JOHANNESBURG - Securing a partner is one of the best ways to grow your business.
It allows you to tap into different networks, bring complementing strengths into the business, as well as sharing responsibilities. However, a successful partnership requires compatibility, transparency, and proper paperwork before it can reap positive results. Since bringing in a partner means sharing ownership of something you may have built from scratch, it is not a decision to be taken lightly and you need to make sure to do your due diligence.
So if you’re considering bringing a new business partner on board, these five simple tips will help to ensure you’re on the right track:
Establish the “why” as this will lead the right fit. What are the core reasons and which particular traits would add value to your business? Aim for complementing skill sets - for example, if one of you thinks big picture, and is the lead strategist, the other partner should ideally excel in operations and implementation, or someone who can buy in and add a financial injection to your business.
Consider approaching an ex-colleague or someone you’ve collaborated with in the past, Having worked with them before will mean you have valuable insight into how they do business. Approach someone who has already shown to be hardworking, reliable, and honest. Since trust is a big component of a partnership, businesses commonly team up with family and friends, so that may be a route to consider as well.
Make sure your potential candidates have an accurate understanding of your business values, and that you are on the same page when it comes to the company’s vision. Make sure you are aligned on short and long-term goals for the business. Also come to an agreement on which actionable steps you aim to follow in order to execute this vision.
Clearly articulate what roles you and your partner will each have going forward. Do not assume they know what you expect of them, as misunderstandings and wrongful assumptions can undermine even the best partnerships. Have conversations around your operations plan, the specific role each of you will play and who is responsible for what. And don’t forget to make a record of everything you agree to.
Draw up a legal partnership agreement to protect both of you from adverse effects of future changes and unwanted consequences of potential fallouts. After you have negotiated the terms, have a lawyer draw it up and make sure to review it carefully. Things to include are; duration of the partnership; investment amount or percentage each partner puts in; the authority power of each party; and provisions for dissolution of the partnership.
Ben Bierman is a managing partner at Business Partners Limited.