give? Or are the two columns of near equal value?
It’s not uncommon to find it a partner wants to take more than what they offer the partnership. And if that’s the case it may not be a good idea to even start the partnership in the first place.
So get specific about what each partner will given take from the partnership and what that will look like.
4. Talk About The Potential For Disagreement
All partners, whether they be romantic partners or business partners, will disagree. It’s not “if” you’ll have a disagreement it’s “when.”
Many partners don’t want to destroy the romance and talk about the potential for disagreement early in the process. However, it’s very likely that a disagreement will happen and probably a big one at some point.
The time to talk about the potential for disagreement is at the start of the partnership. Talk about what happens if the business forks and you want to go different directions.Talk about what happens if one of your health or values changes. Talk about what happens if something negative happens like substance abuse or arrest.
These are all things that many partners sweep under the rug and don’t want to face. But having these hard discussions early on will a very solid foundation for your partnership.
It’s better to work these things out in advance than to let the business suffer or even fail due to one of these issues arising during the partnership.
5. See What Happens When They Don’t Get Their Way
Another fantastic test for a partner is to see what happens when your partner doesn’t get their way. What’s been their track record?
You’ll want to look at their track record both with you and with others.
It’s common for humans to be disappointed when they don’t get their way. And your partner isn’t a bad partner just because they might get disappointed from time to time because the decision goes against them. But do they stay productive and connect it to the business?
If they get too upset and offended if they don’t get their way there could be a bigger problem looming. The truth is if you have a real business partnership with multiple people involved nobody’s going to get their way every time. So take a hard look at what happens when your partner doesn’t get their way.
Does their track record of action in those situations look like the track record of somebody that you’ll want to be working with where you may be disagreeing from time to time?
Conclusion
People unnecessarily avoid business partnerships. They are very valuable arrangements and they do a lot for the partners and the business world. I think it’s a big mistake to avoid them.
Instead of avoiding partnerships we should be asking tough questions, having deep conversations and thinking about the value we can add to our customers in our world. I think if you look at these 5 questions and use them to consider your next partnership you’ll find that you’ll form more powerful business partnerships and accomplish more in business.
Do you really want to make plans that work?
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Resources:
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