15 Key Questions To Ask When Picking A Potential Business Partner
When you’ve successfully helmed someone else’s business for a number of years, it is only natural to want to take the next step: to start up alone. But of course there is no true ‘alone’ in independent business, and what we’re really talking about is finding a successful chemistry that stretches from your suppliers, to your employees, to that key player – your business partner. This latter figure is the most important colleague of all, for you need to trust them not just with the economics and the team dynamics of your business, but with the very development of your core idea.
If you’ve been thinking about this for a while, you probably have a few ideas about whom you want to team up with – but instinct alone will not serve you well in this endeavor. While to some degree you must trust your heart, these gut feelings that individuate you as a businessperson should be carefully balanced against an objective and informed approach.
This process begins right at home: you need, foremost, to know yourself, because the person that you choose to partner up with will need to complement your skills and fulfill the demands of the business to which you are not best suited. Loosely speaking, we can talk about eight different types of business partner, each of which will function best alongside a different breed of leader.
For example, if you’re a bit of a numbers geek, a whizz with a spreadsheet, and in making realistic, ambitious projections about investments and strategies, then perhaps you’re not so good at public speaking. It’s great that you can figure out the nuts and bolts of an opportunity, but you might be best off teaming up with a real charismatic personality who knows how to sway a room of investors, negotiate with a tricky supplier, or win over an important customer. Relationships are vital to business, but you won’t find them in the back office with all the spreadsheets.
Great partners often make great companies. Ben and Jerry in ice cream. Sergey and Larry at Google. Hewlett and Packard for electronics.
There are a lot of surprising elements to a business partnership. These 15 key questions cover both the STRATEGIC and OPERATIONAL elements of your business.
- What do I need from a business partner?
- What is your potential partner’s financial situation?
- What are the potential partner’s expectations on the time involved?
- Who’s going to do what?
- Do you share similar values and vision?
- How would he or she handle a tough situation?
- What happens if someone offers to buy our firm?
- What is the potential business partner’s standing in the community?
- Who has which preferences regarding income, equity, and control?
- What happens if we can’t work it out?
- How does your prospective business partner deal with conflict or trying circumstances?
- What’s your exit strategy?
- What are the expectations for salaries and dividends?
- How will they exemplify your brand?
- How much money will you each contribute to the business?
And now a bonus question….
Do I really need a business partner?
What would you add? What have you learned from seeing friends run businesses together?
If you’re good with these kinds of details and you’re also able to talk about them well, then perhaps you don’t need another ‘skillful talker’ type in the partnership. Instead, you want someone who’s going to revolutionize the way you work in front of the white board – taking the facts and numbers you’ve crunched and putting them in the perspective of a broader idea – the bigger picture – of how you can best exploit the possibilities that you’ve upturned. We call this kind of partner the ‘global viewer’.
Conversely, if you’re a visionary with broad insights and no time for the fine print, then you need somebody who is going to work out the details and preempt mistakes. There are lots of small details to work out on any good business idea, and if your strength is in dreaming up the bigger picture then you will be unnecessarily slowed if you are also in charge of figuring out the whys and the wherefores. You need a ‘detailed observer’ – someone who takes a bit more time than you and will situate your crazy impulses into realistic contexts!
Are you more of an ideas person than a facts and figures fanatic? The business world would never progress without such individuals – but you cannot act alone. For one thing, if you’re into planning but you’re not much into taking big risks, it can be worth teaming up with a risk taker to add that spark to your explosive vision. Somebody who will back you up when you have an idea that breaks the mould, an unproven theory. Of course, if your disposition is such that you yourself are prone to pushing your wild plans to breaking point, you’ll be better off with a practical thinker – someone who understands the risks and knows how to minimize the chance of them backfiring. Somebody who can help you make the most of your original notions with a touch of smart planning.
A subcategory of that ‘practical thinker’ type is the ‘final decider’ – someone who can cut through all of your suppositions and suggestions and use their business sense to make clinical decisions about the way forward. Trust is particularly important here: it needs to be someone who recognizes your vision but also has the foresight to see the best way to realize it. It needs to be someone you can say No to if they don’t ‘get it’; but someone in whose hands you’re comfortable leaving the business for a few hours when you need to be somewhere else.
The final type is the ‘structured planner’. You probably already know if you need one of these! Some businesspeople are great with dreaming up promising ideas and getting them off the ground – but require a collaborator who can figure out the stages of development and put them into a responsive schedule. It’s someone who can take responsibility for making things happen, and help you to see the best way to implement your big decisions.
Of course, each of these partner types is described very broadly here, and nobody will precisely fit one description or another. It is important to spend at least a year getting to know a potential business partner so you can fill in the gaps, figure out if you inspire each other, and develop trust. Even if your skill sets complement each other, you may quickly find that you have a different vision for the business, or different principles about how a business should be run. Ethics, and personal chemistry, can be just as important as experience and qualifications.
And even if you’re going with someone you’ve known for years, it’s important to remember that people – and conditions – change, especially when you work closely together on a project that will at times be stressful. Make sure you discuss your respective rights and responsibilities as partners, and put these down in a charter to which you can both refer through good times and bad.
These ideas have been gathered into a handy flowchart to help you make a preliminary appraisal of the type of business partner that you might need. Study it carefully before you make any big decisions, and you have every chance of finding the right balance to take your new business to the heights that it deserves.