5 Steps to the Perfect Business Partnership

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1. Get clear on your needs. Why are you looking for a business partner? Who will fulfill the answer to that question best? Figure out exactly what you’re looking for in a partner, and, just as importantly, what you aren’t looking for. You and your new partner are going to be two parts of the same picture, so you’ve got to make sure what they bring to the table completes the picture. A good exercise to complete this step is to write a job description. Your partner obviously isn’t an employee, but write this description as though they will be. What qualifications, skills, and past experience will they need to have to fulfill your needs? Now, prioritize this list by which items are non-negotiable, very important, and optional. You might not find someone who fits every qualification, but at least you’ll know that they meet your minimum requirements – but only if you’re clear on what those requirements are. Also be sure to include personality traits in what you’re looking for. Remember this document is just for your eyes, so be completely honest. For instance, if you don’t like working closely with someone who is an introvert, put that in the description. Make it as all-encompassing as possible.

2. Fish in the right waters. You now have a clear picture of what you’re looking for in a partner, so now it’s time to find them. Some people think of close friends and family first, because often that’s easiest, but make sure they fit the criteria you set up in step one, and seriously consider whether or not you can work with them on a daily basis! Beyond close ties, this step is all about networking, and it’s important not to limit yourself to one particular kind of networking. Go to local Chamber of Commerce events, industry events, trade shows, and conferences, and don’t forget online networking, like LinkedIn and Facebook. In fact many great partnerships have been formed right here in the Young Entrepreneur Forum! A key to success here is to give yourself plenty of time to find the right person. A business partnership, much like marriage, isn’t something to rush into. Your goal is to meet tons of people and develop relationships, not to approach everyone you see about being a partner in your company. In the end, you’ll find you’ve benefited from this step in ways well beyond finding your next partner. If done right, networking will net you industry contacts, sales leads, and even life-long friendships.

3. Be selective. Again, this goes back to the plan you laid out in step 1. Don’t compromise on your needs. You should be getting to know people pretty well before even discussing a business partnership, so you’ll have a good idea of the kind of people they are and what they have to offer. If you’re bringing a partner on to share in your great business idea, you have the upper hand. Don’t feel that just because they have more money or are highly skilled in a certain area that you don’t have the right to be selective. Remember, hopefully you’re talking about a long-term working relationship, so make sure the person you choose is more than just technically qualified. Be sure they’re someone you’ll enjoy being around and that they share your core values and ambitions.

4. Clarify roles, duties, and expectations. Once you feel like you’ve found the right person to partner with, it is critical that you lay out a plan for going forward. Avoid misunderstandings, conflicts, and hurt feelings by clarifying exactly what each person’s role is going to be. Don’t assume anything. You might think because it was your business to start with that your new partner is going to defer to you on all major decisions, but they might be thinking that because they brought in money or the necessary skills in a particular area that you should be bowing to them. Do away with a lot of drama by laying it all on the table now. Also, don’t be thinking 50-50. Half and half partnerships are doomed for failure. Someone needs to be the deciding vote, and you’ll both need to agree on who that is before going to the next step.

5. Get legal. Whether you form an LLC with a formal operating agreement stating what you’ve clarified in the previous step, sign a partnership agreement, or create another legal form, hire an attorney to draw it up and make sure all the i’s are dotted and t’s are crossed. There are a lot of DIY legal sites and stock forms out there, but this is one area where it’s worth the extra expense to have it done by a professional. You don’t want to go into anything planning for failure, but there’s nothing wrong with being well prepared for unforeseen circumstances. Few people who have been part of a business partnership will argue with this point. A few hundred bucks can save you thousands (or millions) of dollars and a lot of headaches down the road.