From Amazon to Intel, some of the world’s most successful companies have been built on business partnerships. Starting or growing a business with a business partner can have many benefits: they can bring complementary skills, experiences and contacts to the table, and be a crucial source of support on the entrepreneurial journey.
But it’s a serious commitment. Given the time and resources it takes to build and grow a business, many liken taking on a business partner to getting married, so you’ll want to choose wisely.
Do you need a business partner?
Firstly, consider whether you really need a partner at all. It’s a big step to share an ownership stake in your firm, so consider whether the need you see in your business could be met by other, less-involved options. If you’re wanting people to regularly bounce ideas off, for example, could you get that by extending your business network, setting up an advisory board or joining a shared work space like community101?
A truly successful business partnership is one where the partners share the big picture, a vision and passion for the venture, and fill each other’s gaps when it comes to skills. One partner might have the technical nous, for example, while the other is the sales whiz. So if you truly feel this is what your business needs to grow, then taking on a business partner might be for you.
Finding the right match
The first step to identifying what you need in a business partner is to look at yourself. What are the skills and experience that the business really needs to grow – now and into the future – that you don’t already have? Finding a partner with a skill set that complements your own (and meets the needs of the business) will create a more well-rounded operation and help clearly define each partner’s role in the business.
Equally important is a match in vision and values. Do you have a common vision for the future of the business? Do you share the same work ethic and commitment to get there?
And no matter how well you think you might already know your potential partner, always do your due diligence. As well as checking and verifying their financial records and business history, look into and question their connections. Do they have a track record of ethical and productive relationships with other business partners, employees, clients, and suppliers for example?
Sealing the deal
Given you’ll be spending a lot of time with your business partner it’s important you’re confident you’ll get along in your new roles, so before formalising a partnership it can help to spend a trial period working together.
And no matter how positive you both feel about entering into a partnership, it’s crucial to seal any deal in writing. This includes consulting an accountant on the best business structure for your partnership situation, and a lawyer to draw up agreements around your respective rights and responsibilities in the business, how you’ll resolve any disputes and an exit strategy should things not work out.