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Choose a Business Partner Wisely

Things to Keep In Mind when Choosing a Business Partner

Author: Zach Dilworth Sunday September 29, 2019
Disclaimer: By reading this article, you are agreeing to the terms of this disclaimer.

As a side gig entrepreneur, life gets busy when you’re trying to balance your full-time gig alongside your side gig. Instead of trying to manage everything on your own, partnering up seems to be the most likely next step. It’s not that you can’t do it alone, but perhaps you need some support or perhaps someone to keep you motivated.

Before calling your best friend, consider someone with the following:

A complementary skillset or personality traits

  • If you’re not good with technology, it’s good to get someone who can step in and support you with technical expertise. This is especially important when it comes to introverts and extroverts. For an introvert, networking can be a daunting task, but with an extrovert on your team, it could be a small ask for him or her.

Slightly offsetting availability schedule

  • As a side gig entrepreneur, time is of the essence. If you’re trying to manage your business on top of your 9 to 5, it could be helpful to get a partner who’s availability fills in some of your gaps.

Prior entrepreneurial experience

  • Those with entrepreneurial experience have a gold mine of experience that can directly add value to your business even if it’s a completely different industry. Nothing compares to the school of hard knocks.

Relevant business network

  • A great option for a business partner is to connect with someone from the industry you’re targeting. A great business network takes years to build and someone with connections enables you to get through the door with instant credibility.

Shared values & aligned vision

  • It’s important to know that your business partner is working towards the same goals you have for the company. If you’re not quite seeing eye to eye, he or she may have other plans which could harm the business down the road.

Someone without personal distractions “baggage”

  • Entrepreneurship is stressful enough, you don’t need any extra drama to distract you from your goals. If you know the person has baggage, but they’re your friend, you tend to look past it. This is a mistake. When your partner’s mind is elsewhere, it’s not adding value to your business.

Credibility in your industry

  • Many enterprises acquire businesses to immediately gain entry into a new market. In business, a portfolio of success in the target industry allows for easy entry to that market. Having a business partner with that credibility will save years of efforts.

Financial stability

  • If your business partner is not financially stable, he or she may focus on quick wins to get ahead instead of focusing on the long term plan. Someone with financial stability can survive for the first few months when income is tight. Additionally, a wealthy partner may be willing to contribute to the business with financial injections.

Good Ethics

  • Values and ethics are important traits to look for in a business partner. If you’re an ethical person with good values, you probably wouldn’t be okay with your business partner getting shady deals. It may damage your business’ reputation.

Reliability

  • In my opinion, this is the most important trait to look for in a business partner. Get someone who doesn’t just show up; get some who has a track record of ensuring that projects get finished on time even if they have to work extra long hours to get it done. Entrepreneurship is not for the weak – get someone one your team who will do whatever it takes to make sure your side gig succeeds.

Ability to challenge you

  • A great partner will challenge the status quo or unproven ideas. Even if you share the same vision for the company, collaboration and challenging each other’s ideas can prevent costly mistakes. Nothing is worse than a partner who agrees with everything you say – that’s not a partner.

Passion & Self-motivation

  • An obsession with your business and a true passion for success will trump most of the above qualities. Inspiration comes and goes, but you can’t teach passion. True passion is rare.

Business Partner Expectations

When you finally decide on choosing a business partner or partners, be sure to follow the steps below BEFORE his/her first day.

  • Set expectations

    • Ensure your partner knows exactly what you expect from him or her. It’s not enough to show up for X hours per day and perform one task – that’s an employee, not a partner. Partners should be open to contributing in any way to support the business.
  • Signed Contract

    • When it comes to money, it’s better to avoid any misunderstandings upfront. It’s not that you don’t have good intentions, this takes all emotion out. When your partner fails to live up to expectations, pull out the contract before things get messy. Your partner needs to know what he signed up for. It’s not enough to pinky swear.
  • Job Description

    • Back to setting expectations, your partner needs to understand what his or her role is in the newly developed organization. He or she may have some contributions to this document so be open to their feedback.
  • Breakup Plan

    • Your business partner is going to feel a lot like having a spouse. Someone who is on your ass for every mistake you make and there to congratulate you on every success. It’s going to last a long time, so it’s important to protect your business in the case that it doesn’t. It’s not a prenup, it’s an agreement that if you break it, this is how your partner will be compensated.
  • Exit Strategy

    • Different from a breakup plan, an exit strategy focuses on the plans to exit the business in the future perhaps through sale or spin-offs. It could also include a contingency plan for shutting down the business should things not go as well as expected.

Although these tips may seem a bit scary, choosing a business partner will have a direct positive or negative effect on your side gig business. A great way to objectively choose a business partner would be to place all of the traits above in an excel sheet with different weights associated with each. By producing a scorecard for each potential partner, you take emotion out of the decision and make a much more educated decision.