They say that two heads are better than one.
Eventually, you might find yourself in a position where you're considering taking on a business partner to help your nascent company grow.
Finding the right person is essential.
If you go the partnership route, you need someone who's a good match for your goals, your values, and your skill set. You also need someone who's reliable, and who isn't hiding any skeletons in their closet, so to speak.
How do you even start?
Many business partners met online, or in local meetup groups, or at conferences or seminars.
Your partner probably won't be someone you know super well on a personal level — in fact, many people would caution against going into business with someone who's a close friend. If things go sour, you could lose your relationship with that person.
You actually want someone with whom your relationship is primarily business-only.
In a recent blog post, Smart Passive Income offers some helpful tips on what to look for in a business partner.
From finding someone whose skills complement your own, to doing research to make sure the person is what they appear to be, the right strategy can help you find the perfect individual to help you take your business to the next level.
Look for Complementary Skills
As you can imagine, the “randomly meeting super successful business leader at clubs” partner generation business model is not often successful. Finding a partner with complementary skills is a more realistic scenario. Consider an online partnership you are likely already familiar with: affiliate programs. One partner provides a product or service. The other provides traffic. If both partners just provide products, sales are going to be a bit slow.
There are exceptions to this rule, with Google being an example. Larry Page and Sergey Brin were both computer scientists at Stanford when they created BackRub, which later became Google. The gentlemen seem to be doing okay.
While there are exceptions to every rule, try to find partners who complement the skill sets of the founders already in the business.
Conduct Due Diligence
Due diligence is critical when evaluating a potential partner. Don’t think so? These postings on co-founder nightmares will change your mind. Due diligence is the process of evaluating a partnership candidate based on independent resources. The focus should be on:
- Does the candidate have a history of business ownership, and what is it?
- Is there anything alarming in the candidate’s history (criminal conviction, etc.)?
- What is the candidate’s reputation?
- Does the candidate have a history of filing lawsuits or being a defendant in litigation?
- Is the candidate a job hopper, and does it indicate a problem with commitment?
- Has the candidate filed bankruptcy or had other financial issues?
Next, conduct a Google search using the following commands:
- “Person’s name”
- “Person’s name” + lawsuit
- “Person’s name” + arrested
- “Person’s name” + accused
- “Person’s name” + judgment
- “Person’s name” + settlement
Reputation management firms specialize in burying negative listings in search results. Take the time to review the top ten pages of results for each search command.
Attempt to Conduct a Trial Run
Most people would agree that buying a vehicle without first going on a test drive would be unwise. We can say the same thing about a partnership. Instead of “marrying” your potential partner right away, why not date for a bit by pursuing a single project to determine if you are a match? Matching skill sets and personalities will take you a long way in establishing a successful partnership, but the outcome will always be in doubt until tested in a real world environment.
While it isn’t always practical to take a potential partner on a trial run, the strategy is worth its weight in gold if you can pull it off. All potential partners talk a good game because all entrepreneurs are optimists at heart. Running a trial campaign reveals whether those talking the talk can deliver on a daily basis.
You can learn more about the “do's” and “don'ts” of finding a business partner over at the Smart Passive Income blog.