Boss Lady

Getting into bed in business – choosing the business partner who is best for you

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So, you’ve come this far. You’ve developed your idea, and all of your hopes and dreams have been put down on paper in the form of a business plan. Or maybe you’ve gone further and have a successful, albeit, small business. The only problem is that you have gone as far as you can by yourself, and now you need to consider bringing in a business partner. The first thing you need to consider is the why? Working out the why, will assist you in developing the profile of who you are looking for and how they fit into your business. This is not something to be taken lightly, and you will be best served by taking the time to get the right fit. If you don’t, then at best this could be an expensive learning experience and at worst, cause irreversible damage to your brand.

Why?

[tweet_quote]What is motivating you to bring in outside help?[/tweet_quote] Is it financial, do you need to raise capital to expand and take the next step? Is it a lack of time, are you just honestly stretched so thin that you are one flu season away from it all crashing down? Is it a question of expertise, you would like to bring in someone with a different skill set so that you can provide your clients or customers with a more tailored offering. Depending on the scenario, you might consider a silent partner, a partner who has a say in the future direction of the business, or an employee.

Who?

In some ways, [tweet_quote]choosing a business partner is similar to dating[/tweet_quote]. You need to be ready to give up some control, be willing to compromise and to step up and establish boundaries. These are traits that you should also look for in your potential business partner. You need to look at the character fit of the person, not just their bank balance. Do they believe in the image of the business? Can you have frank discussions with them? What skill set are they bringing to your business? Do they complement yours?

One of the biggest mistakes that can be made is to bring in someone who is the same as you.

For example, you may be a big picture person with a vision of where you are going, you just need to free up the time to make it happen. Bringing in another big picture person could be the worst thing to do. Sure, you both can wax eloquent over that second glass of wine about how great your business is at a networking event, but you would probably be better served by having a business partner who is happy to let you do your promoting and stays back at the office organising inventory in all their detail orientated, introverted glory. Or perhaps it’s the opposite, and you need someone out there, hitting the pavement and bringing in leads. You need to know your strengths and find someone who can fill in your weaknesses.

How?

Another point to consider is risk management. Do your research, speak to previous employers, check to make sure that there is no criminal history lurking, maybe ask for a credit report. It is common practice in many industries to do a police check, so don’t be shy. If they are going to be buying into the business then you want to know that they can handle their finances. The last thing that you want is to find out is that your business partner is an undischarged bankrupt or hasn’t paid their taxes for the last five years. How somebody treats their personal financial responsibilities can be a bellwether for how they will treat the finances of your business. Be picky.

Which leads to my last suggestion. Make it legal and do it properly. Consult your trusted legal and financial professionals and set the business up using the right entities and have the right paperwork in place. Put a contract in place with a 12 month trial period. That way, if you find that you just cannot stand the way they eat at their desk, or they don’t like the direction you want to go in, you can part ways with minimal fuss. This is a business arrangement, you don’t necessarily need to be friends, but you both need to know where you stand and you need to be able to work together. This is, arguably, the biggest decision you will make for your business so do it once, and do it right.

 

About Erin Wright

Erin Wright is a financial planner based in Toowoomba, Australia with ten years’ experience in the industry. Erin is passionate about assisting and educating her clients about the practical considerations of their finances throughout their various life stages, as well as achieving their goals. Her clientele range from young professionals to small business owners, retirees and everything in between. Erin can be found at Achieveit Financial Planning and regularly blogs through her LinkedIn profile .

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