The importance of knowing your value when entering a partnership [Part 1]
Entering into a small business partnership can be very exciting. You’ve (hopefully) found someone who shares your vision, works well with you and has lots of great ideas. Together you feel you have what it takes to make your small business dreams a reality.
However, before you go about investing a lot of time and money with this person, it is prudent to take a step back and look at the small business partnership from all angles, for both of your sakes.
What Makes a Strong Small Business Partnership?
A successful small business partnership is akin to a good marriage. Both require not just short-term mutual interest but long-term compatibility. You need compatible values and vision, compatible financial resources and expectations, and compatible goals.
Of course, compatibility doesn’t necessarily mean being exactly alike or even agreeing on everything. The best small business partnerships involve some give and take. But under the stress of building a new business, differences that at first seem quirky or even complementary can turn into major rifts.
Fortunately, you have the power to set your small business partnership on the path to long-term success with just one simple step: set expectations.
Set expectations for a successful small business partnership
Expectation setting with your small business partner may not be an easy conversation, but it is a vital one to have. Your goal is to clarify every conceivable aspect of your partnership relationship — both out loud and in writing — before any dotted lines are signed. You can’t presume to know your business partner’s position on anything without first discussing the matter and agreeing to a written definition.
To guide you in this process, we’ve designed a bunch of questions you and your partner should be able to answer before starting a small business partnership
It may be helpful for you and your potential small business partner to each review the questions below on your own and answer them individually before coming together to compare notes and find common ground. This can help you evaluate your individual perspective and identify areas of potential conflict before they arise. So, grab your notebook and get ready for some tough questions!
Know your motivations so you can steer your small business partnership in the same direction.
- What is your motivation for the business venture?
- What do you hope to get out of the relationship?
- Why do you want to work with a partner instead of going it alone?
- Why are you considering a small business partnership?
- What is your motivation for pursuing a small business partnership instead of going it alone?
⚠️ To answer this question effectively, think less about the particular person you’re going into business with and more about the idea of a business partner in general.
- Why is a partnership structure beneficial to your venture?
- Will the benefits of having a small business partner be worth the complications and negotiations that come with it?
- What will this potential small business partner bring to the table what you couldn’t achieve on your own?
⚠️ Remember that the fear of going it alone isn’t a good enough reason to form a small business partnership. Make sure that choosing this business structure fits with your long-term interest.
- How do your prospective small business partner’s talents complement your own?
- How does partnering together make your business venture more successful than if you were to go it alone?
⚠️ A healthy small business partnership requires a level of respect that comes only from the understanding that you’re both bringing critical talents and resources to the table.
- What is your vision for the business venture?
- Are you seeking to build a fast-growing startup or a small local business that you’ll hold onto for years?
- Are you building your business with a future sale in mind?
- What are your expectations for your business’s size and annual revenue?
⚠️ Particularly if you are considering going into business with a good friend or family member, evaluate these matters as objectively as possible.
Now let’s make a pause. These are not easy questions. They require time and honesty, so take your time to answer them. In the second part of our three-article series, we are going to give you the questions and recommendations that lead to clear vision. Often partners fail at having the same expectations about where they want their business to be in two, five, ten years and this costs to them so much. Stay tuned to learn how to prevent this.
Meantime, take a look at our company and work and get inspired (https://www.globalizeit.tech/)... and if you want to work together with us, contact us at hello@globalizeit.tech
