May 25, 2011
OPEN Forum Message
Affordably Build Your Brand
FedEx Global Brand Management Director Monica Skipper shares a cost-effective way to build a bigger brand for your small business.
Learn more
Choosing a business partner is like choosing a spouse. From the first handshake, you will spend almost every waking moment together. It is a major decision.
So how do you know if a person is right for you and your business?
Here are a few key questions to ask yourself before signing on the dotted line.
Why do I want a partner?
This one may seem obvious, but really think about it. Do you have a problem that needs solving? Do you want someone else’s sales contacts? Do you want to distribute the financial burden of the company? Do you want to share the workload?
“Define exactly what you are looking for; this is a long-term commitment so establish your goals on the outset,” recommends Jennifer Crews, managing partner at Pearl Advisory Partners, a general management consultancy based in Asbury Park, New Jersey.
Does the person share my passion and work ethic?
You want to start a business, so you tell a friend about it and, all of a sudden, they want in. You aren’t sure how you’d work together, but you’ve known your buddy a long time, so you think…why not?
Step on the brakes.
“Launching a business takes a 25-hour per day time commitment, so you want to make sure to partner with someone who has the same amount of vigor,” says Jon Picoult, founder and principal of Watermark Consulting, a business advisory firm based in Simsbury, Connecticut.
A one-time conversation will not tell you if your potential partner has what it takes. Neither will five conversations. To figure it out, Pat Lynch, Ph.D., president of Business Alignment Strategies, a management consultancy in Long Beach, California, recommends putting the person to the test.
“Try a subcontracting relationship first to figure out if you’re compatible; it will help you answer chemistry questions and see if they will really deliver,” she says.
What’s in it for my clients?
Partnerships work best when parties offer complementing skill sets.
“Ask yourself if they are bringing a strength that you don’t already have, and how having them around will help your clients be better off,” Lynch says.
What will be our specific roles?
Starting a business can be exciting, and you and your potential partner may find yourself spitballing ideas a mile a minute. While this process can be fun, establishing clear definitions of operational roles is essential to a congenial working environment.
“You need to have a frank conversation about your roles in the business, what each other’s domains will be and how you will work together—basically your rules of engagement,” Crews says.
Can we coexist in close quarters?
Back to the marriage analogy, you don’t want to start a partnership with someone whose idiosyncrasies may drive you to drink.
“You want to make sure your personalities mesh and that you can enjoy working with them for extended periods of time,” Picoult says.
Physical proximity is also important. If you find yourself choosing between two people who have similar personalities and skill sets but one lives close and the other far, Picoult advises choosing the one in your backyard.
“Studies have been done on corporate mergers and acquisitions, and one of the key predictors of success is the proximity of companies—it insures more frequent, live interaction and the developing of trust and familiarity,” he adds.
Do we agree on an exit strategy?
Very few entrepreneurs want to work for the rest of their lives, so it is important to agree on the end even before the beginning.
“Talk about your plans for the business; if you want to sell it someday, it is important your partner has a similar plan,” Crews says, adding that waiting to have such a conversation can result in ugliness. “It is like getting married before you talk about having kids—no good.”
Additional resources on the topic:
Never Fly Solo: Lead with Courage, Build Trusting Partnerships, and Reach New Heights in Business, by Robert “Waldo” Waldman
The Partnership Charter: How To Start Out Right With Your New Business Partnership (or Fix The One You're In), By David Gage
Check your balance, review recent transactions and pay your bill on the go.
MSNBC Your Business 9 months ago
Find out about leveraging partnerships for expansion in the Business Answers segment of MSNBC's YOUR BUSINESS:http://www.openforum.com/idea-hub/topics/managing/video/business-answers-leveraging-partnerships-attracting-investors