A general partnership can be something great, or it could bring many struggles.
Before you decide to have a partner in your business, you should explore every option and scenario you can imagine. You don’t want to go into a business partnership lightly.
What people typically fail to realize, is that a partnership in business is a lot like a marriage.
Every person exploring the idea of a partnership should investigate this before committing to something that could end in endless frustration and legal proceedings.
Before you decide on going into partnership, you may want to consider the 5 questions below to determine if you need a business partner.
What do you want in a business partner?
There are so many reasons why someone may want a business partnership.
One of the first questions you should ask yourself is why you want a partner and what is the most important value you are looking for in someone.
This is super important when it comes to understanding each persons’ role in the business.
This helps partners understand what is expected of them and may help you realize if you actually need them at all. If two people are great at doing the same tasks and have the same skill sets, you might not need them at all. You could probably do this with only one person.
Understanding what you want in a business partnership will help you find someone with the skill sets and strengths you lack. This will also help to ensure that every aspect of the business will be covered by someone whether you have multiple business partners, affiliates or employees.
Does your potential business partner have the same core values and expectations?
When looking for a business partner, it’s essential to consider their core values.
You want to make sure you are on the same page when it comes to long-term and short-term goals, brand identity, policies, finances, etc.
Having the same core values and expectations can really make or break a business.
A simple conversation about what each person’s goals and expectations are could be the key to hitting success.
Do you compliment each other?
You might be looking for someone whose talents and skills complement yours, and this is critical to a successful business partnership.
If you are very structured and organised and they are the complete opposite, you may find yourself getting very frustrated with the way they work and do things.
Really understanding how your potential business partner works and lives can prevent careless mistakes in the future and save you both a lot of money.
How much do you value what your potential business partner has to offer?
Each partner does not have to be paid equally in your business.
Depending on how much you value someone’s skills can directly factor into how much they own. If you think they offer something extraordinary and unique to your business that you cannot do could mean they get more equity.
When you are exploring the idea of a new partnership, you have to explore every scenario and find someone who really brings something unique to the table.
You have to decide how much equity you want to share with them.
This could mean you share the business equally at 50/50 or you could explore a vendor partnership for a specified time period.
You could also create a contract that says if we meet this goal, then we can become business partners.
In any case, whatever scenario you feel most comfortable with is what you should do.
What happens if one partner has a tragic accident or wants to leave the partnership?
Here again, you want to put a value on what each of you is worth, and you want to make sure you are covered if your partner experiences a tragedy that prevents them from continuing in your business.
The point here is to think through every single scenario that could happen. Make sure to protect yourself and your business that you have worked so hard for.
Conclusion
The questions above should help you understand what things to look out for in a potential business partner and prevent your business from big problems or loses in the future.
Make sure to remember to really do your homework before you agree to, or enter into a business partnership.
