Some of the most successful ventures in history had an unbreakable business partnership. Think of the Wright brothers or Ben & Jerry. But finding a reliable business partner can be tough. Asking these five vital questions will be helpful in teaching you how to choose a business partner.
Choosing a business partner: 5 questions you must ask
Do they share your vision?
It’s normal for business partners to disagree about the best course for your business. Yet, business partners who constantly butt heads can put the business in dire straits.
Ask your potential business partner about what they hope the business will achieve. Ask how they will achieve it and what the core business values should be. From there, determine if your strategic visions align.
Do they have a selling point?
Businesses need a unique selling point to succeed in a competitive landscape. Similarly, your business partner should offer unique talents that complement yours. Ideally, these skills fill a gap in your own skill set.
If you’re great at producing artwork for your design business but not great at marketing, choose a partner that’s good at marketing.
Are they a consensus builder?
Your business partner should be able to freely raise his concerns about the potential downsides to any decision. But persistent “negative nannies” can waste time and resources without adding value.
The goal of disagreements should be to arrive closer to a consensus that marries both of your opinions. It’s wise to choose a business partner who is willing to get behind ideas that are the best for the business, not just behind their own ideas.
Are they a better friend than a professional partner?
Choosing your uncle or college buddy as your business partner sounds like a blast. But it can quickly lead to disaster. Not only do you risk the business partnership ending but it could also spell doom for an important personal relationship.
Before choosing a friend or relative, vet them like you would a stranger. What are their abilities, reliability and fortitude as a business partner? You should also know when keeping a relationship personal is as far as it should go.
What is the exit strategy should the partnership fail?
Few can imagine—and even fewer want to imagine—their business partnership dissolving. But, it can happen whether it’s a sale, one person leaving or the business going under.
That’s why it’s vital to put in an exit strategy at the outset of the relationship. If you don’t want to handle this yourself, there are plenty of lawyers that can streamline this process.
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MileIQ’s blog does not constitute professional tax advice. You should contact your own tax professional to discuss your situation.