Having the perfect business partner can help you take your business to another level even faster than you could take it on your own. Not only will you have someone to bounce ideas off of, but you can also have someone whose skill sets complement your own, making you a well-rounded team. But just like any relationship, you need to date first and test the relationship, so that you don’t make an expensive mistake. Breaking up a business partnership is a major distraction, so you must choose well.
Here are tips about how to pick a business partner so you make sure the person you pick is right for your business.
1. Pick Your Partner Carefully
Just like you wouldn’t marry someone you barely know, it’s important that you get to know the person you want to run a business with. In other words: date before you get married in business.
How can you do that? Work on a few projects together before joining forces in business. See how you work together. Do you flow well, or do you butt heads? Do you enjoy working together?
It’s also a good idea to do a background check to know who you’re getting in business with.
2. Get an Entrepreneur’s Prenup
Even if you trust your new partner implicitly, it’s still a good idea to hire a lawyer to develop a formal partnership agreement. Make sure it addresses how money will be managed and when net profits will be shared, as well as how hiring decisions will be made, and spells out each of your roles and responsibilities. Make sure to clarify terms on exits, buyouts, death, and divorce.
Money can ruin a good partnership. Have clear policies drawn up on how money is handled, including vendor payments, reimbursements, cash withdrawals, etc. Having this document can help you if things go south and you need legal proof of your original agreement. If you agree to change the partnership agreement, legally document the change.
3. Keep it Business
Unless you’re married to your business partner, your relationship will do better if you focus on business and keep your ego in check. Never make decisions based on emotions, and do take your partner’s opinion into consideration. Schedule meetings to regularly review your financial statements together. Be open with information and clear with communication.
4. Don’t Be a Credit Hog
There is no “I” in team. Successful partnerships can be ruined when one partner wants to take credit for everything. If your partner has come up with a great idea, pat him or her on the back and make sure credit is given where it’s due. It takes teamwork to make the dream work. If one of you dominates the relationship, the business partnership won’t last long.
5. Value a Good Partnership
If you have a good partner and the business is successful, celebrate this. That way both will thrive. Always make sure to make decisions in the best interest of the business and not your personal self interest. Just like in any relationship it will take time and effort on your part to develop trust and keep balance in the partnership.
Understand the value of that partnership and make concessions for the good of the partnership. Remember: this isn’t just your business anymore. You share it with someone else, and everything you do should take that into consideration.
Republished by permission. Original here.