Finding the right business partner is one of the most important and difficult things that an entrepreneur does. Below are some tips on what to look for when choosing a business partner.
The first and most important step in the process is knowing exactly what skills and experiences are necessary to make your business a success. Make a brief list of each skill and experience (i.e. sales, engineering, marketing, operations, business development, etc.) that you will need.
From there cross off the things that you bring to the table on your own. Be honest with yourself about what roles you'll be able to do and what skills and experiences you just don?t have. It might be fun to learn how to do marketing, but it?s not wise to learn on a viable business venture unless you have to. Once you cross off your skills and experiences, the leftover items end up being the attributes you need to look for in a business partner. The best partnerships work because each partner has something different to bring to the table and can do things that the other can't do on his or her own.
Now that you know what you need, there are a lot of places where you can try to start looking for a business partner. You could talk to friends, go to local networking events, search job listing sites or browse through the listings on PartnerUp, which was originally designed for just that purpose.
If you?re looking for someone within a specific trade, like an electrical engineer, find out what local trade associations and networking events exist for those individuals and attend those events. You can also try calling professors at your local university and see if they know of any entrepreneurial students, alumni or professors who might be interested in your idea. Finally, don't forget about existing contacts that you have who could potentially know someone with the skills and experience that you're looking for.
Be incredibly picky about potential partners before taking the plunge. During your search you will likely meet many intelligent business people. Will they all be right for you and your business? Absolutely not. Pick someone that is as excited and as driven as you are to make the business idea a success. Interview the person, ask him or her every question you can think of, make lists of what you want the person to contribute and don't let emotions get the best of you.
On top of that, you're going to want to get to know potential partners before you dive in. Meet them for coffee or dinner, sit down and talk about potential issues and the business, put together a rough business plan with them, talk about how you would run the company. You probably wouldn't go out to an online dating site, find someone and marry that person after one or two dates. Would you? A business partnership is also a huge commitment, and you should build a strong relationship with potential partners before committing to a close working relationship.
Once you've decided on a business partner, schedule a meeting between you, your partner and a lawyer. Tell the lawyer what type of company you're looking to start, what your goals and exit strategies are, who?s contributing what to the company and any other relevant information. Ask the lawyer to put together a recommendation for entity type and a proposal for equity distribution. Go back a few days later with your partner and review the lawyer?s recommendations. If everyone is in agreement, have the lawyer form the business entity and put together the documentation. I also recommend that you include a shareholder?s agreement, which covers issues like what happens if one of the partners decides to quit, what happens if the workload becomes unevenly distributed and any other issues that could come up. A good lawyer will see many of these issues right off the bat and should be able to address them promptly, so that you won?t have to later.
When you choose a business partner, you do so based on skills, experience, personality, drive and goals. You choose your partner because he or she can do certain things better than you can. So assigning roles for each partner to take ownership of seems logical but is often overlooked, which can lead to partners stepping on each other?s toes. Assign roles in the beginning of your partnership, during the business planning phase, so that you each have a clear definition for what your roles and contributions will be within the business. Stick to what you know and let your partner take charge of what he or she knows. That?s the way to build a successful partnership and a successful business.
