Deciding the right business partner
A moment ago, someone asked me in my FB wall on how should he choose a good business partner. I think this is a good question which I should share with entrepreneurs since finding a good business partner is mission critical to a business.
Choosing a good business partner can be based on many factors. I have been into many good and bad partnerships over the last 15 years of entrepreneurship that I think I have seen it all. Business partnership is like a marriage. It is easy to form a partnership, simply by just registering with ROC or SSM but it is not easy to maintain and certainly difficult and costly to end a partnership. Imagine all the legal fees and division of assets one will have to go through to end the partnership.
So, over the years, I have accumulated a wealth of experience when it comes to business partnerships. But essentially, for a startup, one may want to consider the following as some of the points you may want to consider before signing on a partnership. They ranges from:
- Synergy – does the partner provide some degree of synergy to your business?
- Trust – do you trust your partner as if trusting him/her with your life? Remember, a business is akin to your life as you are putting all your life resources – time and whatever money that you have – into a business and partnership.
- Value add – does your partner provides any value add to any gaps in the business? Does he/she complements you in the business?
- Team player – is your partner a team player? Is he/she a good team player?
- Comfortable – are your comfortable with the person that you will be partnering with? This is a key point that I always look into and more often, I rely on how comfortable I am with the person.
- Common vision – do both of you share a common vision on the business? Are you both in agreement on the direction of the business?
- Ability to listen, be heard and find the best solution – partners at times tend to disagree on certain things. I feel it is really good to disagree because this brings out the best for the business. Question is: can both partners agree to disagree and work out a common solution that incorporates the best ideas and acceptable to both partners?
- Understanding – does both partners have a common understanding about the partnership and business? Trash out everything and every expectations that the partners have at the onset so that there will be no misunderstanding among partners. Best of all, agree that if there are anything that needs clarifications, either partners can call for a partners meeting over coffee and discuss on the issues.
- Ability to work with you – very essential in a startup because we need all the skills, resources and connections that we can get from our partners
- Money – I won’t say this is the most important because we can still manage without much money but sometimes, partners do come out with the money and less of the others. I generally put this last in my priority list because key in making a business successful is to find the right team. You can hire (which cost money) or you can get that in your business partner. A partner with money but could not work with you well, could also be a bad partner. So, the choice is yours.
- Integrity – find someone with integrity.
The list can go on and on but generally finding a partner entails looking at some of these points, aside from the money. Over the years, I have relied heavily on my gut feeling, testing them a little and wait for sometime before I decided to suggest a business partnership.
So what happens if they have the skill set and reliability but not the integrity. But the integrity issue is because you hear rumours about them? In this case, I would suggest that you investigate this matter thoroughly. It happened to me before. I got to know this young chap whom people in the industry tend to give me a not so favourable view about this partner.
I was definitely distressed about it but I did my own investigation. I discuss this with the guy, got his answers and got the other side of the story as well and then I did my own investigation, calling out those involved in the project and seeking their feedback. The end result was a misunderstanding and a mismatch of expectations.
I decided then that there is no harm going into a partnership with him. It went quite well I must say. After sometime, I sold out my shares and made a gain. So, it was a win-win for me. So, seek out the truth, if you think that this potential partner is worth staking for.
I always believe that a partnershipis what we set out to create. It may end up good or bad. Nevertheless, it is part of our journey as entrepreneurs. We can only learn. No one is perfect. It is a journey of discovery. Sometimes things happens for a reason. We just need to find out why. Most importantly, trust yourself and make it work yourself. Just make sure that there is integrity in both partners, be comfortable with yourself, and choose a good team player.
One final piece of advice
In any partnerships – good or bad – make sure you have a partnership agreement. Not to say that we don’t trust each other but it is good to keep the partnership less complicated in case complication sets in. Documentations play a wonderful role when it comes to disagreements. So, it does keep things less complicated.