It’s hard, if not impossible, for a business owner to do everything themselves. “We all need somebody to lean on,” said Bill Withers wisely.
Running a business involves spinning many plates. Involving others in your business can prevent those plates from smashing. But how do you ensure it’s a successful partnership? Here, we’ll share our expert insights to help you find a good business partner.
What Role Does a Business Partner Play?
Think of a business partner as an ally; a collaborator to team up with and drive your business forward. By collaborating with a like-minded business owner with skills that complement your own, you can achieve more together than you ever could apart.
Whilst that all sounds wonderfully positive, remember that a bad business partner will affect your professional reputation as well as their own. So it’s important to do your due diligence before making any agreement.
There are varying types of partnership agreement too.
Limited company – both partners become shareholders. This can be a two person limited company with both partners as directors.
General business partnership – both partners are effectively self-employed sole traders with an agreed share of the profits and the liability.
Limited liability partnership (LLP) – this is common amongst firms of solicitors, accountants and estate agents for example. All partners have a say in the running of the business. Members agree on each partner’s liability and document it in a partnership agreement.
Why is it Important To Have a Business Partner?
The right business partner can work with you to take your business to the next level. They’ll bring different skills and knowledge to the table, helping with decision-making. As the old adage goes, ‘two heads are better than one.’
It could be that you’re a whizz at product development with a great head for finance. But maybe you’d benefit from partnering with a marketing expert who can promote your products and drive more sales?
Think of the incredible creative partnership between author Roald Dahl and illustrator Quentin Blake. The words are brought to life by the incredible pictures, and vice versa, making the books more impactful than they would have been without that pairing of talent.
Then there’s the successful plant-based food company, Deliciously Ella. Whilst Ella is the expert in the kitchen and loves to create new recipes as well as engaging content, her husband Matthew drives the business forward. They share the same vision and passion for their brand and products, but fulfil different roles within the business.
What are 5 Characteristics of a Successful Business Partnership?
1. Shared Vision
You need to agree on the same outcome so that you’re working together to achieve a goal. And you need to have a similar mindset about how to get there. If you prioritise sustainability and minimal environmental impact, yet your business partner puts fast profits above all else, a clash is inevitable. It’s important to be upfront about your vision and values, and to share a passion for the business idea.
2. Complementary Skillset
You’re not looking for a clone of yourself, you need somebody who has strengths in areas that you don’t. Say you’re great at creative thinking, you may benefit from a partner with project management and planning skills. But you still need to complement, rather than contrast, with each other.
3. Trustworthiness
Strong relationships are built on trust. You have to feel confident that your business partner will uphold their side of the bargain and fulfil their role to the best of their ability. If you’re having to check up on them, you won’t be as productive in your aspects of the business.
4. Expertise
They need to understand your industry and bring relevant experience to the business partnership. You want them to have useful contacts and professional knowledge that can enhance and improve your business.
5. Compatibility
You’ll be spending a lot of time together, sometimes during stressful periods, so you need to get along day to day. It’s important that you can communicate freely and directly together. You don’t have to agree on everything, it’s beneficial if you do bring differing viewpoints at times, but you do need to resolve conflict satisfactorily.
What Skills Do You Need To Be a Successful Business Partner?
If you’re looking at bringing in a new partner to your own business, you need to be clear about the reasons and objectives.
Networking – if you want your business partner to bring in new business, they need to have plenty of relevant contacts and to be an effective networker.
Resilience – business partners need to weather various storms and remain strong. You need to keep each other motivated, focussed and supportive.
Open-mind – whilst you want a good partner to bring their own ideas and opinions, you also need them to actively listen to others and be open to suggestions.
Entrepreneurship – you want someone with a wealth of business experience that includes good financial management. Money is often behind partnership failures and disputes.
How to Set Up a Business Partnership
Be really clear from the outset about the details of your new business partnership. Draw up a partnership agreement outlining roles, responsibilities, business structure, finances like shared profits, and exit strategies. Then you’ll need a smart business plan.
If you’re one person in charge of a small business, make sure you’re ready to share ownership of your ‘baby’. Business partners can be co-founders in a startup, shared owners of an existing business or collaborators in a joint venture. Remember, a small business doesn’t need many partners and will do better with two or three in most instances.
You need to conduct your due diligence about your potential business partner before bringing them into the fold of your organisation. Talk to people with whom they have business relationships, do your research (LinkedIn is a good starting point) and make sure you’re confident and comfortable with that person.
Conclusion
Like any long-lasting relationship, you need to be compatible and well-suited to a potential business partner. That means doing your due diligence, spending time together assessing their outlook and ensuring that they’re bringing the required expertise and benefits to your business. And take your time – you need to make sure you’ve found the right one before you take the leap.
How to find a strategic business partner that fits. Find more advice like this on our blog.
