Being a business founder can be incredibly lonely. If having all decisions resting on your shoulders sounds like a lot, you might want to consider a business partnership instead. Finding a business partner can be an excellent way to bring complementary skill sets together to divide and conquer as you grow and scale. On the flip side, if a partnership sours the fallout can be detrimental to your business.
I found my business partner more than 16 years ago and we’ve co-founded more than four businesses together. Our long-term goals were aligned and we both preferred the idea of sharing the journey to venturing out alone and for us this has been hugely successful.
As a member of Entrepreneurs’ Organisation (EO), a global peer-to-peer community of successful entrepreneurs, I’ve heard countless stories of both brilliant and terrible partnerships. As EO is all about experience sharing, you discover what has and hasn’t worked in different partnerships and I’ve found those experiences helped me to forge a better relationship with my own partners in business.
Here are five things you need to consider before entering into a business partnership:
Any relationship is built on a foundation of trust. A business partnership is no different. Honesty and transparency are key elements for success in a partnership and communication. One way to add a layer of protection is to clearly document and outline different roles and responsibilities from the outset to avoid later confusion or miscommunication.
2. Goal alignment
Business partners need to be aligned in their long-term view and objectives for the business, then, be able to split the responsibilities while still supporting each other along the way. Having a set of complementary skills really helps. My business partner and I actually have quite similar skill sets but very different personalities and approaches -one of us is the visionary while the other one is the integrator – so that works well.
3. What long-term value does each partner bring?
While some people may have skills that can bring a short-term injection into a business, that doesn’t mean they are necessarily a good fit as a partner. Your partner really needs to be someone who can support the business in the long term. Outsource the short-term skills you require and find a partner with a long-term vision, strategy and the ability to grow and scale that business to where you see it heading.
4. Will third parties involved cause friction?
Having a conversation before you enter into a partnership about how it may evolve and change, and how it might look to bring others on board is an important conversation to have at the beginning. If you are going to bring others into the business, how might this work and how will each parties roles and responsibilities adapt?
5. Do your communication styles match?
With a partnership comes a loss of autonomy and increased chance of disagreement or war of the egos. Being able to communicate well with a partner is key. If you’re looking at entering a partnership with family or friends – there can be added challenges with communication.
On the one occasion I had a partnership not work out, it was due to misalignment of values and long-term goals. The partnership was based on covering a short term gap rather than a long term objective. Once you have a clear vision, mission and values, you can confidently find a partner that can support you in bringing this to life.
Damian Blumenkranc, Communications Chair, Entrepreneurs’ Organisation Melbourne and co-Founder of Creativa, Attento, and Just Click Videos