n90) Create your own Business: Finding The Right Business Partner

 Create your own Business: Finding The Right Business Partner

According to recent studies, two-thirds of all businesses fail. This means that a business has less than a 1 in 3 chance of succeeding.

So, how can you make sure that your business is one of the 33% who succeed?

The answer is by choosing the “right” business partner.

A Complementary Skill Set

The first place to start when looking for a good partner is to assess your own strengths and weaknesses. Once you have done that, you can look for a partner who exhibits traits that complement your own skill set. This is something that a lot of people know they should look for but don’t. However, it is arguably the most important of all things to look for in a business partner.

Often, people pick partners who are clones of themselves. Other times, they pick people who are so different from themselves that they are in constant conflict. Find someone who complements your skills, not contrasts with them.

If you are not good at a particular aspect of doing business, find a partner who is. Someone with a different skill set can add something to your business that may ignite something new and brings much more success than either of you could have achieved alone.

Shared Goals and Values

Make sure that the person whom you are considering as a business partner has business goals that are aligned with yours. In other words, you should both want to create the same thing.

This goes beyond whether you both want to make money––it means having the same idea of what the company should look like down the road. It is better to find out upfront that you don’t have the same business goals than when you have signed an agreement and have all of your equity on the line.

Furthermore, you may want the same thing, but have different ideas about how to get it. If the person values fast profits over quality while you value quality and customer service over profits, you may eventually have a tug-of-war over which route to take to achieve your shared business goals.

Easy to Talk To

You need to be able to discuss with this person everything related to the business. Otherwise, issues between the two of you can begin to fester with time, and those that could have been worked out easily will become even more difficult to resolve. Resentment will then set in and a whole downward spiral will ensue just because you wanted to avoid discussing the issue with your business partner.

This doesn't mean that you need to find someone who agrees with everything you say, but you need to feel relatively sure that you will be able to:

discuss any differences you have with the person,

agree on a resolution, and

come out of it shaking hands and moving forward.

Trustworthiness

A good business partner must be someone whom you can trust. Everyone has their own quirks and individual ways to deal with stress, success, and failure, but if you can inherently trust your business partner, you will have a better chance of succeeding as partners.

Also, when you know that your partner can and will fulfill his or her roles within the partnership, you will be able to focus better on your own. If you don't have faith in your partner's ability to do what they need to do, you will be distracted and will not be as productive as you can be.

Knowledge of Your Industry

Would you hire an auto mechanic to run a bank? It is extremely important that your business partner understands the dynamic of the industry that your business is involved in.

That doesn’t necessarily mean that they must have a deep understanding of the business from the onset—they can learn more by working with you—but they need to know enough that their area of expertise can have a positive effect on your business.

Experienced

Does this person have the experience to help your business grow?

Have they been through the ups and downs of running a business and know what it takes to be successful?

How will they respond to employees who have lost faith in themselves, vendors who are screaming for payment, and clients who are reconsidering the business they give to your company?

Knowing how to deal with adverse circumstances can be the difference between success and failure, and when a business owner has no experience dealing with the many challenges that a business can face, they are at a huge disadvantage.

You may not need a business partner who has experience raising capital, managing a sales force, and creating a marketing plan. In fact, it will be difficult to find someone who has proven above-average results in all areas.

If your main concern is consolidating debt and reorganizing bank loans, then you may want a partner who is experienced in business finance. Similarly, if you intend to pursue government contracts or focus on a particular niche market, you will probably want a partner who has experience doing business in these areas.

Able to Bring New Business

This goes back to the previous question of whether the person understands and has worked in your company’s industry. Business partners may bring with them valuable contacts that can lead to sales. For instance, if you have just come up with a new and innovative business solution, your new partner may bring contacts to company heads who will jump at the idea. Your new partner can then use their previous relationships with these company leaders to secure new business contracts for your company.

Financially Stable

Whether you operate as an LLC or general partnership, you need a business partner who is financially stable. Money is the number one reason why most businesses fail. It is also one of the most common points of contention between business owners.

If a person is bad at managing their own personal finances, this is a good indicator that they will be bad at managing your business finances as well. Moreover, if a person has a tremendous amount of financial difficulties, they will not be able to invest much in terms of time, money, or emotions when helping you grow your business.

Able and Willing to Invest

Not every potential partner will have the personal resources to invest as much into the company as you have, but they should be willing to invest as much as they can afford. When lenders and venture capitalists see that your partner is also substantially invested in your company, it gives them comfort and makes them more willing to invest their money. However, when you are in need of money and have a business partner who can afford to invest more money but won’t, it sends a negative message to other potential investors.

what do you think of our video?

Let Me Know in the Comment Section Below

Before you go please hit the like button and subscribe to my channel.

Thanks for watching.