If you are considering your own business, but you feel you don’t have all the skills required to run that business, perhaps you should think about a partnership. Getting a partner for your business might be as close as your co-worker who has the same interest, or it might require placing an ad in a trade journal, talking to other people in the industry or formally searching through a business organization.
If you already own your own small business and you are struggling to get it all done, or you feel you are letting certain things slip or doing certain tasks poorly, you may also want to consider a partner or a partnership.
The other reason you might consider a partnership for your small business, is to get an influx of cash for investment and business growth. In other words, your business may be doing just fine with you at the helm, and your only reason to consider a partnership may be to have more resources with which to grow.
Whatever your reasons for wanting a partnership, there are a few things to consider before you sign on the dotted line to get a partner on board:
- What gaps do you need filled in your business and management structure? Can one person fill all the skills, investment and management gaps or should you be looking for a larger partnership to satisfy all of your needs?
- Will the person or company with whom you partner be investing cash in your business, or do they have a network of contacts or some other benefit that will bring you more money for growth or more customers for income?
- Will you ask your new partner to take risk along with you? Do you have existing loans and collateral pledged to banks or investors? Will your partner be equally responsible for these, or just for new loans and obligations you may take on after your partner joins you in the business?
- Will one of you have more share or interest in the company, and thereby be the major shareholder with more decision-making power?
- Does your new partner have written obligations in the form of a contract? You should always seal your partnership with a legal contract that binds and describes the obligations of all parties.
- Does your new partner have complimentary skills or knowledge or are you merely duplicating your own skills and knowledge as back up? Is this arrangement the one that best suits your business need?
- Who will hire and fire employees? Who will make decisions about new products and services? Are all decisions equally shared? If you have a specialty in which you want sole decision-making responsibility, have you articulated that in your contract?
- Have you spoken to your business lawyer and/or accountant about this potential partnership? What concerns do they have?
- Have you answered all of the questions your investors and/or bankers may have about the potential partnership issues that may arise?
There are many more questions you might ask before signing a partnership agreement. Not the least of these questions is the very real emotional and moral commitment your partner may or may not have to your business.
Remember that your business is your passion. Be sure that it is also your partner’s passion and that he or she is willing to stick with it during good times and bad times, and to work as hard as you will work to make the business a success. If you have any doubt of this commitment, don’t sign the contract!
Choosing a Home Business Partner
When starting a home business, choosing the right partner can mean the difference between success and failure. So if you’re thinking of forming a partnership for your home business, you want to consider a few things before signing any sort of partnership agreement.
Compatibility. You don’t have to be best friends with someone to be in business together. In fact, it’s probably better if you aren’t. Being too personally involved with your partner can keep you from challenging the person or from saying anything they might take as criticism. Still, you want to feel comfortable with the person you select a partner in your business and know they’re someone you will enjoy being around. So ensure the person you’re thinking of bringing in as a partner is someone you respect and can be yourself with.
Values. Your partner should share your values when it comes to a home business. This doesn’t mean you have to have the same working styles, but your partner should place the same importance on financial and ethical issues involved with your business. Having the same values means your partnership has a much better chance of being successful and productive.
Stability. The partner you want for your home business will have a stable personal life. Beware of people who are always experiencing a drama of some kind. Not only do people like this wear you out over a long period of time, they are also likely to be unable to give your home business the attention and dedication it deserves.
Vision. A good home business partner will have the same ideas for where you want your business to go, and more importantly, how it will get there. Sharing the same vision will ensure you and your partner agree on the fundamental issues necessary growing your home business.
Work background. Many successful home business partnerships involve two people who have very different backgrounds when it comes to their careers. This is a great way to fill gaps in knowledge. One partner may have the necessary business savvy, while the other has the hands-on knowledge. It’s hard for one person to know everything they need to about owning and operating a home business. So when you’re choosing a partner for your home business, you should consider the work talents and skills the person has to offer and make sure they complement your own-and can help your home business achieve its maximum potential.