So, you’ve began making your business idea a reality, you’ve got your business plan prepared, you even done the New York Secretary of State business search online to make sure that name is not already taken. All that’s left, before opening the doors, is to find a good business partner.
Finding the right business partner is as much of a gamble as finding the right life partner. It may all begin with dreams and promises but can quickly turn into anger, heartbreak, bankruptcy, and lawsuit. Therefore, to avoid such occurrences, make certain considerations beforehand. Here are a few points to pay attention to before choosing a reliable business partner.
If any deal involves money, dignity, and future, trust is the most important factor that needs to be considered. Ask yourself if you can trust this person with your hard earned money. If you don’t have a good gut feeling about it, stop right here. Think twice before you make your move.
2. Investigate By Working Together
Don’t assume that having too much information about your partner is all you need. You also need to spend time and work with the individual to find out if a business partnership can be established. Focus on their work experience, their ethics, style of working, and most importantly, their set of skills. Prepare a partnership deal if you two connect well.
3. Find Matching Ethics And Values
Do you match at the energy and enthusiasm level when it comes to the business and its goals? Being able to work as a team and to bring the same level of energy and standards, the partnership seems promising. In addition to the growth of your business, your partner should share your values for serving customers. This will make him or her more trustworthy.
4. Dovetailing Skills
A solid partnership is in the making when two individuals with similar expectations, ethics, and values are working for a common goal. However, it’s the unique set of skills of each partner that contributes towards making it a success. If you aren’t someone with patience or confidence to deal with people, then you need a partner who is.
In a partnership, there are tons of aspects that need to be talked about and responsibilities that need to be agreed on upfront. Both the parties are required to show some level of flexibility in order to make the team work successfully. Keeping up with your set of responsibilities and authority in the business, while giving the other partner their respective rights is the key to maintain a balanced partnership.
6. The Take On Money
Money is the major factor why partnerships go off track. Therefore, learn about the other person’s take on money.
Also, it’s best to agree on all funds-related aspects beforehand – especially about the distribution of profits. This will help avoid disputes later. A great way to calculate profit distribution between the partners is by determining the number of hours each individual is investing in the business operations. While it works more like a salary, it can be a fair deal that two individuals can agree on. Use software such as Clockspot to make it transparent.
Put a valuation formula both partners should agree on. This way, you’ll be able to determine the company’s value and how the partnership can be split without disagreements and lawsuits. Also, discuss the buy and sell agreements beforehand.
These considerations are important because you don’t want all your business efforts to go down the drain because of one wrong move. Get in a partnership only if it shows the full potential and works in the favor of your business.