You will often hear us compare a business relationship to that of a marriage – the fact is, as business professionals we sometimes spend more time with our coworkers than we do our own families. So, when it comes time to start your own business venture, you want to make sure you are being extremely critical as to who you invite to join you on your business journey. As I always say, tattoo removal and divorce attorneys are too expensive and uncomfortable to justify an impulse decision. The same rings true for a corporate relationship. As such, here are three things at a minimum that you should consider before tying the corporate knot with another:
Running a business has two main components: (1) the service you are providing/ the product you are producing and (2) the “back end” actual management of the business. Where on the spectrum do you fall? Are you more of the entrepreneurial “business guy,” or are you the manufacturer? In seeking your “match,” try to find someone that complements you and makes up for what you lack. One person can take control of the day-to-day business operations (bookkeeping, marketing, etc.) while the other will control the manufacturing of the widget. Other important “skills” include technical knowledge, contacts, and access to resources. If you are producing kelp noodles sourced from a specific farm in the ocean, you need to team up with someone who has access to that farm. Everyone has value to add, the key is picking a team that provides for the maximum capitalization of this value.
Keeping with the marriage theme, once you get out of the “honeymoon phase,” running a business is hard. All relationships take work, and business relationships are no exception. That being said, you want to set yourself up for success by picking a business partner with which you get along. At the most basic level, pick someone you trust; this person will have access to equipment, business records, money, and other confidential information – make sure you feel totally comfortable sharing that with them. How does the person handle conflict? Are they an avoider? Are they confrontational? How do they handle stressful situations? Do they work well with others? Are they going to be more of an HR liability than an asset? Are they dependable? It’s easy to allow the excitement of a new business venture to cloud your judgment. Think about this person at their absolute worst – do you still want them there by your side?
Nothing makes me cringe more than someone asking me where I see myself in five years. However, you need to make sure you and your potential partner are aligned with both the long-term and short-term goals and expectations of the business. Are you building it up to sell it quickly? Do you want to grow it and expand it? Do you want to keep it small? Is this supposed to be a hobby, or do you want to turn this into your sole source of income? Of course, the goals you set today don’t have to be set in stone, but you want to make sure you and your partner are communicating about your expectations for the business so you can continue to operate on the same page.
Having a business partner is an invaluable tool when you work well together. However, they have the potential to be both a blessing and a curse, so make sure you really take the time to pick your business partners wisely.