How To Find The Right Business Partner - April 12, 2017
Have you ever gone into business with someone? It can be a scary proposition. Either the partnership can be very successful, or it can be very costly—both emotionally and financially.
I once worked for a medium-sized private company owned by two business partners. These partners had worked together in sales before starting their business. They began with nothing, invested back in the business as the could and grew slowly but steadily into a multi-million-dollar venture with more than 50 employees. Eventually they were able to sell it and retire.
What made their relationship work was that they both carved out their roles. One owner was the front-facing partner, interacting with the customers and employees on a daily basis. The other partner focused on operations, systems and the foundational structure of the business.
In today's issue of Promotional Consultant Today, we share these insights from Elinor Robin, a mediator who's doctorate dissertation focused on the key factors of successful business partner relationships.
Trust and likeability. Trust is the foundation to any successful relationship. Without it, a partnership can be doomed. As Robin notes, true trust builds over time. So, a sense of increasing trust means you are on the right path.
Shared values. Robin says that successful partners generally agree on standards regarding what is desirable, undesirable, good and bad. These values guide their actions, judgments and choices. Your values shape your personal and professional identities so they typically carry a strong emotional charge. When partners' values align, they are more likely to make congruent decisions and remain united.
In many cases, the owners of my business had the same agreement that they would never take on a new venture or invest in something new for the business unless they could either pay for it up front or know the return on investment.
Complementary skill sets. Successful partners will possess different but complementary skills. One partner might be more outgoing and better with customers; the other might be more focused on the employees. The broader the partners' range of skills, the clearer the division of their labor (and power) can be. Just like a personal relationship, those in a business relationship have to define their roles, but those should be based on skills that support each other and fill each other's weaknesses.
Ability to give and take. Any successful relationship is about compromise. We all know that there's really no such thing as a 50-50 partnership. Typically, at times, one person gives more and then the other person gives more. But, Robin says, in successful partnerships, each partner believes their rewards are equal or exceed their contributions. Each partner should have that sense of equity, knowing that some days he or she is giving and some days getting.
The shared goal of growth. To grow a business, you have to experience change. Frankly, some people embrace change and others don't. Successful partners have a shared vision and they know the changes that are required to achieve specific milestones to reach these goals. A change might be something as drastic as entering a new product market or investing in a system that can automate your business. It might mean shutting down some outside sales teams or investing in new hires. Change can be scary but uncomfortableness needs to take place for growth to happen. You and your partner both need to feel comfortable with what it takes to grow.
Agree on the end. Like the owners of my previous company, it's important to agree on your personal goals for the business and to agree on an exit strategy. As Robin states, it's often said that a graceful exit is proof of a successful venture. Without an exit strategy in place partners can be faced with making crucial decisions at a time when they are least levelheaded. An exit strategy is a shared sense of when and how an alliance will end. A written exit strategy should be included in every business plan. However, even though planning for the end is a critical aspect of business ownership, it is one of the most neglected. An exit plan should answer four questions: what events might trigger an end to the partnership? How will the business be valued at the end? Which options for future ownership are acceptable? And what post-alliance ties and restrictions, such as non-compete clauses, need to be included.
Source: Elinor Robin, PhD is a mediator and mediation trainer specializing in workplace and family conflict management.