Every new business goes through phases, some representing expansion (hopefully, often) and some contraction and as these phases unfold your business can fluctuate in size and require different resources. Sometimes, the business will get to a certain plateau and seem to stick, almost spinning its wheels despite your efforts. At this point in time you will want to consider all your options and may feel that a business partner could really help to un-glue the potential and allow you to make significant forward strides. Finding a business partner can be quite a difficult task and is much more involved than one might think. Look at a business partnership like a marriage and you will be ideally placed to begin hunting!
You should start by asking yourself why you really need a business partner. Do you often find that your really lengthy work week is still not enough time and that you are spending inordinate amounts of time on rather mundane tasks? While you could consider taking on employees, they will not necessarily be an investment in terms of business prospects and sometimes a business partner can help to alleviate and spread a workload while working, like you, to grow the business.
Beware the burnout — this can occur when you’re pouring every hour that is sent to you into the business with little relief. If you are spreading yourself too thinly and trying to expand at the same time as you are running in place, then you could end up becoming less efficient with all the negative connotations.
If you have never had a business partner before and you are out looking for the first time, then stick to one partner. Don’t think that the more input you receive the better, as this is rarely the case. If things work out with your new partner you can always look at different options down the road. Remember what we said about a marriage, it is going to be quite a task for you to find and get to know someone before you dive in, so don’t make it that much harder by trying to find more than one partner.
As you start your process of discovery you should look around you, within your closest circles. Do you have any friends or good acquaintances who may be potential targets? Ask your closest friends and family if they can think of anyone you might talk to. Ask your existing business contacts, if you have an open type of relationship with them of course, for their input.
If you are unable to find a resource from within close circles, networking events may be your best bet. Remember that this process is going to be a lot longer as you must really get to know a complete stranger rather well before you move forward. Take your time here as this period of revelation is important from both your points of view. You will both need to to get to know each other, your backgrounds, current circumstances and aspirations as much as possible.
When you believe you have found your business partner and before you actually move ahead, conduct a summit meeting. Go through a formal exchange of ideas, representing the next few months and years and outline how you will interact as you move forward. Try not to leave any stone unturned here, so that there are no surprises or misunderstandings of any kind after formalities have been completed.
Always form an LLC or other formal Corporation. Never be tempted to engage a business partner on merely a handshake or verbal agreement. You really need to employ the services of a legal expert here and make sure that the attorney covers a period of vesting, so that the partner’s shares accumulate over time. It’s hardly fair for him or her to receive a significant portion of the business early on, should you get into a position where the corporation has to be liquidated.
When all is said and done, even the most arduous selection process cannot prepare you for what will happen in the real world. It may or may not work out and you may have to start again and look for other business partners. This happens all the time and is just another facet of doing business. Be diligent and you will stand a great chance of boosting your business success.
Does anyone have any gems of wisdom to share, relating to partner-hunting?