Do you need a business partner? A partner can be your best asset or your worst burden. But not all startups need to be partnerships. Your circumstance dictates your decision. Even more important than this decision is the choice of the right business partner.
Do You Need a Business Partner?
Before you decide who can be an appropriate partner in the venture, you need to pay attention to this basic question. The answer is in the affirmative in the following circumstances:
It is Complex
A new venture requires effort in every aspect. Apart from the core business idea, there are numerous things you need to take care of – formalities, taxes, accounts, finances, contacts and many others.
If the new business is of a complicated nature, the chances are high that you would find it difficult to do everything on your own. Hiring employees is often not an option for a new business, as it would mean more worries about overhead costs, taxes and salaries.
You need a partner who can handle some of the tasks and ease your burden.
You Lack Knowledge and Experience in a Certain Area
Accept it; no one can know everything. You can be very good at technicalities but very poor at sales and marketing. This often creates an imbalance in a new venture.
Suppose your startup is about selling computer applications. Even if you have extensive knowledge and experience in computer applications, you may fall short of success if you fail to focus on another aspect of the business – the selling of the products.
You need a partner who can add on to create the perfect set of skills and expertise.
It Requires Teamwork
Some people work best when they are in a team while others achieve success as a loner. If you are in the first category, you may find it difficult to work on your own when you start off.
Moreover, some businesses require diverse skills to attain success. A team is better suited for such ventures. When you team up with someone who fills the gaps and brings another perspective, your chances of success increase.
You need a partner to make the ideal team for your new business.
Who Can Be Your Business Partner?
Attention to the dos and don’ts is essential to make this choice. The right characteristics in your partner can make your business a success; the wrong ones can ruin your chances.
Choose Someone You Trust
You cannot build a successful relationship if you don’t have trust as its foundation. The same applies to business partnerships. You need someone you can trust and someone who can trust you.
If you cannot trust your partner, you would only end up wasting time and effort monitoring them. It would do more harm than good. Make sure the partnership is based on mutual trust.
Don’t Confine Your Choice
A brother, a spouse or a friend can be a great partner for your small business. Such a partner may be easily convinced about your idea. It may also be easier to accumulate funds when you have a family member or friend as your partner.
The point is – don’t let a relationship dictate your choice of a business partner. Your brother may be good at handling accounts, but he needs to be much more than that to be a practical choice. If he can add value to the business, he is the right choice.
Find Someone Talented
You need to find someone who can compensate for the lacks you have. Choose someone who complements you with regard to knowledge and experience to ensure that your business is a success.
An equal can be an ideal partner. If you choose someone way ahead of you in terms of knowledge or experience, you may end up as a follower. If you choose someone who is way behind, you may end up with a burden instead of an asset.
Don’t Compromise on Ethics
Have extensive discussions with a potential partner about business ethics and practices before you make the selection. At times, the little differences can snowball into big problems.
An unethical or unscrupulous partner can ruin the reputation of your business. He/she can cause other problems too. You need to trust your partner; but if you trust someone like that, you may end up in big trouble.
Do Ensure Mutual Respect
A high opinion about someone can make it easier to create a successful business partnership. If you don’t have respect for your partner, things can become difficult in the long run.
A trustworthy, talented and estimable individual can prove to be an appropriate business partner. But you need to make sure that you two share the same values and principles yet have different perspectives to make a winning partnership.
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Richard, this topic is high on our list of things very important yo small business owners, and you’ve the points dead on. We’d like to do a follow-up to this. Are you interested in this?
Thanks for the appreciation, Donald! How do you propose to do a follow-up? Do let me know.
As I mentioned, We’re going to do an article on this topic in our Blog, and I’d like to have your article re-printed there with your permission. I can DM you on Twitter my email and we can go from there if you’re interested.
Hi Donald, In the future, please contact us as the Publisher directly regarding republication rights. But you have permission to use this article, provided you indicate it was previously published at Small Business Trends and include a link to this page.
Anita Campbell, CEO and Publisher
Small Business Trends
No problem Anita, wanted to make sure that Richard, as author, was OK with it first, then reach out to you for permission to re-publish. Thanks for doing this above.
We think that this is an extremely important area that small business owners overlook, ignore or aren’t even aware of, even though it is a key risk factor in every small business situation.
Thanks, and I agree, Donald!
I agree with everything written in the article and believe partnerships can be very beneficial to a business as the article stats. I also believe the key to a good partnership is a partnership agreement. Find the basis of good partnership and customizable partnership agreement here:
You are absolutely right – a partnership agreement seals the deal! However, you have to focus on the relationship to make sure the agreement works out. Thanks for your opinion, Dee!
These tips definitely apply when choosing an outsourcing partner as well. Great list! Thank you!
Thanks Alleli! Yeah, they do apply when you are choosing an outsourcing partner.
Donald, republication is a possibility; however, you need to acknowledge the source, along with the link. With regard to the follow-up, you can DM your email on Twitter. Thanks!
Being an entrepreneur, this list really helps. Thank you! I especially agree with partnering up with someone who complements your skills with their own set up skills. A full rounded set of skills is required for a successful venture.
I agree with you; it is much easier to succeed when you have the right partner with the right set of skills. Thanks!
Business partnership is a double-edged sword. It can bring valuable skills, expertise or money you may not have. It can also bring host of other problems if not done right. Choosing the right partner is the first step in making the partnership work.
Whoever you choose as a partner you need to ensure you have solid and detailed partnership agreement in place that outlines roles and responsibilities as well as future of the partnership. Without having a legally binding agreement you can run into multitude of issues.
You might also be interested in additional ideas on how to make partnership work – an article I wrote a while ago. Would love to hear your expert opnion on this – http://www.smallbizviewpoints.com/2010/05/19/how-to-make-partnership-work/
Read your post. Great tips! It takes hard work to get a start-up off ground. Even if you have the right partner, you need to work on the partnership to make things work to the business’s advantage.