You’ve already thought carefully about the pros and cons of partnership as a business structure as well as the alternatives and decided the benefits are worth the drawbacks. But now that you are about to jump into a new business with a colleague you might be having some worries about doing so. Now is the time to make sure you do it right. Here’s what to have in mind when choosing that all-important person.
Choosing the right person is crucial for your business’ success, as well as your peace of mind and quality of life. The costs of a bad partnership are devastating; it can tear apart friendships, families and businesses. The emotional toll is of a bad business partnership are far reaching not only impacting the partner themselves, but also their spouses, employees, and anyone close to them.
I don’t have to tell you how much the business will depend on your choosing the right person. But keep in mind that your quality of life will depend on it, too. It is worth spending the extra time and due diligence to ensure you will have a compatible and high functioning partnership.
DETERMINE COMPATIBILITY IN KEY DOMAINS
Here are the key issues, key priorities to spend time considering complementarity and compatibility in the following areas:
- Professional skills sets
- Performance records
- Work styles
- Communication styles
- Interpersonal skills and social intelligence
- Preferred decision-making styles
- Values including key work and life priorities
- Expectations around work-life balance
- Emotional intelligence, self-awareness and self-regulation
- Personal character, ethics and integrity
- Commitment to work through frictions big and small to keep the working relationship running as smoothly as possible
When a business partnership is faltering and I receive a call from one or both members wanting to salvage, dissolve, or discern if they can continue, in most cases, a major factor is a significant mismatch in one of these areas. (Other common instances include a rupture in the working relationship that was not caught and repaired early on.) You can be assured that all the pre-work you do in this domain will not only help determine your level of compatibility and your capacity to succeed in your working relationship, but will put you in a position to proactively navigate the differences between you.
REAL WORLD APPLICATION
Start with each of you independently doing a written evaluation of yourself and your partner in each of the above areas. Any of the above categories that you cannot answer at this time about yourself or the other indicates an area that is more prone to compromise both you as well as your business partner in the long run. More communication, research, or self-exploration is needed.
Exchange and discuss your completed notes with the other. This might be your first real foray into giving and receiving feedback constructively. It is not easy for most of us, but certainly better to start before there is an upset and also as a way to prevent some of them, and minimize many.
Explore and clarify any areas of disagreement with how the other perceives themself or you so you have agreement on areas of lower compatibility that needs to be negotiated between the two of you.
Anticipate scenarios in which the differences may show up with each other, investors, future employees, or customers. Talk through what you can put in place to mediate the differences. And determine what agreements you can make that will likely minimize the likely scenarios you identified above.
Make a determination for yourself. Based on what you are able to come up with in your discussions, you’ll have more data to consider in your private reflections and discussing with a trusted third party to discern if any of the areas might be deal breakers for you. You need to feel confident going forward with this person.
If you are unsure, find lower-stake projects to undertake together to get more information about your ability to negotiate your differences.
You need to come out of the discussion feeling very confident in having thought through ways to navigate the challenges that are likely to arise, since even the best plans can go astray, but poor plans can go disastrously. If there is an unwillingness to engage in this kind of process, consider it a big red flag. The likelihood that there will be the willingness and skill set to deal with problems as the develop is good to question.
GET PROFESSIONAL SUPPORT
Of course, the best practice is to seek professional assistance of a qualified Business Therapist or Business Partnership Coach. In addition to hiring an accountant and lawyer, it will also set you on the best course and likely save hours and pain to also invest as early as possible in a professional to help with you have all the difficult conversations and to build the best possible working relationship..
I am the Business Therapist for partnerships, co-founders, and entrepreneur couples. I will help you get clarity about what you need to consider in choosing and establishing a business partnership to not just have a profitable business, but to really enjoy working together.
Contact me for your free 15 minute phone consultation today to discuss your business partnership needs at (415) 895-0786. Concierge, and traditional office sessions available in the Bay Area. Virtual business therapy sessions available worldwide.