You may have started a new business or are planning on one, but you’ve realized you just can’t handle it all on your own. The solution: get a partner to share the workload. Before you do, however, there are some key things to consider about finding that partner – which will protect you from a partnership that can lead to legal or financial problems.
Most people start with a list of former colleagues, classmates, family and friends when considering whom to approach about partnering. All are valid, but if certain expertise is needed, or you need specific technical skills, you may have to go outside of your network. If you do, it’s even more imperative to vet the people you’re considering. Here are 10 of the best ways to find yourself a reliable business partner:
1. Talk to your network
Former business associates, family members and friends are a good place to start. Even if you know the person, vet them anyway. Do a background check on Nuwber to see if there is anything that shows up as a problem, including their true identity or police records. If you go outside of your personal network, including LinkedIn or professional associations, it becomes even more important to do a background check.
2. Go to Meetups
Meetups are ideal because they usually specialize in a particular industry that you’re planning to do business in. Plus, it’s an informal way to meet people without any pressure to discuss sensitive matters. You can find a Meetup group online by your topic of interest, and you can use their advanced search functions to find the type of meetup you’re looking for.
3. Look for someone with divergent skills
You don’t want to partner with a clone of yourself; you bring specific skills to the table, and you want to find someone with complementary skills. If you’re a “people person,” partner with a number’s person or a tech savvy guru. You can go to conferences that are targeted to specific skill sets, like CPAs, computer programmers and others.
4. Find a partner with similar passions
You want a partner who has the same passion for the business as you do. That way there won’t be any arguments about how much work things take or all the time someone is spending on the business. If they have similar passions, it will be a more harmonious working relationship.
5. Reach out to classmates
If you hold an MBA, it would be smart to reach out to the MBA group from your school. The fact that you both went to the same school for an MBA degree shows you have similar backgrounds and interests. Most MBA groups have a database of your classmates and graduating class, so make use of what’s available to you.
6. Check on Professional Associations
The Government has an online listing of Professional Associations by career categories. You can check it out to see if your business category has listings.
7. Watch for Red Flags
If someone proposes a deal that looks too good to be true, run! Many times, scammers use the ruse of looking for a business partner to gain access to financial information or other types of data and really have no intent on working together. Use your good judgment and don’t fall for something your gut tells you is a scam.
8. Make sure your prospective partner knows the market
If you’re down to a few potential candidates, interview them extensively to be sure they understand the market you’re going after. Do a deep dive into their knowledge of your market to ensure you’re hooking up with the right partner.
9. Form the right type of partnership
There are many different legal strategies to use when forming a partnership, from LP (Limited Partnership) to a LLP (Limited Liability Partnership) to an LLC, a Limited Liability Corporation. Each has specific benefits, tax and otherwise, so it might be good to discuss your decisions with a lawyer.
10. Have an iron-clad partnership agreement
Even though you want things to go well and be successful, not every partnership lasts forever. You need to have an iron-clad partnership agreement that discusses how you’ll be paid, who owns what and what type of exit plan you agree to if you leave. Definitely have a lawyer draw this up so you don’t have problems in the future.
Just remember many great partnerships have made lots of money, including Warby Parker, Ben & Jerry’s and thousands of others. Finding the right partner is the starting point – so spend the time to get it right!