Partnering in business — friend or foe?
by TRISOFT team
All partnerships are challenging. Take marriage for instance — if you don’t know the other person very well, if you don’t share the same dreams and expectations about the future, if you don’t communicate properly and don’t respect each other, it often ends in acrimony and legal proceedings. So it’s mandatory to learn as much as possible about a future partner, as well as weigh carefully the whole idea, before signing on a dotted line. Likewise in business.
Here are some questions to ask before deciding if partnering in business is a good idea:
1. What I am looking for in a business partner?
The trick is to find someone who complements your skills and abilities, so that together you make a whole. They should bring something different than you, in terms of added value, to the business. Let’s say, if you’re not much of a people person, choose someone who can talk in public and has many connections. Or if you are very organized and focused on the details, you should look for a partner who’s more creative. Or if you have the financial resources to invest, you should find a partner with greater access to the market.
All in all, it’s a better idea to find ‘your business half’, although going with someone similar to you may feel more comfortable at the first glance.
2. What is your potential partner’s financial status?
Before starting a business collaboration with someone, you should get an idea on the way they have dealt in the past and are dealing in the present with their financial commitments. It doesn’t necessarily mean going through their personal affairs, but you should have access to their past possible issues in this area, if they have unpaid commitments or any other obligations that could jeopardize your partnership.
Their attitude and perspective on the matter is also important, so watch out for red flags.
3. Do I trust them?
Obviously, the idea is to only go into business with people you trust. It’s easier if you have known them for a while before coming up with the partnership idea. However, the more often situation is that you meet them at the interview, so what you should do is conduct thorough background checks and calling personal references in order to dig out what could be hidden. This is by far the most important way to protect yourself when entering a partnership.
4. What are their expectations on the actual involvement in the business?
This one refers specifically to the amount of time invested in the business. And while it is not mandatory for both partners to spend as much time working, it is beneficial to be on the same page regarding the other’s time commitment. This way frustrations and judgement can be avoided. The best idea would be to agree together on each project the number of hours you will put into the venture.
5. Is their commitment as strong as yours?
One thing is for sure when sharing a business: no matter the field of work, whether it’s a florist shop or an IT company, the commitment of your business partner has to equal yours. And vice versa. Starting a partnership with someone (especially if they are a friend) is a time of fun and excitement, but if they are not as involved as you are, the enthusiasm may rapidly drain and leave behind an empty shell, which is not only damaging to the relationship, but also to your company and your reputation.
6. How would he or she handle a tough situation?
Another good question would concern their resistance to difficult or challenging situations. It is essential to get an idea of what your potential business partner will do if faced with tough situations. The easiest way to learn this is look at what they have done in the past in their business ventures — or instance, when in financial difficulties, did they pay their taxes?, did they pay their employees? and so on. This will also help you see what kind of a business ethic your partner has.
7. What is their reputation like?
As we said in the beginning, a business partnership is somehow like a marriage. And here is another resemblance — for both there should be a courtship process so that you can verify that the person aspiring to make partners is really who they say they are. That’s because many people seem great at first, but appearances can be deceiving. It might be that they are really good at making a first impression, but what follows is not all that good. So what you can do is talk to former employers and colleagues of theirs, check if their connections are real and their reputation is positive.
8. Are they willing to put everything in writing?
Whatever the prior relationship between two business associates, there should always be a written contract, signed by the two parties. That’s because shaking on it it’s nice, but doesn’t cover all possible issues that may arise, maybe even not through fault of any of the partners. The contract should contain what is expected of each and the consequences if those expectations are not met. It’s easy — if it’s in written, there’s no arguing it. Or at least in most cases.
9. Have you talked about the worse case scenarios?
When you start a business with someone, it may look like you have it all under control and nothing could go wrong — you have the resources, the plan, the goals, you can handle anything. And while this is healthy thinking for any business, it’s good to have a partner that is willing to discuss and take into consideration less fortunate outcomes too. If you are able to talk about the worse-case scenarios, you will most probably be able to address potential issues before they become issues.
And now a bonus question….
10. What happens if you can’t work it out?
Well, this is connected to the last question we have just discussed — being wise enough to think about all possible situations, not just those that are good for everyone. If you have a partner that’s on the same page as you are regarding this aspect, you have great chances to succeed with your business. And if it doesn’t work, you can always start over. Fresh!
Do I really need a partner?
So it is pretty clear that partnering is not a low-cost, quick fix or risk-free option. The cost of partnering can be high — you need time to explore, establish and manage the relationship. So it is wise to consider the costs before opting for this kind of arrangement. The good part is that having a valuable partner enriches your prospects, as your skills and contributions are brought together and linked by a common vision in order to achieve your company’s goals.
In the end, it all comes down to this question — do I really need a partner? Because there are other ways, you know? You can hire an administrator or a consultant. Sometimes all a business needs is have people show of for work, do their job well and then go home. Without being involved in the company’s decision, paperwork and so on.
On the other hand, if you are a startup company and you don’t have amazing financial resources, taking up a stronger financial partner sounds like a good idea. It’s all about analyzing the situation carefully and giving someone a stake in the company only if that’s what would benefit it most.
At TRISOFT, advice always comes from experience. So, having had our fair share, we can say partnering in business can indeed be tricky. You can get involved with people that are deceiving (con men in disguise!) and not realize it until the damage is done. Therefore, our recommendation is to first try it out in-house, maybe relying on your own team’s resources. Also, a group of consultants, hired for a specific period of time, should provide enough for you to get up and running. Thus, you will be able to comfortably work, share and evolve in your own terms, without entering a relationship with a mendacious partner who can make you feel trapped in a dead-end situation.