Choosing a Business Partner? Get the Best of the Best with These 5 Tips
From Monet and Renoir to Batman and Robin. Two heads are better than one – is an adage that has proved to be true in multiple circumstances. Collaboration has a way of creating a framework for fantastic results – not just in business but across various fields. You might believe that you work best alone, but a business partner can prove highly beneficial. Here’s a look at why you need a business partner and how to pick the best.
The Benefits of a Business Partner
You have someone to brainstorm with for ideas regarding marketing, growth plans, product pricing, and everything else related to your business. A business partner can also provide you with moral support.
There is a natural collaboration of skills, ideas, and knowledge that can lead to more achievements and better business results.
Share the financial burden of capital and expenses required to run the business. That could, in turn, lead to more savings than if you managed your business alone. Plus, a partnership increases your company’s borrowing power.
A business partnership has both tax and registration benefits.
Have a better work-life balance when you have someone to share the business’s everyday running.
How to Pick the Best Business Partner?
When selecting a business partner, making a wrong choice can prove to be a costly and irreversible mistake that could damage your business permanently. That is why you mustn’t choose a partner in haste.
1. Lookout for Qualities that Every Business Partner Must Possess
There are business partners, and then there are excellent business partners. The difference between the two is in the qualities that they have. An excellent business partner possesses the following attributes:
- Shares a similar passion for your business.
- Reliable so you can depend on them.
- Has the ability to manage money responsibly.
- Can consistently come up with fresh and original business ideas.
- Possesses skills that you lack.
- They are comfortable taking risks but know when to play it safe.
- Can resolve partnership conflicts without holding grudges.
- Can motivate you during setbacks and times of setback.
2. Look for Someone Willing to Undergo a Trial Period
No matter how much you trust a potential partner, you both must undergo a trial period before signing a formal partnership. A trial period allows you to get to know each other better. It will enable you both to build trust and respect for each other gradually. Most notably, working on a few projects together gives both of you a chance to decide if you will be happy working together.
3. Conduct a Background Check on Potential Partners
You owe it to your business to learn everything you can about the person you consider making a partner. A comprehensive background check is critical to protect yourself, your business, and your reputation in the marketplace.
A background check can reveal any unfavorable financial circumstances. It can also show business, personal, or investment issues that don’t meet your ethical standards.
A background check could reveal vital information, for example, if they have been involved in criminal proceedings that could prevent you from obtaining specific business licenses.
4. Look for a Partner who is Willing to Sign a Formal Partnership
While you might be tempted to enter a business partnership in good faith, that is not a good idea. A partnership agreement is an important document. It governs crucial business matters concerning how decisions are made, how disputes are to be handled, and what happens if a partner decides to leave the business. Here are some more reasons to have a formal written agreement.
- Have control over who owns the company.
- Agree on critical issues well in advance.
- Remove a non-performing or disruptive partner.
- Protect your business and your partner’s investment.
- Protect minority and majority owners.
5. Make a Good Impression
You might have found the right partner, but are they willing to enter a partnership with you? Help them form a good impression about your company – that will make their decision to get into a partnership with you easier. For example, let them know your take your business seriously by investing in proper insurance like public liability insurance.
Public liability insurance can give your business more credibility, but it also covers legal costs and compensation claims if a lawsuit is filed against your company. That can provide potential partners peace of mind – especially if yours is a business that is prone to litigation. For more details on public liability insurance, click here.
Getting a business partner on board can be one of the best financial and strategic moves you will ever make. A good partnership can add immense value to our business. Please remember that once you enter a business partnership, you share your business with someone else. Everything that you do and all the successes that you have are shared equally between partners. Give your partner credit where credit is due. Value your partnership and celebrate your accomplishments together.