I first got my taste in business development when I opened my first real business (or at least tried to) — I wanted to sell all kinds of novelties by buying them cheap on Alibaba.com and selling them on high profit margins.
What I wanted to sell were religious ornaments, which are sold to vendors at $0.2-$0.5 (which means these are made at at least 20% of that price) and usually sell to the end client for anything between $3.5–$4.7 = huge profit potential.
Unfortunately, Fortuna wasn’t my lover at the time ergo it failed. What I understood was simple — finding the niche may be easy, as well as securing super cheap prices but when you understand commerce but not financing and how net 60 works, you fail.
My first taste in financing and marketing though was when I opened a financial consulting firm with a friend who knew the business. This time I have done my homework, learning everything there was to know about SEO, writing briefs and content and doing all the telemarketing talks.
We started making nice money, but I soon realized I chose the wrong partner for the business, as the most important thing there is to know about business partners is that they must be dedicated (!)
Sounds like I should be answering only to myself
Don’t get me wrong, if there is something you don’t know it’s fine to have another person go over the material; it’s ok to ask questions and it’s even better if that person can mentor you but that’s it — don’t pair yourself with the wrong person just because you don’t know how to do something; learn how to do it yourself or at least find a partner that is dedicated to the cause.
It’s ok to take different roles on yourself; it’s even admirable because you learn more by failing than by succeeding, but doing someone else’s work isn’t the point in having people partner with you.
How to pick the right partner
Ask yourself these relevant questions:
- Does this person know one’s shit?
- Does this person have a track record doing that shit?
- Does adding this person to the business benefit it necessarily?
- Do you really need a partner to begin with?
As a startup mentor, my rule of thumb is that the candidate has to answer 3 out of 4 of these questions with a “yes” for that person to be eligible.
Don’t be too tempted into partnering with people that hardly know you and want you to join them; if they cannot back their words with data, it’s a waste of time.
When you finally have that partner on board, make sure that you have the roles sorted out with each person knowing what the other person is doing and that things start running smoothly.
When you ask for a certain timetable, gantt chart, whichever — always take safety margins; if the projected time of completion is one month, it may take up to two months (especially if your partner has a full time job on board).
If by reaching the projected time slot your partner hasn’t reached a satisfactory level (not based on some force majeure act) — that person isn’t right for you.
Proceed with caution
Second rule of thumb here would be how many times this has happened. If this has happened more than twice, then you should contemplate your further work with this person as it appears it does not only hinder the business by wasting precious time on things that never come to fruition (failing is fine, not reaching the projected time slot is not), but you also find yourself micromanaging that person’s role instead of micro managing yours.
Many individuals joining in on some entrepreneurship adventure always think about vesting and cliffs instead of validating the person in question’s competence in reaching projected targets.
If it’s an ongoing project, the one joining it should be the one vetting the current partners and not the other way around — are they competent? What is the current roadmap and what has been achieved up until this point?
If you are joining in as a partner, let’s say a business oriented one you should first validate the business model to see if it is relevant for the business as well as sustainable in the future; see what the other partners are willing to invest. If you don’t trust them completely, don’t be afraid to ask for less percentage but a paid salary so you don’t waste your time on something that is doomed to fail.
Remember: people without success records cannot promise you anything as they had never achieved half of what they promised you in the first place.
Today I run my own business which is amazing in my opinion as I work with the most dedicated individual doing so.
Disclosure and closing argument
I am working with a friend about a new guide, but that friend has also been a colleague and a client, so I know the track record (as well as the success one) is there as well as I don’t hear promises of grandeur like before (the real “red lights”).
What have you encountered as an entrepreneur?